Political Law Case Digests

POLITICAL LAW JURISPRUDENCE ATTY.
GOROSPE
PRELIMINARY
CONSIDERATIONS
A.M. No. 93-7-696-0 February 21,
1995
In Re JOAQUIN T. BORROMEO, Ex
Rel. Cebu City Chapter of the
Integrated Bar of the Philippines.
HELD:
Joaquin Borromeo was declared guilty
of constructive contempt of court for
repetitiously disrespecting the decisions and
resolutions issued by the courts, and even by
issuing a circular containing libelous and
offending
accusations
(like
whimsical,
capricious,
and
tyrannical)
against
the
Supreme Court justices and its employees. He
even delivered a letter accusing lawyers of
defamatory comments and insults. This is due
to his series of dismissed complaints and
appeals against 3 banks namely Traders Royal
Bank, United Coconut Planters Bank, and
Security Bank and Trust Co. from which he
obtained loans with unfulfilled mortgages. In
relation to this, he filed cases against the
lawyers of these banks and even against the
clerks of court who signed the minute
resolutions of these cases. The actions reached
the alarming number of 50 cases varying from
civil, criminal, to administrative cases.
In response, the court answered all his
false alleged accusations through a resolution
along with declaring him guilty of contempt of
court.
A.M. MTJ-98-1147 July 2, 1998

JESUS S. CONDUCTO vs.
JUDGE ILUMINADO C. MONZON
FACTS:
A complaint was filed by petitioner
Conducto with the Sangguniang Panlungsod of
San Pablo City against Benjamin Maghirang,
the barangay chairman of Barangay III-E of
San Pablo City, for abuse of authority, serious
irregularity and violation of law in that, among
other things for appointing his sister-in-law to
the position of barangay secretary which
violates the law. A case was filed against

Maghirang for violating Art 244 (Unlawful
Appointment) under the RPC. Petitioner seeks
that Maghirang be suspended from his office
but it was denied by the respondent judge
holding that the requirement for such action is
a simultaneous existence of administrative and
criminal cases as against the accused, which
according to him is not present in this case,
and that the reelection of the Barangay
Chairman is a condonation of his mistakes
during his prior term. Hence, petitioner filed a
case against the respondent judge for
ignorance of the law.
ISSUE: WON respondent judge is guilty of
ignorance of the law.
HELD: YES.
The claim of respondent Judge that a
local official who is criminally charged can be
preventively suspended only if there is an
administrative case filed against him is without
basis. It is well settled that Section 13 of RA
3019
makes
it
mandatory
for
the
Sandiganbayan (or the Court) to suspend any
public officer against whom a valid information
charging violation of this law, Book II, Title 7 of
the RPC, or any offense involving fraud upon
government or public funds or property is filed
in
court. Barangay
Chairman
Benjamin
Maghirang
was
charged
with
Unlawful
Appointment, punishable under Article 244,
Title 7, Book II of the Revised Penal
Code. Therefore, it was mandatory on Judge
Monzons part, considering the Motion filed, to
order the suspension of Maghirang.
Also, In Ingco v. Sanchez,[17] this Court
explicitly ruled that the re-election of a public
official extinguishes only the administrative,
but not the criminal, liability incurred by him
during his previous term of office.
Be that as it may, it would also do well
to note that good faith and lack of malicious
intent cannot completely free respondent from
liability.
Digested and compiled by Monica S. Cajucom, UST Law

Its not how good you are, its how good you want to be. Paul Arden
POLITICAL LAW JURISPRUDENCE ATTY. GOROSPE
A.M. No. 133-J May 31, 1982

BERNARDITA R. MACARIOLA
vs. HONORABLE ELIAS B.
ASUNCION, Judge of the Court of
First Instance of Leyte
FACTS:
This is a complaint of petitioner against
respondent judge of acts unbecoming of a
judge regarding an act following the
unfavorable
decision
rendered
by
the
respondent
judge
against
the
former
concerning disputed properties of her deceased
father which were being claimed by the latters
children from a subsequent marriage. It turned
out that respondent judge purchased one of
the lots in the case decided by him and
transferred it to the fishing corporation where
he is a stockholder and a ranking officer. Along
with this, other misdeeds were also exposed
such as that his involvement in the mentioned
business corporation while he is sitting as a
judge is in violation of the law, his alleged
coddling of and close relations with an
impostor, Dominador Tan, who misrepresents
himself as a practicing attorney, and other
disregard for ethics.
ISSUE: WON respondent judge should be held
guilty of acts unbecoming of a judge.
HELD: NO.
Respondent Judge cannot be held liable
for involving himself in a business because
there
is
no
showing
that
respondent
participated
or
intervened in
his
official capacity in the business or transactions
of the Traders Manufacturing and Fishing
Industries, Inc. In the case at bar, the business
of the corporation in which respondent
participated has obviously no relation or
connection with his judicial office. It does not
appear also from the records that the aforesaid
corporation gained any undue advantage in its
business operations by reason of respondent's
financial involvement in it, or that the
corporation benefited in one way or another in
any case filed by or against it in court. No
provision in both the 1935 and 1973
Constitutions of the Philippines, nor is there an
existing law expressly prohibiting members of

the Judiciary from engaging or having interest
in any lawful business
Likewise, Article 14 of the Code of
Commerce which prohibits judges from
engaging in commerce is, as heretofore stated,
deemed abrogated automatically upon the
transfer of sovereignty from Spain to America,
because it is political in nature. virtual law
libraryMoreover, the prohibition in paragraph 5,
Article 1491 of the New Civil Code against the
purchase by judges of a property in litigation
before the court within whose jurisdiction they
perform their duties, cannot apply to
respondent Judge because the sale of the lot in
question to him took place after the finality of
his decision in Civil Case No. 3010 as well as
his two orders approving the project of
partition; hence, the property was no longer
subject of litigation. virtual l
WE are not, however, unmindful of the
fact that respondent Judge and his wife had
withdrawn on January 31, 1967 from the
aforesaid corporation and sold their respective
shares to third parties. Such disposal or sale
by respondent and his wife of their shares in
the corporation only 22 days after the
incorporation of the corporation, indicates that
respondent realized that early that their
interest in the corporation contravenes the
aforesaid Canon 25.
With respect to the third and fourth
causes of action, complainant alleged that
respondent was guilty of coddling an impostor
and acted in disregard of judicial decorum, and
that there was culpable defiance of the law and
utter disregard for ethics. That fact even if true
did not render respondent guilty of violating
any canon of judicial ethics as long as his
friendly relations with Dominador A. Tan and
family did not influence his official actuations
as a judge where said persons were concerned.
There is no tangible convincing proof that
herein respondent gave any undue privileges in
his court to Dominador Arigpa Tan or that the
latter benefitted in his practice of law from his
personal relations with respondent, or that he
used his influence, if he had any, on the Judges
of the other branches of the Court to favor said
Dominador Tan.

G.R. No. 152154 July 15, 2003

REPUBLIC OF THE PHILIPPINES
vs. HONORABLE
SANDIGANBAYAN (SPECIAL
FIRST DIVISION), Ferdinand E.
Marcos (represented by his
estate/heirs: Imelda R. Marcos,
Maria Imelda [Imee] MarcosManotoc, Ferdinand R. Marcos, Jr.
and Irene Marcos-Araneta) and
Imelda Romualdez Marcos
FACTS:
Petitioner
Republic, through the
Presidential Commission on Good Government
(PCGG), represented by the Office of the
Solicitor General (OSG), filed a petition for
forfeiture before the Sandiganbayan. Petitioner
sought the declaration of the aggregate
amount of US$356 million (now estimated to
be more than US$658 million inclusive of
interest) deposited in escrow in the PNB, as illgotten wealth. The funds were previously held
by the following five account groups, using
various foreign foundations in certain Swiss
banks. In addition, the petition sought the
forfeiture of US$25 million and US$5 million in
treasury notes which exceeded the Marcos
couples salaries, other lawful income as well
as income from legitimately acquired property.
The treasury notes are frozen at the
Central Bank of the Philippines by virtue of the
freeze order issued by the PCGG. Before the
case was set for pre-trial, a General Agreement
and the Supplemental Agreement dated
December 28, 1993 were executed by the
Marcos children and then PCGG Chairman
Magtanggol Gunigundo for a global settlement
of the assets of the Marcos family to identify,
collate, cause the inventory of and distribute
all assets presumed to be owned by the Marcos
family under the conditions contained therein.
RA 1379 raises the prima facie

presumption that a property is unlawfully
acquired, hence subject to forfeiture, if its
amount or value is manifestly disproportionate
to the official salary and other lawful income of
the public officer who owns it. The following
facts must be established in order that
forfeiture or seizure of the Swiss deposits may
be effected: (1) ownership by the public officer
of money or property acquired during his
incumbency, whether it be in his name or
otherwise, and (2) the extent to which the
amount of that money or property exceeds, i.
e., is grossly disproportionate to, the legitimate
income of the public officer. Herein, the
spouses Ferdinand and Imelda Marcos were
public officials during the time material to the
present case was never in dispute.
The spouses accumulated salary of
$304,372.43 should be held as the only known
lawful income of the Marcoses since they did
not file any Statement of Assets and Liabilities
(SAL), as required by law, from which their net
worth could be determined. Besides, under the
1935 Constitution, Ferdinand E. Marcos as
President could not receive "any other
emolument from the Government or any of its
subdivisions and instrumentalities". Likewise,
under the 1973 Constitution, Ferdinand E.
Marcos as President could "not receive during
his tenure any other emolument from the
Government or any other source."
Their only known lawful income of
$304,372.43 can therefore legally and fairly
serve as basis for determining the existence of
a prima facie case of forfeiture of the Swiss
funds. The Republic did not fail to establish a
prima facie case for the forfeiture of the Swiss
deposits.
The Swiss deposits which were
transferred to and are deposited in escrow at
the Philippine National Bank in the estimated
aggregate amount of US$658,175,373.60 as of
31 January 2002, plus interest, were forfeited
in favor of the Republic.
ISSUE: WON the Swiss funds can be forfeited

in favor of the Republic, on the basis of the
Marcoses lawful income.
HELD: NO.

