JUL

26

Constitutional law 1 (case digest 4) Doctrine of State Immunity

*some of the case digests are not mine (sources are linked), I will specify if the digests are mine or
not :)
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Basis

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 store manager 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 equipment pursuant
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 the complaint, 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.
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 maxim
par 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 the Commission 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.

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. If this 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 to satisfy 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 claim involving 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 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.

Sources:
Full text of the case
Basis of Doctrine of State Immunity
*this is my digest
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Immunity of Foreign States & Diplomats
Principle of par in parem non habet imperium
Process of Suggestion

G.R. No. 101949 December 1,1994

THE HOLY SEE
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of theRegional Trial Court of
Makati,Branch 61 and STARBRIGHT SALESENTERPRISES, INC.

FACTS:
This petition arose from a controversyover a parcel of land, Lot 5-A, located in theMunicipality of
Parañaque, Metro Manila andregistered in the name of petitioner. Said Lot5-A is contiguous to Lots
5-B and 5-Dregistered in the name of the Philippine RealtyCorporation (PRC). The three lots were
sold toRamon Licup, through Msgr. Domingo A.Cirilos, Jr., acting as agent to the sellers.Later, Licup
assigned his rights to the sale toprivate respondent, Starbright Enterprises.The squatters refused to
vacate thelots sold to private respondent so a disputearose as to who of the parties has
theresponsibility of evicting and clearing the landof squatters occurred. Complicating therelations of
the parties was the sale bypetitioner of Lot 5-A to Tropicana Propertiesand Development
Corporation (Tropicana).Private respondent filed a complaint forannulment of the sale of the three
parcels of land, and specific performance and damagesagainst petitioner, represented by the
PapalNuncio, and three other defendants: namely,Msgr. Domingo A. Cirilos, Jr., the PRC and
Tropicana.

ISSUE: WON the petitioner Holy See isimmune from suit.

HELD: YES.The logical question is whether the foreign state is engaged in the activity in theregular
course of business. If the foreign stateis not engaged regularly in a business or trade,the particular
act or transaction must then betested by its nature. If the act is in pursuit of asovereign activity, or an
incident thereof, thenit is an act jure imperii , especially when it isnot undertaken for gain or profit.Lot
5-A was acquired by petitioner as a donation from the Archdiocese of Manila. Thedonation was
made not for commercialpurpose, but for the use of petitioner to construct thereon the official place
of residenceof the Papal Nuncio. The right of a foreign sovereign to acquire property, real or
personal,in a receiving state, necessary for the creationand maintenance of its diplomatic mission, is
recognized in the 1961 Vienna Convention onDiplomatic Relations.In Article 31(a) of the Convention,
a diplomatic envoy is granted immunity from thecivil and administrative jurisdiction of the receiving
state over any real action relating toprivate immovable property situated in the territory of the
receiving state which the envoyholds on behalf of the sending state for thepurposes of the mission. If
this immunity is provided for a diplomatic envoy, with all themore reason should immunity be
recognized as regards the sovereign itself, which in this caseis the Holy See
SALIENT POINTS:

There are two conflicting concepts of sovereign immunity, according to the Supreme Court: (a)
Classical or absolute theory — a sovereign cannot, without its consent, be made a respondent in the
courts of another sovereign; and (b) Restrictive theory — the immunity of the sovereign is
recognized only with regard to public acts or acts jure imperii (public acof a state, but not with regard
to private acts or acts jure gestionis.

ACTS JURE IMPERII AND JURE GESTIONIS. - "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 state, but not with regard to private act or acts jure
gestionis. x x x Certainly, the mere entering into a contract by a foreign state with a private 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.
How does the Philippine government treat the Holy See or Vatican?

The Philippines has accorded the Holy See the status of a foreign sovereign. The Holy See, through
its Ambassador, the Papal Nuncio, has had diplomatic representations with the Philippine
government since 1957. This appears to be the universal practice in international relations.

What is the treaty that governs the sovereign immunity of diplomats and other state agents?

The Vienna Convention on Diplomatic Relations, which was ratified on 18 April 1961, is a
codification of centuries-old customary law affording protection to foreign diplomats. The Convention
lists the classes of heads of diplomatic missions to include
(a) ambassadors or nuncios accredited to the heads of state,
(b) envoys, ministers or internuncios accredited to the heads of states; and
(c) charges d’ affairs accredited 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.