THE STATE
G.R. No. L-26379 December 27,
1969
WILLIAM C. REAGAN, ET. AL vs.
COMMISSIONER OF INTERNAL
REVENUE
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.
G.R. No. 175888

SUZETTE NICOLAS vs. ROMULO
FACTS:
FACTS:
Petitioner Reagan, a civilian employee
of an American corporation providing technical
assistance to the US Air Force in the
Philippines, questioned 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 US 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. He seeks that an amount of P2,979.00 as
the income tax paid by him be refunded.
ISSUE: WON the Clark Field Air Base is a
foreign property therefore excluded from the
power of Philippine taxation.
HELD: NO.
By the [Military Bases] Agreement, it
should be noted, the Philippine Government
merely consents that the United States
exercise jurisdiction in certain cases. The
consent was given purely as a matter of
comity, courtesy, or expediency over the bases
as part of the Philippine territory or divested
itself completely of jurisdiction over offenses
committed therein. This provision is not and
can not on principle or authority be construed
as a limitation upon the rights of the Philippine
Government.
The 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
Respondent Lance Corporal (L/CPL)

Daniel Smith is a member of the US Armed
Forces. He was charged with the crime of rape
committed against a Filipina, petitioner herein,
sometime on November 1, 2005. Pursuant to
the Visiting Forces Agreement (VFA) between
the Republic of the Philippines and the US
entered into, the US, at its request, was
granted custody of Smith. The RTC of Makati
rendered a decision finding defendant Smith
guilty due to sufficient evidence.
Defendant Smith was taken out of the
Makati jail by a contingent of Philippine law
enforcement agents, purportedly acting under
orders of the DILG and brought to a facility for
detention under the control of the US
government under the new agreements
between the Philippines and the US, referred to
as the Romulo-Kenney Agreement.
Petitioners
contend
that
the Philippines should
have
custody
of
defendant L/CPL Smith because, first of all, the
VFA is void and unconstitutional.
ISSUE:
WON
the
unconstitutional.
VFA
is
void
HELD: NO.
Art. XVIII, Sec. 25 states:
Sec. 25. After the expiration in 1991
of
the
Agreement
between
the
Philippines and the United States of
America concerning Military Bases,
foreign military bases, troops, or
facilities shall not be allowed in the
Philippines except under a treaty duly

and

concurred in by the Senate and, when
the Congress so requires, ratified by a
majority of the votes cast by the
people in a national referendum held
for that purpose, and recognized as a
treaty by the other contracting State.
The provision of Art. XVIII, Sec. 25 of the
Constitution, is complied with by virtue of the
fact that the presence of the US Armed Forces
through the VFA is a presence allowed under
the RP-US Mutual Defense Treaty. Since the
RP-US Mutual Defense Treaty itself has been
ratified and concurred in by both the Philippine
Senate and the US Senate, there is no
violation of the Constitutional provision
resulting from such presence.
The VFA being a valid and binding
agreement, the parties are required as a
matter of international law to abide by its
terms and provisions.
Applying, however, the provisions of
VFA, the Court finds that there is a different
treatment when it comes to detention as
against custody. Art. V, Sec. 10. The
confinement or detention by Philippine
authorities of United States personnel shall be
carried out in facilities agreed on by
appropriate Philippines and US authorities.
Therefore,
the
Romulo-Kenney
Agreements of December 19 and 22, 2006,
which are agreements on the detention of the
accused in the United States Embassy, are
not in accord with the VFA itself because such
detention
is
not
by
Philippine
authorities. Respondents
should
therefore
comply with the VFA and negotiate with
representatives of the United States towards
an agreement on detention facilities under
Philippine authorities as mandated by Art. V,
Sec. 10 of the VFA.
G.R. No. L-9657. November 29,

1956
LEOPOLDO T. BACANI and MATEO
A. MATOTO vs. NATIONAL
COCONUT CORPORATION, ET AL.,
NATIONAL COCONUT
CORPORATION and BOARD OF
LIQUIDATORS
FACTS:
Plaintiffs herein
are
court
stenographers assigned in Branch VI of the
Court of First Instance of Manila. During the
pendency of Civil Case No. 2293 of said court,
entitled Francisco Sycip vs. National Coconut
Corporation, Assistant Corporate Counsel
Federico Alikpala, counsel for Defendant,
requested said stenographers for copies of the
transcript of the stenographic notes taken by
them during the hearing. Plaintiffs complied
with the request by delivering to Counsel
Alikpala the needed transcript containing 714
pages and thereafter submitted to him their
bills for the payment of their fees. The National
Coconut Corporation paid the amount of P564
to Leopoldo T. Bacani and P150 to Mateo A.
Matoto for said transcript at the rate of P1 per
page. However, the Auditor General disallowed
the payment of these fees and ordered that it
shall be reimbursed for the reason that
NACOCO, being a public corporation, is
exempted from the fees. For reimbursement to
take place, it was further ordered that the
amount of P25 per payday be deducted from
the salary of Bacani and P10 from the salary of
Matoto. Hence, this petition.
ISSUE: WON NACOCO is exempt from legal
fees being an alleged government corporation.
HELD: NO.
There
are
functions
which
our
government is required to exercise to promote
its objectives as expressed in our Constitution
and which are exercised by it as an attribute of
sovereignty (constitute), and those which it
may exercise to promote merely the welfare,
progress and prosperity of the people
(ministrant). To this latter class belongs the
organization of those corporations owned or
controlled by the government to promote
certain aspects of the economic life of our
people such as the National Coconut
Corporation.
These
are
what
we
call
government-owned or controlled corporations
which may take on the form of a private
enterprise or one organized with powers and
formal characteristics of a private corporations
under the Corporation Law. They do not


acquire the status of a government entity for
the simple reason that they do not come under
the classification of municipal or public
corporation. NACOCO is a GOCC. Thus, not
part of the government.
G.R. No. L-21484

November
29, 1969
THE AGRICULTURAL CREDIT
AND COOPERATIVE FINANCING
ADMINISTRATION (ACCFA) vs.
CONFEDERATION OF UNIONS IN
GOVERNMENT CORPORATIONS
AND OFFICES (CUGCO), et. al.
FACTS:
The Agricultural Credit and Cooperative
Financing Administration (ACCFA) was a
government agency created under Republic Act
No. 821, as amended. Its administrative
machinery was reorganized and its name
changed to Agricultural Credit Administration
(ACA) under the Land Reform Code (Republic
Act No. 3844).
On September 4, 1961 a collective
bargaining agreement, which was to be
effective for a period of one (1) year was
entered into by and between the Unions and
the ACCFA. A few months thereafter, the
Unions started protesting against alleged
violations and non-implementation of said
agreement. Thereafter Unions declared a
strike, which was ended when the strikers
voluntarily returned to work. The Unions,
together
with
its
mother
union,
the
Confederation of Unions in Government
Corporations and Offices (CUGCO), filed a
complaint with the Court of Industrial Relations
against the ACCFA for having allegedly
committed acts of unfair labor practice.
ISSUE: WON the Unions and CUGCO had the
right to commence a CBA with ACA, formerly
ACCFA.
HELD: NO.
We hold that the respondent Unions

are not entitled to the certification election
sought in the Court below. Such certification is
admittedly for purposes of bargaining in behalf
of the employees with respect to terms and
conditions of employment, including the right
to strike as a coercive economic weapon, as in
fact the said unions did strike in 1962 against
the ACCFA. This is contrary to Section 11 of
Republic Act No. 875, which provides for
the prohibition against to strike in the
government.
With the reorganization of the ACCFA
and its conversion into the ACA under the Land
Reform Code and in view of our ruling as to the
governmental character of the functions of the
ACA, the decision of the respondent Court
dated March 25, 1963, and the resolution en
banc affirming it, in the unfair labor practice
case filed by the ACCFA, which decision is the
subject of the present review in G. R. No. L21484, has become moot and academic,
particularly insofar as the order to bargain
collectively with the respondent Unions is
concerned. The respondent Unions have no
right to the certification election sought by
them nor, consequently, to bargain collectively
with the petitioner, no further fringe benefits
may be demanded on the basis of any
collective bargaining agreement.
G.R. No. 143377. February 20,