Par in parem imperium non habet. An equal has no power over an equal. Jenk. Cent. 174.
Example: One of two judges of the same court cannot commit the other for contempt.

Sources:
Full text of case
Case digest
http://legal-dictionary.thefreedictionary.com/Par+in+parem+imperium+non+habet
http://jlp-law.com/blog/immunity-from-suit-of-an-international-organization-and-its-officers/

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Determination of Immunity by the Department of Foreign Affairs

G.R. No. 125865 January 28, 2000

JEFFREY LIANG (HUEFENG), petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.

FACTS: Petitioner is an economist working with the Asian Development Bank. Sometime in 1994,
for allegedly uttering defamatory words against fellow ADB worker Joyce Cabal, he was charged
before the Metropolitan Trial Court of Mandaluyong City with two counts of grave oral defamation.
Petitioner was arrested by virtue of a warrant issued by the MeTC. MeTC Judge received an “office
of protocol” from the Department of Foreign Affairs 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 in the country. The MeTC judge without notice
to the prosecution dismissed the case based from the said protocol.
The latter filed a motion for reconsideration which was opposed by the DFA. When its motion was
denied, the prosecution filed a petition for certiorari and mandamus with the RTC of Pasig City which
set aside the MeTC rulings and ordered the latter court to enforce the warrant of arrest it earlier
issued.

After the motion for reconsideration was denied, petitioner elevated the case to this court via a
petition for review arguing that he is covered by immunity under the Agreement and that no
preliminary investigation was held before the criminal cases were filed in court.

ISSUE: Whether immunity invoked by DFA for ADB employees based on the Agreement is
cognizable in our courts.

HELD: The immunity mentioned therein is not absolute, but subject to the exception that the act was
done in “official capacity.” The prosecution should have been given the chance to rebut the DFA
protocol and it must be accorded the opportunity to present its controverting evidence.

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 a 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. Under the Vienna Convention on Diplomatic Relations, the commission of a
crime is not part of official duty.
The petition is therefore denied.

SALIENT POINTS:

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.[18] In Holy See vs. Hon. Rosario, Jr.,[19]
this Court has explained the matter in good detail; viz:

"In Public International Law, when a state or international agency wishes to plead sovereign or
diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is sued to
convey to the court that said defendant is entitled to immunity.

"In the United States, the procedure followed is the process of 'suggestion,' where the foreign state
or the international organization sued in an American court requests the Secretary of State to make
a determination as to whether it is entitled to immunity. If the Secretary of State finds that the
defendant is immune from suit, he, in turn, asks the Attorney General to submit to the court a
'suggestion' that the defendant is entitled to immunity. In England, a similar procedure is followed,
only the Foreign Office issues a certification to that effect instead of submitting a 'suggestion'
(O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign
Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).

"In the Philippines, the practice is for the foreign government or the international organization to first
secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how the
Philippine Foreign Office conveys its endorsement to the courts varies. In International Catholic
Migration Commission vs. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a
letter directly to the Secretary of Labor and Employment, informing the latter that the respondent-
employer could not be sued because it enjoyed diplomatic immunity. In World Health Organization
vs. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to
that effect. In Baer vs. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign
Affairs to request the Solicitor General to make, in behalf of the Commander of the United States
Naval Base at Olongapo City, Zambales, a 'suggestion' to respondent Judge. The Solicitor General
embodied the 'suggestion' in a manifestation and memorandum as amicus curiae.

"In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved
with this Court to be allowed to intervene on the side of petitioner. The Court allowed the said
Department to file its memorandum in support of petitioner's claim of sovereign immunity.

"In some cases, the defense of sovereign immunity was submitted directly to the local courts by the
respondents through their private counsels (Raquiza vs. Bradford, 75 Phil. 50 [1945]; Miquiabas vs.
Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America vs. Guinto, 182 SCRA
644 [1990] and companion cases). In cases where the foreign states bypass the Foreign Office, the
courts can inquire into the facts and make their own determination as to the nature of the acts and
transactions involved."

Sources:
Full text of case
Case digest
http://sc.judiciary.gov.ph/jurisprudence/1996/sept1996/113191.htm
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Immunity of International Organizations and Agencies
G.R. No. 86773 February 14, 1992
SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT
(SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE
DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents.