2001
SHIPSIDE INCORPORATED vs.
THE HON. COURT OF APPEALS,
HON. REGIONAL TRIAL COURT,
BRANCH 26 (San Fernando City,
La Union) & The REPUBLIC OF
THE PHILIPPINES
FACTS:
October 29, 1958, Original Certificate
of Title was issued in favor of Rafael Galvez,
over four parcels of land. Lots No. 1 and 4
were conveyed by Rafael Galvez in favor of
Filipina Mamaril, Cleopatra Llana, Regina
Bustos, and Erlinda Balatbat in a deed of sale.
Then Mamaril et al. sold Lots No. 1 and 4 to


Lepanto
Consolidated
Mining
Company.
Unknown to the latest owner, the CIR of La
Union issued an Order in Land Registration
Case No. N-361 declaring the deed of sale
between Galvez and Mamaril, et. al. (OCT No.
0-381) null and void, and ordered the
cancellation thereof.
Lepanto Consolidated Mining Company
sold to herein petitioner Shipside Inc. Lots No.
1 and 4.
Twenty-four years after, the lots have
never
been
executed.
Consequently,
a
complaint for revival of judgment and
cancellation of titles was filed by the OSG.
ISSUE: WON Republic of the Philippines can
maintain the action for revival of judgment herein
despite the issue of prescription.
HELD: NO.
While it is true that prescription does not
run against the State, the same may not be
invoked by the government in this case since it
is no longer interested in the subject matter.
Moreover, to recognize the Government as
a proper party to sue in this case would set a
bad precedent as it would allow the Republic to
prosecute, on behalf of government-owned or
controlled corporations, causes of action which
have already prescribed, on the pretext that
the Government is the real party in interest
against whom prescription does not run, said
corporations having been created merely as
agents for the realization of government
programs.
Parenthetically, petitioner was not a party
to the original suit for cancellation of title
commenced by the Republic twenty-seven
years for which it is now being made to
answer, nay, being made to suffer financial
losses.
It should also be noted that petitioner is
unquestionably a buyer in good faith and for
value, having acquired the property in 1963, or
5 years after the issuance of the original
certificate of title, as a third transferee. If only
not to do violence and to give some measure
of respect to the Torrens System, petitioner
must be afforded some measure of protection.
STATE IMMUNITY
ACT NO. 3083
AN ACT DEFINING THE
CONDITIONS UNDER WHICH
THE GOVERNMENT OF THE
PHILIPPINE ISLANDS MAY BE
SUED
Section 1. Complaint against Government.
Subject to the provisions of this Act, the
Government of the Philippine Islands hereby
consents and submits to be sued upon any
moneyed claim involving liability arising from
contract, expressed or implied, which could
serve as a basis of civil action between private
parties.
Sec. 2. A person desiring to avail himself of
the privilege herein conferred must show that
he has presented his claim to the Insular
Auditor 1 and that the latter did not decide the
same within two months from the date of its
presentation.
Sec. 3. Venue. Original actions brought
pursuant to the authority conferred in this Act
shall be instituted in the Court of First Instance
of the City of Manila or of the province were
the claimant resides, at the option of the latter,
upon which court exclusive original jurisdiction
is hereby conferred to hear and determine
such actions.
Sec. 4. Actions instituted as aforesaid shall be
governed by the same rules of procedure, both
original and appellate, as if the litigants were


private parties.
Sec. 5. When the Government of the Philippine
Island is plaintiff in an action instituted in any
court of original jurisdiction, the defendant
shall have the right to assert therein, by way of
set-off or counterclaim in a similar action
between private parties.
Sec. 6. Process in actions brought against the
Government of the Philippine Islands pursuant
to the authority granted in this Act shall be
served upon the Attorney-General 2 whose
duty it shall be to appear and make defense,
either himself or through delegates.
Sec. 7. Execution. No execution shall issue
upon any judgment rendered by any court
against the Government of the Philippine
Islands under the provisions of this Act; but a
copy thereof duly certified by the clerk of the
Court in which judgment is rendered shall be
transmitted by such clerk to the GovernorGeneral, 3 within five days after the same
becomes final.
Sec. 8. Transmittal of Decision. The
Governor-General, 4 at the commencement of
each regular session of the Legislature, 5 shall
transmit to that body for appropriate action all
decisions so received by him, and if said body
determine that payment should be made, it
shall appropriate the sum which the
Government has been sentenced to pay,
including the same in the appropriations for
the ensuing year.
Sec. 9. This Act shall take effect on its
approval.
Approved: March 16, 1923.
COMMONWEALTH ACT NO. 327

AN ACT FIXING THE TIME
WITHIN WHICH THE AUDITOR
GENERAL SHALL RENDER HIS
DECISIONS AND PRESCRIBING
THE MANNER OF APPEAL
THEREFROM
Section 1. In all cases involving the

settlement of accounts or claims, other than
those of accountable officers, the Auditor
General shall act and decide the same within
sixty days, exclusive of Sundays and holidays,
after their presentation. If said accounts or
claims need reference to other persons, office
or offices, or to a party interested, the period
aforesaid shall be counted from the time the
last comment necessary to a proper decision is
received by him. With respect to the accounts
of accountable officers, the Auditor General
shall act on the same within one hundred days
after their submission, Sundays and holidays
excepted.
In case of accounts or claims already
submitted to but still pending decision by the
Auditor General on or before the approval of
this Act, the periods provided in this section
shall commence from the date of such
approval.
Section 2. The party aggrieved by the final
decision of the Auditor General in the
settlement of an account for claim may, within
thirty days from receipt of the decision, take
an appeal in writing:
(a) To the President of the United States,
pending the final and complete withdrawal of
her sovereignty over the Philippines, or
(b) To the President of the Philippines, or
(c) To the Supreme Court of the Philippines if
the appellant is a private person or entity.
If there are more than one appellant, all
appeals shall be taken to the same authority
resorted to by the first appellant.
From a decision adversely affecting the
interests of the Government, the appeal may
be taken by the proper head of the department
or in case of local governments by the head of
the office or branch of the Government
immediately concerned.
The appeal shall specifically set forth the


particular action of the Auditor General to
which exception is taken with the reasons and
authorities relied on for reversing such
decision.
Section 3. This Act shall take effect upon its
approval.
Approved: June 18. 1938.
PRESIDENTIAL DECREE No. 1807

PRESCRIBING THE PROCEDURE
WHEREBY THE REPUBLIC OF
THE PHILIPPINES MAY WAIVE
SOVEREIGN IMMUNITY FROM
SUIT AND OTHER LEGAL
PROCEEDING WITH RESPECT TO
ITSELF OR ITS PROPERTY IN
CONNECTION WITH FOREIGN
OBLIGATIONS CONTRACTED BY
IT PURSUANT TO LAW
WHEREAS, in the pursuit of economic growth
and development, it has become imperative for
the Republic of the Philippines to enter into
contracts or transactions with international
banking, financial and other foreign
enterprises;
WHEREAS, recognizing this need, existing
legislation expressly authorize the Republic of
the Philippines to contract foreign obligations,
including borrowings in foreign currency, and
to guarantee foreign obligations of corporations
and other entities owned or controlled by the
Government of the Philippines;
WHEREAS, circumstances in the international
market may require that sovereign states
entering into contracts or transactions make
express waivers of sovereign immunity in
connection with such contracts or transactions;
WHEREAS, it is in the national interest that a
procedure be prescribed with respect to the
waiver of sovereign immunity of the Republic
of the Philippines in respect of international
contracts or transactions entered into by it;
NOW, THEREFORE, I, FERDINAND E. MARCOS,

President of the Republic of the Philippines, by
virtue of the powers vested in me by the
Constitution, do hereby order and decree:
Section 1. Procedure for, and Conditions of,
Waiver of Sovereign Immunity.
In instances where the law expressly
authorizes the Republic of the Philippines to
contract or incur a foreign obligation, it may
consent to be sued in connection therewith.
The President of the Philippines or his duly
designated representative may, in behalf of the
Republic of the Philippines, contractually agree
to waive any claim to sovereign immunity from
suit or legal proceedings and from set-off,
attachment or executive with respect to its
property, and to be sued in any appropriate
jurisdiction in regard to such foreign obligation.
For purposes of this decree, a foreign
obligation means any direct, indirect, or
contingent obligation or liability capable of
pecuniary estimation and payable in a currency
other than Philippine currency.
Section 2. Validity of existing Waivers.
Nothing in this Decree shall be construed to
revoke or repeal any waiver of sovereign
immunity from suit or legal proceedings or
from set-off, attachment or execution granted
under or pursuant to other provisions of law.
Section 3. Effectivity. This Decree shall take
effect immediately.
ARTICLE 2180 (NCC)

xxx
The State is responsible in like manner when it
acts through a special agent; but not when the
damage has been caused by the official to
whom the task done properly pertains, in
which case what is provided in Article 2176
shall be applicable.
xxx
G.R. No. L-11154