FACTS: SEAFDEC-AQD is a department of an international organization, the Southeast Asian

Fisheries Development Center, organized through an agreement entered into in Bangkok, Thailand
on December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia
and the Philippines with Japan as the sponsoring country (Article 1, Agreement Establishing the
SEAFDEC).

On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of
termination to private respondent informing him that due to the financial constraints being
experienced by the department, his services shall be terminated at the close of office hours on May
15, 1986 and that he is entitled to separation benefits equivalent to one (1) month of his basic salary
for every year of service plus other benefits (Rollo, p. 153).

Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter filed
on March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral
damages and attorney's fees with the Arbitration Branch of the NLRC (Annex "C" of Petition for
Certiorari).

Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the case
inasmuch as the SEAFDEC-AQD is an international organization and that private respondent must
first secure clearances from the proper departments for property or money accountability before any
claim for separation pay will be paid, and which clearances had not yet been obtained by the private
respondent.

A formal hearing was conducted whereby private respondent alleged that the non-issuance of the
clearances by the petitioners was politically motivated and in bad faith. On the other hand,
petitioners alleged that private respondent has property accountability and an outstanding obligation
to SEAFDEC-AQD in the amount of P27,532.11. Furthermore, private respondent is not entitled to
accrued sick leave benefits amounting to P44,000.00 due to his failure to avail of the same during
his employment with the SEAFDEC-AQD

ISSUE: Whether or not the National Labor Relations Commissions has jurisdiction over the case.

HELD: The Court held that the present petition relates to a controversy between two claimants to
the same position; this is not a controversy between the SEAFDEC on the one hand, and an officer
or employee, or a person claiming to be an officer or employee, of the SEAFDEC, on the other hand.
There is before us no question involving immunity from the jurisdiction of the Court, there being no
plea for such immunity whether by or on behalf of SEAFDEC, or by an official of SEAFDEC with the
consent of SEAFDEC (Id., at 300; emphasis supplied).

WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the

courts or local agency of the Philippine government, the questioned decision and resolution of the
NLRC dated July 26, 1988 and January 9, 1989, respectively, are hereby REVERSED and SET
ASIDE for having been rendered without jurisdiction. No costs.
SALIENT POINTS:

(A) Permanent international commissions and administrative bodies have been created by the
agreement of a considerable number of States for a variety of international purposes, economic or
social and mainly non-political. Among the notable instances are the International Labor
Organization, the International Institute of Agriculture, the International Danube Commission. In so
far as they are autonomous and beyond the control of any one State, they have a distinct juridical
personality independent of the municipal law of the State where they are situated. As such,
according to one leading authority "they must be deemed to possess a species of international
personality of their own." (Salonga and Yap, Public International Law, 83 [1956 ed.])

The then Minister of Justice likewise opined that Philippine Courts have no jurisdiction over
SEAFDEC-AQD in Opinion No. 139, Series of 1984 —

(B) 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. (See Jenks, Id., pp. 37-44) 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 there 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. In the case
at bar, for instance, the entertainment by the National Labor Relations Commission of Mr.
Madamba's reinstatement cases would amount to interference by the Philippine Government in the
management decisions of the SEARCA governing board; even worse, it could compromise the
desired impartiality of the organization since it will have to suit its actuations to the requirements of
Philippine law, which may not necessarily coincide with the interests of the other member-states. It is
precisely to forestall these possibilities that in cases where the extent of the immunity is specified in
the enabling instruments of international organizations, jurisdictional immunity from the host country
is invariably among the first accorded. (See Jenks, Id.; See also Bowett, The Law of International
Institutions, pp. 284-1285).

SELECTED DOCUMENTS RELATING TO THE FUND, THE UNITED NATIONS, AND OTHER
INTERNATIONAL ORGANIZATIONS

ARTICLE VI
Officials

SECTION 18
Each specialized agency will specify the categories of officials to which the provisions of this Article
and of Article VIII shall apply. It shall communicate them to the Governments of all States parties to
this Convention in respect of that agency and to the Secretary-General of the United Nations. The
names of the officials included in these categories shall from time to time be made known to the
above-mentioned Governments.