March 21,
1916
E. MERRITT vs.
GOVERNMENT OF THE
PHILIPPINE ISLANDS
FACTS:


Counsel for the plaintiff insists that the
trial court erred (1) "in limiting the general
damages which the plaintiff suffered to P5,000,
instead of P25,000 as claimed in the
complaint," and (2) "in limiting the time when
plaintiff was entirely disabled to two months
and twenty-one days and fixing the damage
accordingly in the sum of P2,666, instead of
P6,000 as claimed by plaintiff in his complaint."
The Attorney-General on behalf of the
defendant urges that the trial court erred: (a)
in finding that the collision between the
plaintiff's motorcycle and the ambulance of the
General Hospital was due to the negligence of
the chauffeur, who is an alleged agent or
employee of the Government; (b) in holding
that the Government of the Philippine Islands
is liable for the damages sustained by the
plaintiff as a result of the collision, even if it be
true that the collision was due to the
negligence of the chauffeur; and (c) in
rendering judgment against the defendant for
the sum of P14,741.
Consequently, the Government issued
an act allowing the plaintiff to commence a
lawsuit against it.
sense when it acts through a special agent, but

not when the damage should have been
caused by the official to whom properly it
pertained to do the act performed, in which
case the provisions of the preceding article
shall be applicable. The responsibility of the
state is limited to that which it contracts
through a special agent, duly empowered by
a definite order or commission to perform
some act or charged with some definite
purpose which gives rise to the claim.
The chauffeur of the ambulance of the
General Hospital was not such an agent.
ISSUE:
1)
WON the Government conceded its
liability to the plaintiff by allowing a lawsuit to
commence against it.
2)
WON the chauffeur is a government
employee or agent.
FACTS:
HELD:
1) NO.
By consenting to be sued a state simply
waives its immunity from suit. It does not
thereby concede its liability to plaintiff, or
create any cause of action in his favor, or
extend its liability to any cause not previously
recognized. It merely gives a remedy to
enforce a preexisting liability and submits itself
to the jurisdiction of the court, subject to its
right to interpose any lawful defense.
2) NO.
We will now examine the substantive law
touching the defendant's liability for the
negligent acts of its officers, agents, and
employees. Paragraph 5 of article 1903 of the
Civil Code reads: The state is liable in this
GRN L-35645 May 22, 1985.

UNITED STATES OF AMERICA,
CAPT. JAMES B. GALLOWAY,
WILLIAM I. COLLINS and
ROBERT GOHIER vs. HON. V. M.
RUIZ, Presiding Judge of Branch
XV, Court of First Instance of Rizal
and ELIGIO DE GUZMAN & CO.,
INC.
The United States of America had a

naval base in Subic, Zambales. The base was
one of those provided in the Military Bases
Agreement between the Philippines and the
United States.
Sometime in May, 1972, the United
States invited the submission of bids for a
couple of repair projects. Eligio de Guzman
land Co., Inc. responded to the invitation and
submitted bids. Subsequent thereto, the
company received from the US two telegrams
requesting it to confirm its price proposals and
for the name of its bonding company. The
company construed this as an acceptance of its
offer so they complied with the requests. The
company received a letter which was signed by
William I. Collins of Department of the Navy of
the United States, also one of the petitioners
herein informing that the company did not
qualify to receive an award for the projects
because
of
its
previous
unsatisfactory
performance rating in repairs, and that the
projects were awarded to third parties. The


company filed a complaint against the
defendants
herein
demanding
specific
performance that the company be allowed to
perform the work on the projects and, in the
event that specific performance was no longer
possible, to order the defendants to pay
damages.
ISSUE: WON the US is immune from suit
having dealt with a private corporation.
HELD: YES.
A State may be said to have descended
the the level of an individual and can thus be
deemed to have tacitly given its consent to be
sued only when it enters into business
contracts. It does not apply where the contract
relates to the exercise of its sovereign
functions. In this case the projects are an
integral part of the naval base which is devoted
to the defense of both the United States and
the Philippines, indisputably a function of the
government of the highest order, they are not
utilized for nor dedicated to commercial or
business purposes.
G.R. No. 129406

March 6,
2006
represented by the
PRESIDENTIAL COMMISSION ON
GOOD GOVERNMENT (PCGG) vs.
SANDIGANBAYAN (SECOND
DIVISION) and ROBERTO S.
BENEDICTO.
FACTS:
The PCGG issued writs placing under
sequestration all business enterprises, entities
and other properties, real and personal, owned
or registered in the name of private respondent
Benedicto, or of corporations in which he
appeared to have controlling or majority
interest due to his involvement in cases of illgotten wealth. Among the properties thus
sequestered and taken over by PCGG fiscal
agents were the 227 shares in NOGCCI owned
by and registered under the name of private
respondent. As sequester of the 227 shares

formerly owned by Benedicto, PCGG did not
pay the monthly membership fee. Later on, the
shares were declared to be delinquent to be
put into an auction sale. Despite filing a writ of
injunction, it was nevertheless dismissed. So
petitioner Republic and private respondent
Benedicto
entered
into
a
Compromise
Agreement which contains a general release
clause where petitioner agreed and bound itself
to lift the sequestration on the 227 NOGCCI
shares acknowledging that it was within private
respondents capacity to acquire the same
shares out of his income from business and the
exercise of his profession. Implied in this
undertaking is the recognition by petitioner
that the subject shares of stock could not have
been ill-gotten
Benedicto filed a Motion for Release
from Sequestration and Return of Sequestered
Shares/Dividends praying, inter alia, that his
NOGCCI shares of stock be specifically released
from sequestration and returned, delivered or
paid to him as part of the parties Compromise
Agreement in that case. It was granted but the
shares were ordered to be put under the
custody of the Clerk of Court. Along with this,
PCGG was ordered to deliver the shares to the
Clerk of Court which it failed to comply with
without any justifiable grounds.
In a last-ditch attempt to escape
liability, petitioner Republic, through
the
PCGG, invokes state immunity from suit.
ISSUE: WON the Republic can invoke state
immunity.
HELD: NO.
In fact, by entering into a Compromise
Agreement with private respondent Benedicto,
petitioner Republic thereby stripped itself of its
immunity from suit and placed itself in the
same level of its adversary. When the State
enters into contract, through its officers or
agents, in furtherance of a legitimate aim and
purpose and pursuant to constitutional
legislative authority, whereby mutual or
reciprocal benefits accrue and rights and
obligations arise therefrom, the State may be
sued even without its express consent,
precisely because by entering into a contract


the sovereign descends to the level of the
citizen. Its consent to be sued is implied from
the very act of entering into such contract,
breach of which on its part gives the
corresponding right to the other party to the
agreement.
G.R. No. L-23139

December 17,
1966
MOBIL PHILIPPINES
EXPLORATION, INC. vs.
CUSTOMS ARRASTRE SERVICE
and BUREAU of CUSTOMS
FACTS:
Four cases of rotary drill parts were
shipped from abroad on S.S. "Leoville"
consigned to Mobil Philippines Exploration, Inc.,
Manila. It was discharged to the custody of the
Customs Arrastre Service, the unit of the
Bureau of Customs then handling arrastre
operations therein. The Customs Arrastre
Service later delivered to the broker of the
consignee three cases only. Petitioner filed suit
in the Court of First Instance of Manila against
the Customs Arrastre Service and the Bureau
of Customs to recover the value of the
undelivered case plus other damages. The
respondents filed a motion to dismiss on the
ground that not being persons under the law,
they cannot be sued.
ISSUE: WON the defendants can invoke state
immunity.
HELD: YES.
Now, the fact that a non-corporate
government entity performs a function
proprietary in nature does not necessarily
result in its being suable. If said nongovernmental function is undertaken as an
incident to its governmental function, there is
no waiver thereby of the sovereign immunity
from suit extended to such government entity.
The Bureau of Customs, to repeat, is
part of the Department of Finance with no
personality of its own apart from that of the
national government. Its primary function is
governmental, that of assessing and collecting
lawful revenues from imported articles and all

other tariff and customs duties, fees, charges,
fines and penalties. To this function, arrastre
service is a necessary incident.
G.R. No. L-33112 June 15, 1978