SECTION 19
Officials of the specialized agencies shall:
(a) Be immune from legal process in respect of words spoken or written and all acts performed by
them in their official capacity;
(b) Enjoy the same exemptions from taxation in respect of the salaries and emoluments paid to them
by the specialized agencies and on the same conditions as are enjoyed by officials of the United
Nations;
(c) Be immune, together with their spouses and relatives dependent on them, from immigration
restrictions and alien registration;
(d) Be accorded the same privileges in respect of exchange facilities as are accorded to officials of
comparable rank of diplomatic missions;
(e) Be given, together with their spouses and relatives dependent on them, the same repatriation
facilities in time of international crises as officials of comparable rank of diplomatic missions;
(f) Have the right to import free of duty their furniture and effects at the time of first taking up their
post in the country in question.

Source:
Full text of case
*this digest is mine
http://www.imf.org/external/pubs/ft/sd/index.asp?decision=DN22

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G.R. No. 106483 May 22, 1995
ERNESTO L. CALLADO, petitioner,
vs.
INTERNATIONAL RICE RESEARCH INSTITUTE, respondent.

Facts:
Ernesto Callado, petitioner, was employed as a driver at the IRRI. One day whiledriving an IRRI
vehicle on an official trip to the NAIA and back to the IRRI, petitioner figured in an accident.Petitioner
was informed of the findings of a preliminary investigation conducted by the IRRI's Human Resource
Development Department Manager. In view of the findings, hewas charged with:
(1) Driving an institute vehicle while on official duty under the influence of liquor;
(2) Serious misconduct consisting of failure to report tosupervisors the failure of the vehicle to start
because of a problem with the car battery, and
(3) Gross and habitual neglect of duties.

Petitioner submitted his answer and defenses to the charges against him.However, IRRIissued a
Notice of Termination to petitioner.

Thereafter, petitioner filed a complaint before the Labor Arbiter for illegal dismissal, illegal
suspension and indemnity pay with moral and exemplary damages and attorney's fees.IRRI wrote
the Labor Arbiter to inform him that the Institute enjoys immunity from legal process by virtue of
Article 3 of Presidential Decree No. 1620, and that it invokes suchdiplomatic immunity and privileges
as an international organization in the instant casefiled by petitioner, not having waived the
same.While admitting IRRI's defense of immunity, the
Labor Arbiter, nonetheless, cited anOrder issued by the Institute to the effect that "in all cases of
termination, respondentIRRI waives its immunity," and, accordingly, considered the defense of
immunity nolonger a legal obstacle in resolving the case.The NLRC found merit in private
respondent's appeal and, finding that IRRI did not waiveits immunity, ordered the aforesaid decision
of the Labor Arbiter set aside and thecomplaint dismissed.In this petition petitioner contends that the
immunity of the IRRI as an internationalorganization granted by Article 3 of Presidential Decree No.
1620 may not be invoked inthe case at bench inasmuch as it waived the same by virtue of its
Memorandum on"Guidelines on the handling of dismissed employees in relation to P.D. 1620."

Issue:
Did the (IRRI) waive its immunity from suit in this dispute which arose from an employer-employee
relationship?
Held:

No.P.D. No. 1620, Article 3 provides:

Art.3. Immunity from Legal Process. The Institute shall enjoy immunity from any penal,civil and
administrative proceedings, except in so far as that immunity has been expressly waived by the
Director-General of the Institute or his authorized representatives.

The SC upholds the constitutionality of the aforequoted law. There is in this case "acategorical
recognition by the Executive Branch of the Government that IRRI enjoysimmunities accorded to
international organizations, which determination has been held to be a political question conclusive
upon the Courts in order not to embarrass a politicaldepartment of Government.

It is a recognized principle of international law and under our system of separation of powersthat
diplomatic immunity is essentially a political question and courts should refuse to lookbeyond a
determination by the executive branch of the government, and where the plea of diplomatic immunity
is recognized and affirmed by the executive branch of the government asin the case at bar, it is then
the duty of the courts to accept the claim of immunity uponappropriate suggestion by the principal
law officer of the government or other officer actingunder his direction.

The raison d'etre for these immunities is the assurance of unimpeded performance of their functions
by the agencies concerned.The grant of immunity to IRRI is clear and unequivocal and an express
waiver by its Director-General is the only way by which it may relinquish or abandon this immunity.In
cases involving dismissed employees, the Institute may waive its immunity, signifying that such
waiver is discretionary on its part.