PHILIPPINE NATIONAL BANK vs.
HON. JUDGE JAVIER PABALAN,
Judge of the Court of First
Instance, Branch III, La Union,
AGOO TOBACCO PLANTERS
ASSOCIATION, INC., PHILIPPINE
VIRGINIA TOBACCO
ADMINISTRATION, and PANFILO
P. JIMENEZ, Deputy Sheriff, La
Union
FACTS:
The reliance of petitioner Philippine National
Bank against respondent Judge Javier Pabalan
who issued a writ of execution, followed
thereafter by a notice of garnishment of the
funds of respondent Philippine Virginia Tobacco
Administration, deposited with it, is on the
fundamental constitutional law doctrine of nonsuability of a state, it being alleged that such
funds are public in character.
ISSUE: WON the funds are public in character,
thus immune from suit.
HELD: NO.
It is to be admitted that under the
present Constitution, what was formerly
implicit as a fundamental doctrine in
constitutional law has been set forth in express
terms: "The State may not be sued without its
consent." If the funds appertained to one of
the regular departments or offices in the
government, then, certainly, such a provision
would be a bar to garnishment. Such is not the
case here.
It is well-settled that when the
government enters into commercial business, it
abandons its sovereign capacity and is to be
treated like any other corporation. By engaging
in
a
particular
business
thru
the
instrumentality
of
a
corporation,
the


government divests itself pro hac vice of its
sovereign character, so as to render the
corporation subject to the rules of law
governing private corporations.
G.R. No. L-31635 August 31, 1971

ANGEL MINISTERIO and
ASUNCION SADAYA vs.
THE COURT OF FIRST INSTANCE
OF CEBU, Fourth Branch, Presided
by the Honorable, Judge JOSE C.
BORROMEO, THE PUBLIC
HIGHWAY COMMISSIONER, and
THE AUDITOR GENERAL
FACTS:
Petitioners sought the payment of just
compensation for a registered lot alleging that
in 1927 the National Government through its
authorized representatives took physical and
material possession of it and used it for the
widening of a national road, without paying
just compensation and without any agreement,
either written or verbal. There was an
allegation of repeated demands for the
payment of its price or return of its possession,
but defendants Public Highway Commissioner
and the Auditor General refused to restore its
possession.
ISSUE: WON the defendants are immune from
suit.
HELD: NO.
Where the judgment in such a case
would result not only in the recovery of
possession of the property in favor of said
citizen but also in a charge against or financial
liability to the Government, then the suit
should be regarded as one against the
government itself, and, consequently, it cannot
prosper or be validly entertained by the courts
except with the consent of said Government.
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.
G.R. No. 169304

March
13, 2007
THE DEPARTMENT OF HEALTH,
SECRETARY MANUEL M. DAYRIT,
USEC. MA. MARGARITA GALON
and USEC. ANTONIO M.
LOPEZ, vs.
PHIL. PHARMAWEALTH, INC.
FACTS:
Respondent Phil. Pharmawealth, Inc. is
a domestic corporation engaged in the
business of manufacturing and supplying
pharmaceutical
products
to
government
hospitals in the Philippines. Then Secretary of
Health Alberto G. Romualdez, Jr. issued
Administrative Order (A.O.) No. 27 outlining
the guidelines and procedures on the
accreditation of government suppliers for
pharmaceutical products. A.O. No. 27 was later
amended
by
providing
for
additional
guidelines for accreditation
of
drug
suppliers aimed at ensuring that only qualified
bidders can transact business with petitioner.
Respondent submitted to petitioner
DOH a request for the inclusion of additional
items in its list of accredited drug products,
including
the
antibiotic
"Penicillin
G
Benzathine." DOH issued an Invitation for Bids
for the procurement of 1.2 million units vials of
Penicillin G Benzathine. Despite the lack of
response from petitioner DOH regarding
respondents request for inclusion of additional
items in its list of accredited products,
respondent submitted its bid for the Penicillin G
Benzathine contract. Only two companies
participated, the respondent being the lower
bidder. In view, however, of the nonaccreditation of respondents Penicillin G
Benzathine product, the contract was awarded
to the other company. Hence, respondent filed
a complaint injunction, mandamus and
damages against DOH.


ISSUE: WON DOH can invoke immunity from
suit.
HELD: NO.
The suability of a government official
depends on whether the official concerned was
acting within his official or jurisdictional
capacity, and whether the acts done in the
performance of official functions will result in a
charge or financial liability against the
government. In the first case, the Constitution
itself assures the availability of judicial
review, and it is the official concerned who
should be impleaded as the proper party. As
regards petitioner DOH, the defense of
immunity from suit will not avail despite its
being an unincorporated agency of the
government, for the only causes of action
directed against it are preliminary injunction
and mandamus.
G.R. No. 131544. March 16, 2001

EPG CONSTRUCTION CO., ET. AL.
vs. HONORABLE GREGORIO R.
VIGILAR, In His Capacity as
Secretary of Public Works and
Highways
FACTS:
The Ministry of Human Settlement,
through the BLISS Development Corporation,
initiated a housing project on a government
property along the east bank of the
Manggahan Floodway in Pasig City. For this
purpose, the Ministry of Human Settlement
entered into a Memorandum of Agreement
(MOA) with the Ministry of Public Works and
Highways, where the latter undertook to
develop the housing site and construct thereon
145 housing units. By virtue of the MOA, the
Ministry of Public Works and Highways forged
individual contracts with herein petitioners EPG
Construction Co., et. al. for the construction of

the housing units.
By reason of the verbal request and
assurance of then DPWH that additional funds
would be available and forthcoming, petitioners
agreed to undertake and perform additional
constructions for the completion of the
housing units, despite the absence of
appropriations and written contracts to cover
subsequent expenses for the additional
constructions.
Petitioners
then
received
payment for the construction work duly
covered by the individual written contracts,
thereby
leaving
an
unpaid
balance
representing the additional constructions.
Petitioners sent a demand letter to the
DPWH Secretary and submitted that their claim
for payment was favorably recommended by
DPWH Assistant Secretary for Legal Services
who recognized the existence of implied
contracts covering
the
additional
constructions.
Respondent argues that the State may not
be sued in the instant case, invoking the
constitutional doctrine of Non-suability of the
State, otherwise
known
as
the Royal
Prerogative of Dishonesty.
ISSUE: WON DPWH can invoke state immunity.
HELD: NO.
Under these circumstances, respondent
may not validly invoke the Royal Prerogative
of Dishonesty and conveniently hide under
the States cloak of invincibility against
suit, considering that this principle yields to
certain settled exceptions. True enough, the
rule, in any case, is not absolute for it does not
say that the state may not be sued under any
circumstance. The doctrine of governmental
immunity from suit cannot serve as an
instrument for perpetrating an injustice on a
citizen.
To be sure, this Court as the staunch
guardian of the citizens rights and welfare
cannot sanction an injustice so patent on its
face, and allow itself to be an instrument in the
perpetration thereof. Justice and equity sternly
demand that the States cloak of invincibility
against suit be shred in this particular instance,
and that petitionerscontractors be duly


compensated on the basis of quantum
meruit for construction done on the public
works housing project.
G.R. No. L-48214 December 19,

1978
ILDEFONSO SANTIAGO,
represented by his Attorney-inFact, ALFREDO T. SANTIAGO vs.
FACTS:
Santiagos plea was for the revocation of a
deed of donation executed by him and his
spouse with the Bureau of Plant Industry as
the donee. As alleged in such complaint, such
Bureau, contrary to the terms of the donation,
failed to "install lighting facilities and water
system on the property donated and to build
an office building and parking [lot] thereon
which should have been constructed and ready
for occupancy. That led him to conclude that
under the circumstances, he was exempt from
compliance with such an explicit constitutional
command.
ISSUE: WON the Bureau is immune from suit.

HELD: YES.
If an order of dismissal would suffice,
then the element of unfairness enters, the
facts alleged being hypothetically admitted. It
is the considered opinion of this Court then
that to conform to the high dictates of equity
and justice, the presumption of consent could
be indulged in safely. That would serve to
accord to petitioner as plaintiff, at the very
least, the right to be heard.
The doctrine of governmental immunity
from suit cannot serve as an instrument for
perpetrating an injustice on a citizen.
Under
the
circumstances,
the
fundamental postulate of non-suability cannot
stand in the way. It is made to accommodate
itself to the demands of procedural due
process, which is the negation of arbitrariness
and inequity. The government, in the final
analysis, is the beneficiary. It thereby
manifests its adherence to the highest ethical

standards, which can only be ignored at the
risk of losing the confidence of the people, the
repository of the sovereign power.
G.R. No. L-29993 October 23, 1978

LAUDENCIO TORIO, ET. AL. vs.
ROSALINA, ANGELINA,
LEONARDO, EDUARDO, ARTEMIO,
ANGELITA, ANITA, ERNESTO,
NORMA, VIRGINIA, REMEDIOS
and ROBERTO, all surnamed
FONTANILLA, and THE
HONORABLE COURT OF APPEALS
FACTS:
The Municipal Council of Malasiqui,
Pangasinan, passed a resolution whereby "it
resolved to manage the 1959 Malasiqui town
fiesta celebration. Another resolution was also
passed creating the "1959 Malasiqui 'Town
Fiesta Executive Committee" which in turn
organized a sub-committee on entertainment
and stage. The council appropriated an amount
for the construction of 2 stages, one for the
"zarzuela" and another for the cancionan Jose
Macaraeg supervised the construction of the
stage. The "zarzuela" then began but before
the dramatic part of the play was reached, the
stage collapsed and Vicente Fontanilla who was
at the rear of the stage was pinned
underneath. Fontanilia was taken to the
hospital where he died in the afternoon of the
following day.
The heirs of Vicente Fontanilia filed a
complaint against Municipality. Answering the
complaint defendant municipality invoked inter
alia the principal defense that as a legally and
duly organized public corporation it performs
sovereign functions and the holding of a town
fiesta was an exercise of its governmental
functions from which no liability can arise to
answer for the negligence of any of its agents.
ISSUE: WON the defendant Municipality was
performing sovereign functions therefore
immune from suit.
HELD: NO.


Holding a fiesta even if the purpose is
to commemorate a religious or historical event
of the town is in essence an act for the special
benefit of the community and not for the
general welfare of the public performed in
pursuance of a policy of the state. The mere
fact that the celebration, as claimed was not to
secure profit or gain but merely to provide
entertainment to the town inhabitants is not a
conclusive test. For instance, the maintenance
of parks is not a source of income for the
nonetheless it is private undertaking as
distinguished from the maintenance of public
schools, jails, and the like which are for public
service.
There can be no hard and fast rule for
purposes of determining the true nature of an
undertaking or function of a municipality; the
surrounding circumstances of a particular case
are to be considered and will be decisive. The
basic element, however beneficial to the public
the undertaking may be, is that it is
governmental in essence, otherwise. the
function becomes private or proprietary in
character. Easily, no governmental or public
policy of the state is involved in the celebration
of a town fiesta.
G.R. No. L-52179 April 8, 1991

MUNICIPALITY OF SAN
FERNANDO, LA UNION vs.
HON. JUDGE ROMEO N. FIRME,
ET. AL.
FACTS:
At about 7am of December 16, 1965, a
collision occurred involving a passenger
jeepney driven by Bernardo Balagot (owned by
the Estate of Macario Nieveras), a gravel and
sand truck driven by Jose Manandeg (owned
by Tanquilino Velasquez), and a dump truck of
the Municipality of San Fernando, La Union and
driven by Alfredo Bislig. Due to the impact,
several passengers of the jeepney including
Laureano Bania Sr. died as a result of the
injuries they sustained and four others suffered
varying degrees of physical injuries.
The private respondents instituted a

complaint for damages against the Estate of
Macario Nieveras and Bernardo Balagot, owner
and driver, respectively, of the passenger
jeepney. However, the aforesaid defendants
filed a Third Party Complaint against the
petitioner and the driver of a dump truck of
petitioner.
Petitioner raised as one of its defenses
the non-suability of the State.
ISSUE: WON the Municipality of San Fernando
is immune from suit.
HELD: YES.
Anent the issue of whether or not the
municipality is liable for the torts committed by
its employee, the test of liability of the
municipality depends on whether or not the
driver, acting in behalf of the municipality, is
performing
governmental
or
proprietary
functions.
In the case at bar, the driver of the
dump truck of the municipality insists that "he
was on his way to the Naguilian river to get a
load of sand and gravel for the repair of San
Fernando's municipal streets." We already
stressed
in
the
case
of Palafox,
et. al. vs. Province of Ilocos Norte, the District
Engineer, and the Provincial Treasurer (102 Phil
1186) that "the construction or maintenance of
roads in which the truck and the driver worked
at the time of the accident are admittedly
governmental activities."
We
arrive
at
the
conclusion that
the
municipality cannot be held liable for the torts
committed by its regular employee, who was
then
engaged
in
the
discharge
of
governmental functions. Hence, the death of
the passenger tragic and deplorable though
it may be imposed on the municipality no
duty to pay monetary compensation.
G.R. No. L-30671 November 28,

1973
vs.
HON. GUILLERMO P. VILLASOR,
ET. AL.


diversion of public funds from their legitimate
and specific objects, as appropriated by law.
FACTS:
In the petition filed by the Republic of
the Philippines, a summary of facts was set
forth thus:
A decision was rendered in favor of
respondents P. J. Kiener Co., Ltd., Gavino
Unchuan,
and
International
Construction
Corporation, and against the petitioner herein,
confirming
the arbitration award in the
amount of P1,712,396.40, subject of Special
Proceedings. Respondent Judge Villasor, issued
an Order declaring the aforestated decision
final and executory, directing the Sheriffs of
Rizal Province, Quezon City [as well as] Manila
to execute the said decision. Pursuant to the
said Order, the corresponding Alias Writ of
Execution [was issued]. On the strength of the
afore-mentioned Alias Writ of Execution, the
Provincial Sheriff of Rizal (respondent herein)
served notices of garnishment with several
Banks, specially on the monies due the Armed
Forces of the Philippines in the form of deposits
sufficient to cover the amount mentioned in
the said Writ of Execution. The Philippine
Veterans Bank received the same notice of
garnishment. The funds of the Armed Forces of
the Philippines on deposit with the Banks,
particularly, with the Philippine Veterans Bank
and the Philippine National Bank [or] their
branches are public funds duly appropriated
and allocated for the payment of pensions of
retirees, pay and allowances of military and
civilian personnel and for maintenance and
operations of the Armed Forces of the
Philippines.
ISSUE: WON the Republic can invoke state
immunity from suit.
HELD: YES.
Since government funds and properties
may not be seized under writs of execution or
garnishment to satisfy such judgments, is
based on obvious considerations of public
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 the
A.M. No. RTJ-05-1959

vs. JUDGE VICENTE A. HIDALGO,
Presiding Judge of the Regional
Trial Court of Manila, Branch 37
FACTS:
Tarcila Laperal Mendoza filed an action
for the annulment or declaration of nullity of
the title and deed of sale, reconveyance and/or
recovery of ownership and possession a
property
against
the
Republic
of
the
Philippinesin the RTC of Manila.
It is also known as the Arlegui
Residence which
housed
two
Philippine
presidents and which now holds the Office of
the Press Secretary and the News Information
Bureau.
The case was initially dismissed by the
presiding Judge of the Manila RTC (Branch 35)
on the ground of state immunity. The case was
re-raffled to the Manila RTC (Branch 37), with
respondent Vicente A. Hidalgo as presiding
Judge. In an Order, Judge Hidalgo declared the
Republic in default for failure of Solicitor
Gabriel Francisco Ramirez, the handling
solicitor, to file the required Answer within the
period prayed for in his motion for extension.
It is contended that the respondent
Judge violated the Constitution and the
fundamental rule that government funds are
exempt from execution or garnishment when
he caused the issuance of the writ of execution
against the Republic.
ISSUE: WON the Republic can invoke immunity
from suit.
HELD:
It is settled that when the State gives
its consent to be sued, it does not thereby
necessarily consent to an unrestrained
execution against it. Tersely put, when the
State waives its immunity, all it does, in effect,
is to give the other party an opportunity to
prove, if it can, that the state has a liability.


The functions and public services
rendered by the State cannot be allowed to
paralyzed or disrupted by the diversion of
public funds from their legitimate and specific
objects, as appropriated by law
G.R. Nos. 89898-99 October 1,

1990
MUNICIPALITY OF MAKATI 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
FACTS:
The present petition for review is an
off-shoot of expropriation proceedings initiated
by petitioner Municipality of Makati against
private respondent Admiral Finance Creditors
Consortium, Inc., Home Building System &
Realty Corporation and one Arceli P. Jo,
involving a parcel of land and improvements
and registered in the name of the latter.
It was certified that a bank account
had been opened with the PNB Buendia Branch
under petitioner's name made pursuant to the
provisions of Pres. Decree No. 42. After due
hearing where the parties presented their
respective appraisal reports regarding
the
value of the property, respondent RTC judge
rendered a decision fixing the appraised value
of the property at P5,291,666.00, and ordering
petitioner to pay this amount minus the
advanced payment which was earlier released
to private respondent.
Petitioner however refused to comply
with the garnishment despite its having two
bank accounts in PNB. The first one was
dedicated for expropriation proceedings while
the other was for public funds. The first bank
account cannot cover the remaining amount
due, while the other account had more than
enough to satisfy the amount due. Petitioner
reasoned out that its funds at the PNB Buendia
Branch could neither be garnished nor levied
upon execution, for to do so would result in the

disbursement of public funds without the
proper appropriation required under the law.
ISSUE: WON the Municipality of Makati is
exempt from paying just compensation.
HELD: NO.
For three years now, petitioner has
enjoyed possession and use of the subject
property notwithstanding its inexcusable failure
to comply with its legal obligation to pay just
compensation. Just compensation means not
only the correct determination of the amount
to be paid to the owner of the land but also the
payment of the land within a reasonable time
from its taking. Without prompt payment,
compensation cannot be considered "just" for
the property owner is made to suffer the
consequence of being immediately deprived of
his land while being made to wait for a long
period.
The State's power of eminent domain
should be exercised within the bounds of fair
play and justice. In the case at bar, considering
that valuable property has been taken, the
compensation to be paid fixed and the
municipality is in full possession and utilizing
the property for public purpose, for three (3)
years, the Court finds that the municipality has
had more than reasonable time to pay full
compensation.
G.R. No. 164282 October 12, 2005