Sources:
Full text of case
Case digest
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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").
Uponreceipt of summonses, both the ADB and the DFA notified the Labor Arbiter that the ADB, as
well as itsPresident and Officers, were covered by an immunity from legal process except for
borrowings,guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of the
Agreement Establishingthe Asian Development Bank (the "Charter") in relation to Section 5 and
Section 44 of the AgreementBetween 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 thatthe ADB had waived its diplomatic immunity from suit, and issued a
judgment in favor of thecomplainant. The ADB did not file an appeal, but the DFA sought a
nullification with the NLRC. The latterdenied the request.Issue: Whether or not ADB is immune from
suit? Ruling: No. Under the Charter and HeadquartersAgreement, 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 Bank’s 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 aretreaty covenants and
commitments voluntarily assumed by the Philippine government which must be respected. Being an
international organization that has been extended a diplomatic status, the ADB isindependent 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 state, but not with regard to private act or acts jure gestionis. Certainly, the mere
entering into a contract by a foreign state with a private 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 sovereignactivity, or an
incident thereof, then it is an act jure imperii, especially when it is not undertaken for gainor profit.
The service contracts referred to by private respondent have not been intended by the ADB forprofit
or gain but are official acts over which a waiver of immunity would not attach.

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.

Sources:
Full text of case
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Immunity of Government Agencies
Incorporated
Municipal Corporations

G.R. No. L-52179 April 8, 1991

MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner
vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIÑA, IAUREANO BANIÑA, JR., SOR
MARIETA BANIÑA, MONTANO BANIÑA, ORJA BANIÑA, AND LYDIA R. BANIÑA, respondents.

Facts:Petitioner is a municipal corporation existing under and in accordance with the laws of the
Republic of the Philippines. At about 7 am of December 16, 1965, a collision occurred involving a
passenger jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a
gravel and sand truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump
truck of the petitioner and driven by Alfredo Bislig. Several passengers of the jeepney including
Laureano Baniña Sr. died as a result of the injuries they sustained and 4 others suffered physical
injuries.

Private respondents instituted an action against Nieveras and Balagot before the CFI. The
defendants filed a third party complaint against petitioner and Bislig. The complaint was then
amended to implead petitioner and Bislig. Petitioner raised as defense lack of cause of action, non
suability of the State, prescription and negligence of the owner and driver of the jeepney.

The trial court rendered a decision ordering the petitioner and Bislig to pay the plaintiffs. The owner
and driver of the jeepney were absolved from liability. Petitioner filed an MR which was dismissed for
having been filed out of time.

Issue:WON the court committed grave abuse of discretion when it deferred and failed to resolve the
defense of non-suability of the State amounting to lack of jurisdiction in a motion to dismiss.

Held:Yes

Ratio: In the case at bar, the judge deferred the resolution of the defense of non-suability of the
State until trial.

However, the judge failed to resolve such defense, proceeded with the trial and then rendered a
decision against the municipality and its driver. The judge did not commit GAD when it arbitrarily
failed to resolve the issue of non-suability of the State in the guise of the municipality. However, the
judge acted in excess of his jurisdiction when in his decision he held the municipality liable for the
quasi-delict committed by its regular employee.

The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the
Consti, to wit: "the State may not be sued without its consent." Express consent may be embodied in
a general law or a special law. The standing consent of the State to be sued in case of money claims
involving liability arising from contracts is found in Act No. 3083. A special law may be passed to
enable a person to sue the government for an alleged quasi-delict. Consent is implied when the
government enters into business contracts, thereby descending to the level of the other contracting
party, and also when the State files a complaint, thus opening itself to a counterclaim.

Municipal corporations are agencies of the State when they are engaged in governmental functions
and therefore should enjoy the sovereign immunity from suit. Nevertheless, they are subject to suit
even in the performance of such functions because their charter provided that they can sue and be
sued.

A distinction should first be made between suability and liability. "Suability depends on the consent
of the state to be sued, liability on the applicable law and the established facts. The circumstance
that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be
held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the
state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only
giving the plaintiff the chance to prove, if it can, that the defendant is liable."

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 (Torio vs. Fontanilla). According to
City of Kokomo vs Loy(Indiana SC), municipal corporations exist in a dual capacity, and their
functions are twofold. In one they exercise the right springing from sovereignty, and while in the
performance of the duties pertaining thereto, their acts are political and governmental. Their officers
and agents in such capacity, though elected or appointed by them, are nevertheless public
functionaries performing a public service, and as such they are officers, agents, and servants of the
state. In the other capacity the municipalities exercise a private, proprietary or corporate right, arising
from their existence as legal persons and not as public agencies. Their officers and agents in the
performance of such functions act in behalf of the municipalities in their corporate or individual
capacity, and not for the state or sovereign power."