TERESITA M. YUJUICO vs.
HON. JOSE L. ATIENZA, ET. AL.
FACTS:
On 8 December 1995, the City Council
of Manila enacted an ordinance authorizing the
City Mayor to acquire by negotiation or
expropriation certain parcels of land for
utilization as a site for the Francisco Benitez
Elementary School. Failing to acquire the land


by negotiation, the City filed a case for
eminent domain against petitioner as owner of
the property.
It is the City School Board which has
the authority to pass a resolution allocating
funds for the full satisfaction of the just
compensation fixed, the said body is hereby
given thirty (30) days from receipt to pass the
necessary resolution for the payments of the
remaining balance due to Yujuico. However,
despite petitioner demanding compliance from
the CSB after 30 days, the latter still did not
take action.
ISSUE: WON respondent is justified in not
paying the petitioner her just compensation.
HELD: NO.
While this Court recognizes the power
of LGU to expropriate private property for
public use, it will not stand idly by while the
expropriating authority maneuvers to evade
the payment of just compensation of property
already in its possession.
The notion of expropriation is hard
enough to take for a private owner. He is
compelled to give up his property for the
common weal. But to give it up and wait in
vain for the just compensation decreed by the
courts is too much to bear. In cases like these,
courts will not hesitate to step in to ensure
that justice and fair play are served.
G.R. No. 77765 August 15, 1988

SEBASTIAN COSCULLUELA vs.
THE HONORABLE COURT OF
APPEALS and the REPUBLIC OF
THE PHILIPPINES, represented by
NATIONAL IRRIGATION
ADMINISTRATION
FACTS:
The Republic of the Philippines filed a

complaint with the Court of First Instance of
Iloilo to expropriate two parcels of land in the
municipality of Barotac, Iloilo owned by
petitioner Sebastian Cosculluela and one Mita
Lumampao, for the construction of the canal
network of the Barotac Irrigation Project.
The trial court rendered a decision
granting the expropriation and ordered the
public respondent to pay Lumampao, the sum
of P20,000 and Cosculluela, the sum of
P200,000.00.
The Republic contends that the funds
of the National Irrigation Authority (NIA) are
government funds and therefore, cannot be
disbursed without a government appropriation.
ISSUE: WON the Republic is exempt from
paying the just compensation demanded by
the petitioner in view of non-disbursement of
funds without prior public appropriation.
HELD: NO.
One of the basic principles enshrined in
our Constitution is that no person shall be
deprived of his private property without due
process of law; and in expropriation cases, an
essential element of due process is that there
must be just compensation whenever private
property is taken for public use.
Just compensation means not only the
correct determination of the amount to be paid
to the owner of the land but also the payment
of the land within a reasonable time from its
taking.
G.R. No. 101949 December 1,

1994
THE HOLY SEE vs.
THE HON. ERIBERTO U.
ROSARIO, JR., as Presiding Judge
of the Regional Trial Court of
Makati, Branch 61 and


STARBRIGHT SALES
ENTERPRISES, INC.
FACTS:
This petition arose from a controversy
over a parcel of land, Lot 5-A, located in the
Municipality of Paraaque, Metro Manila and
registered in the name of petitioner. Said Lot
5-A is contiguous to Lots 5-B and 5-D
registered in the name of the Philippine Realty
Corporation (PRC). The three lots were sold to
Ramon Licup, through Msgr. Domingo A.
Cirilos, Jr., acting as agent to the sellers. Later,
Licup assigned his rights to the sale to private
respondent, Starbright Enterprises.
The squatters refused to vacate the
lots sold to private respondent so a dispute
arose as to who of the parties has the
responsibility of evicting and clearing the land
of squatters occurred. Complicating the
relations of the parties was the sale by
petitioner of Lot 5-A to Tropicana Properties
and Development Corporation (Tropicana).
Private respondent filed a complaint for
annulment of the sale of the three parcels of
land, and specific performance and damages
against petitioner, represented by the Papal
Nuncio, and three other defendants: namely,
Msgr. Domingo A. Cirilos, Jr., the PRC and
Tropicana.
ISSUE: WON the petitioner Holy See is immune
from suit.
HELD: YES.
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.
Lot 5-A was acquired by petitioner as a
donation from the Archdiocese of Manila. The
donation was made not for commercial
purpose, but for the use of petitioner to
construct thereon the official place of residence
of the Papal Nuncio. The right of a foreign
sovereign to acquire property, real or personal,
in a receiving state, necessary for the creation

and maintenance of its diplomatic mission, is
recognized in the 1961 Vienna Convention on
Diplomatic Relations.
In Article 31(a) of the Convention, a
diplomatic envoy is granted immunity from the
civil and administrative jurisdiction of the
receiving state over any real action relating to
private immovable property situated in the
territory of the receiving state which the envoy
holds on behalf of the sending state for the
purposes of the mission. If this immunity is
provided for a diplomatic envoy, with all the
more reason should immunity be recognized as
regards the sovereign itself, which in this case
is the Holy See.
G.R. No. 154705. June 26, 2003

THE REPUBLIC OF INDONESIA,
HIS EXCELLENCY AMBASSADOR
SOERATMIN, and MINISTER
COUNSELLOR 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 with respondent
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 and the
Wisma Duta, the official residence of petitioner
Ambassador
Soeratmin. The
equipment
covered by the Maintenance Agreement are air
conditioning units, generator sets, electrical
facilities, water heaters, and water motor
pumps. It is likewise stated therein that the
agreement shall be effective for a period of
four years and will renew itself automatically
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, they informed
respondent that the renewal of the agreement
shall be at the discretion of the incoming Chief


of Administration. When the Chief of
Administration assumed his position, he
allegedly found respondents work and services
unsatisfactory and not in compliance with the
standards in the Agreement. Hence, the
Indonesian
Embassy
terminated
the
agreement. Petitioners claim, that they had
earlier verbally informed respondent of their
decision to terminate the agreement.
On the other hand, respondent claims that
the aforesaid termination was arbitrary and
unlawful. 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 sovereign State does not
merely establish a diplomatic mission and
leave it at that; the establishment of a
diplomatic
mission
encompasses
its
maintenance and upkeep. Hence, the State
may enter into contracts with private entities
to maintain the premises, furnishings and
equipment of the embassy and the living
quarters of its agents and officials. It is
therefore clear that petitioner Republic of
Indonesia was acting in pursuit of a sovereign
activity when it entered into a contract with
respondent for the upkeep or maintenance.
The Solicitor General, in his Comment,
submits the view that, the Maintenance
Agreement was entered into by the Republic of
Indonesia in the discharge of its governmental
functions. In such a case, it cannot be deemed
to have waived its immunity from suit.
G.R. No. 142396. February 11,

2003
KHOSROW MINUCHER vs. HON.
COURT OF APPEALS and ARTHUR
SCALZO
FACTS:
Sometime in May 1986, an Information for
violation of Section 4 of Republic Act No. 6425,
otherwise also known as the Dangerous Drugs
Act of 1972, was filed against petitioner
Khosrow Minucher and one Abbas Torabian.
The criminal charge followed a buy-bust
operation conducted by the Philippine police

narcotic agents in the house of Minucher, an
Iranian national, where a quantity of heroin, a
prohibited drug, was said to have been
seized. The narcotic agents were accompanied
by private respondent Arthur Scalzo who
would, in due time, become one of the
principal witnesses for the prosecution. On 08
January 1988, Presiding Judge Eutropio Migrino
rendered a decision acquitting the two
accused.
ISSUE: WON respondent Scalzo can invoke
immunity from suit.
HELD: YES.
The doctrine of immunity from suit will not
apply and may not be invoked where the public
official is being sued in his private and personal
capacity as an ordinary citizen. The cloak of
protection afforded the officers and agents of
the government is removed the moment they
are sued in their individual capacity. This
situation usually arises where the public official
acts without authority or in excess of the
powers vested in him
A foreign agent, operating within a
territory, can be cloaked with immunity from
suit but only as long as it can be established
that he is acting within the directives of the
sending state. The consent of the host state is
an indispensable requirement of basic courtesy
between the two sovereigns.
The job description of Scalzo has tasked
him to conduct surveillance on suspected drug
suppliers and, after having ascertained 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 then becoming a
principal witness in the criminal case against
Minucher, Scalzo hardly can be said to have
acted beyond the scope of his official function
or duties.
All told, this Court is constrained to rule
that respondent Arthur Scalzo, an agent of the
United States Drug Enforcement Agency
allowed by the Philippine government to
conduct activities in the country to help contain
the problem on the drug traffic, is entitled to
the defense of state immunity from suit.


G.R. No. 124772
August
14, 2007
PRESIDENTIAL COMMISSION ON
GOOD GOVERNMENT and
MAGTANGGOL C. GUNIGUNDO, in
his capacity as CHAIRMAN thereof
vs.
SANDIGANBAYAN and OFFICECO
HOLDINGS, N.V.
FACTS:
On 7 April 1986, in connection with criminal
proceedings initiated in the Philippines to
locate, sequester and seek restitution of
alleged ill-gotten wealth amassed by the
Marcoses and other accused from the
Philippine Government,1 the Office of the
Solicitor General (OSG) wrote the Federal
Office for Police Matters in Berne, Switzerland,
requesting assistance for the latter office to:
(a) ascertain and provide the OSG with
information as to where and in which cantons
the ill-gotten fortune of the Marcoses and other
accused are located, the names of the
depositors and the banks and the amounts
involved; and (b) take necessary precautionary
measures, such as sequestration, to freeze the
assets in order to preserve their existing value
and prevent any further transfer thereof
(herein referred to as the IMAC request). The
Office of the District Attorney in Zurich,
pursuant to the OSGs request, issued an Order
directing the Swiss Banks in Zurich to freeze
the accounts of the accused.
ISSUE: WON the Swiss officials can invoke
state immunity from suit.
HELD: NO.
The act of state doctrine is one of the
methods by which States prevent their national
courts from deciding disputes which relate to
the internal affairs of another State, the other
two being immunity and non-justiciability. It is
an avoidance technique that is directly related
to a States obligation to respect the
independence and equality of other States by
not requiring them to submit to adjudication in
a national court or to settlement of their
disputes without their consent. It requires the
forum court to exercise restraint in the

adjudication of disputes relating to legislative
or other governmental acts which a foreign
State has performed within its territorial limits.
It is petitioners contention that the
Sandiganbayan "could not grant or deny the
prayers in [Officecos] complaint without first
examining and scrutinizing the freeze order of
the Swiss officials in the light of the evidence,
which however is in the possession of said
officials" and that it would therefore "sit in
judgment on the acts of the government of
another country." We disagree.
The parameters of the use of the act of
state doctrine were clarified in Banco Nacional
de Cuba v. Sabbatino. There, the U.S. Supreme
Court held that international law does not
require the application of this doctrine nor does
it forbid the application of the rule even if it is
claimed that the act of state in question
violated international law. Moreover, due to the
doctrines peculiar nation-to-nation character,
in practice the usual method for an individual
to seek relief is to exhaust local remedies and
then repair to the executive authorities of his
own state to persuade them to champion his
claim in diplomacy or before an international
tribunal.
G.R. No. 125865. January 28, 200

JEFFREY LIANG (HUEFENG) vs.
PEOPLE OF THE PHILIPPINES
FACTS:
Petitioner is an economist working with
the Asian Development Bank (ADB). Sometime
in 1994, for allegedly uttering defamatory
words against fellow ADB worker Joyce Cabal,
he was charged before the Metropolitan Trial
Court (MeTC) of Mandaluyong City with two
counts of grave oral defamation.
Petitioner was arrested by virtue of a
warrant issued by the MeTC. After fixing
petitioners bail, the MeTC released him to the
custody of the Security Officer of ADB. The
next day, the MeTC judge received an "office of
protocol" from the DFA stating that petitioner
is covered by immunity from legal process
under Section 45 of the Agreement between
the ADB and the Philippine Government


regarding the Headquarters of the ADB
(hereinafter Agreement) in the country. Based
on the said protocol communication that
petitioner is immune from suit, the MeTC judge
without notice to the prosecution dismissed the
two criminal cases.
ISSUE: WON petitioner Liang is immune from
suit.
HELD: NO.
Slandering a person could not possibly
be covered by the immunity agreement
because our laws do not allow the commission
of a crime, such as defamation, in the name of
official duty. It is well-settled principle of law
that a public official may be liable in his
personal private capacity for whatever damage
he may have caused by his act done with
malice or in bad faith or beyond the scope of
his authority or jurisdiction.
SEPARATE CONCURRING OPINION OF JUSTICE
PUNO:
The Charter of the ADB provides under Article
55(i) that officers and employees of the bank shall
be immune from legal process with respect to acts
performed by them in their official capacity except
when the Bank waives immunity. Section 45 (a) of
the ADB Headquarters Agreement accords the
same immunity to the officers and staff of the
bank. There can be no dispute that international
officials are entitled to immunity only with
respect to acts performed in their official
capacity, unlike international organizations
which enjoy absolute immunity
Clearly, the most important immunity to an
international official, in the discharge of his
international functions, is immunity from local
jurisdiction. There is no argument in doctrine or
practice with the principle that an international
official is independent of the jurisdiction of the local
authorities for his official acts. Those acts are not
his, but are imputed to the organization, and without
waiver the local courts cannot hold him liable for
them. In strict law, it would seem that even the
organization itself could have no right to waive
an officials immunity for his official acts. This
permits local authorities to assume jurisdiction
over and individual for an act which is not, in
the wider sense of the term, his act at all. It is
the organization itself, as a juristic person,

which should waive its own immunity and
appear in court, not the individual, except
insofar as he appears in the name of the
organization.
Historically, international officials were granted
diplomatic privileges and immunities and were thus
considered immune for both private and official
acts. In practice, this wide grant of diplomatic
prerogatives was curtailed because of practical
necessity and because the proper functioning of the
organization did not require such extensive
immunity for its officials. Thus, the current status
of the law does not maintain that states grant
jurisdictional immunity to international officials
for acts of their private lives.
Under the Vienna Convention on Diplomatic
Relations, a diplomatic envoy is immune from
criminal jurisdiction of the receiving State for all
acts, whether private or official, and hence he
cannot be arrested, prosecuted and punished for
any offense he may commit, unless his diplomatic
immunity is waived.[ On the other hand, officials
of international organizations enjoy functional
immunities, that is, only those necessary for the
exercise of the functions of the organization
and the fulfillment of its purposes. This is the
reason why the ADB Charter and Headquarters
Agreement explicitly grant immunity from legal
process to bank officers and employees only with
respect to acts performed by them in their official
capacity, except when the Bank waives
immunity. In
other
words,
officials
and
employees of the ADB are subject to the
jurisdiction of the local courts for their private
acts, notwithstanding the absence of a waiver
of immunity.
Considering that bank officials and employees are
covered by immunity only for their official acts, the
necessary inference is that the authority of the
Department of Affairs, or even of the ADB for
that matter, to certify that they are entitled to
immunity is limited only to acts done in their
official capacity. Stated otherwise, it is not within
the power of the DFA, as the agency in charge of
the executive departments foreign relations, nor
the ADB, as the international organization vested
with the right to waive immunity, to invoke immunity
for private acts of bank official and employees,
since no such prerogative exists in the first place. If
the immunity does not exist, there is nothing to
certify.

G.R. No. 152318

April 16,
2009
DEUTSCHE GESELLSCHAFT FR
TECHNISCHE
ZUSAMMENARBEIT, ET. AL. vs.
HON. COURT OF APPEALS, ET. AL.
FACTS:
The governments of the Federal
Republic of Germany and the Republic of the
Philippines ratified an Agreement called Social
Health
InsuranceNetworking
and
Empowerment (SHINE which was designed to
"enable Philippine familiesespecially poor
onesto maintain their health and secure
health care of sustainable quality." Private
respondents were engaged as contract
employees hired by GTZ to work for SHINE.
Nicolay, a Belgian national, assumed
the
post
of
SHINE
Project
Manager.
Disagreements eventually arose between
Nicolay and private respondents in matters
such as proposed salary adjustments, and the
course
Nicolay
was
taking
in
the
implementation of SHINE different from her
predecessors.
The dispute culminated in a signed by
the private respondents, addressed to Nicolay,
and copies furnished officials of the DOH,
Philheath, and the director of the Manila office
of GTZ. The letter raised several issues which
private respondents claim had been brought up
several times in the past, but have not been
given appropriate response.
In response, Nicolay wrote each of the
private respondents a letter, all similarly
worded except for their respective addressees.
She informed private respondents that they
could no longer find any reason to stay with
the project unless ALL of these issues be
addressed immediately and appropriately.
Under the foregoing premises and
circumstances, it is now imperative that I am
to accept your resignation, which I expect to
receive as soon as possible.
Negotiations ensued between private
respondents and Nicolay, but for naught. Each
of the private respondents received a letter
from Nicolay, informing them of the pre-
termination of their contracts of employment

on the grounds of "serious and gross
insubordination, among others, resulting to
loss of confidence and trust."
HELD: NO.
This self-description of GTZ in its own
official website gives further cause for pause in
adopting petitioners argument that GTZ is
entitled to immunity from suit because it is "an
implementing agency." The above-quoted
statement
does
not
dispute
the
characterization of GTZ as an "implementing
agency of the Federal Republic of Germany,"
yet it bolsters the notion that as a company
organized under private law, it has a legal
personality independent of that of the Federal
Republic of Germany.
The Court is thus holds and so rules
that GTZ consistently has been unable to
establish with satisfaction that it enjoys the
immunity from suit generally enjoyed by its
parent country, the Federal Republic of
Germany.


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POLITICAL LAW JURISPRUDENCE ATTY.

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