It has already been remarked that municipal corporations are suable because their charters grant
them the competence to sue and be sued. Nevertheless, they are generally not liable for torts
committed by them in the discharge of governmental functions and can be held answerable only if it
can be shown that they were acting in a proprietary capacity.

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." In the absence of any evidence to the contrary, the regularity of the performance of official
duty is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We
rule that the driver of the dump truck was performing duties or tasks pertaining to his office.We
already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District Engineer, and
the Provincial Treasurer 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."

After a careful examination of existing laws and jurisprudence, 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.

Sources:
Full text of case
Case digest
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Unincorporated
If principal function is governmental
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 ofManila
carrying among others, 80 bales of screen net consigned to Baging BuhayTrading (Baging Buhay).
The import was classified under Tariff Heading no. 39.06-B of theTariff and Customs Code at 35%
ad valorem. Bagong Buhay paid the duties and taxesdue in the amount of P11,350.00.The Office of
the Collector of Customs ordered a re-examination of the shipment uponhearing the information that
the shipment consisted of mosquito net made of nylonunder Tariff Heading No. 62.02 of the Tariff
and Customs Code. Upon re-examination, itturns out that the shipment was undervalued in quantity
and value as previouslydeclared. Thus the Collector of Customs forfeited the shipment in favor of
thegovernment.Private respondent filed a petition on August 20, 1976 for the release of the
questionedgoods which the Court denied. On June 2,1986, 64 bales out of the 80 bales
werereleased to Bagong Buhay after several motion. The sixteen remaining bales weremissing. The
respondent claims that of the 143,454 yards released, only 116,950 yardswere in good condition and
the rest were in bad condition. Thus, respondents demandsthat the Bureau of Customs be ordered
to pay for damages for the 43,050 yards itactually lost.

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

Held:
Bureau of Customs cannot be held liable for actual damages that the privaterespondent sustained
with regard to its goods. Otherwise, to permit privaterespondent's claim to prosper would violate the
doctrine of sovereignimmunity. 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
isobvious 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. Alongwith the Bureau of
Internal Revenue, it is invested with an inherent power of sovereignty,namely taxation. As an
agency, the Bureau of Customs performs the governmentalfunction of collecting revenues which is
defined not a proprietary function. Thus privaterespondents claim for damages against the
Commissioner of Customs must fails.

Sources:
Full text of case
Case digest

If proprietary suable
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Suits against Public Officers

G.R. No. 97882 August 28, 1996
THE CITY OF ANGELES, Hon. ANTONIO ABAD SANTOS, in his capacity as MAYOR of
Angeles City, and the SANGGUNIANG PANLUNGSOD OF THE CITY OF ANGELES,
petitioners,
vs.
COURT OF APPEALS and TIMOG SILANGAN DEVELOPMENT CORPORATION, respondents.

*will make digest of this on Saturday (July 28, 2012)

Sources:
Full text of case
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G.R. No. 91359, September 25, 1992
VETERANS MANPOWER AND PROTECTIVE SERVICES, INC., PETITIONER,
vs.
THE COURT OF APPEALS, THE CHIEF OF PHILIPPINE CONSTABULARY AND PHILIPPINE
CONSTABULARY SUPERVISORY UNIT FOR SECURITY AND INVESTIGATION AGENCIES (PC-
SUSIA), RESPONDENTS.

FACTS:
This is a petition for review on certiorari of the decision dated August 11, 1989. On May 12, 1986, a
Memorandum of Agreement was executed by PADPAO and the PC Chief, which fixed the minimum
monthly contract rate per guard for eight (8)hours of service security per day. On June 29, 1987,
Odin Security Agency filed a complaint with PADPAO accusing VMPSI of cut-throat competition.
PADPAO and PC-SUSIA found VMPSI guilty and recommended its expulsion from PADPAO and
thecancellation of its license to operate a security agency. As a result, PADPAO refused to issue a
clearance/certificate of membership to VMPSI when it requested one. VMPSI filed Civil Case No. 88-
471 against the PC-Chief and PC-SUSIA in theRTC-Makati Branch 135, on March 28, 1988. On the
same date, the court issued a restraining order enjoining the PC Chief andPC-
committing acts that would result in the cancellation or non-renewa
Chief and PC-

had not given consent thereto and

the restraining order or preliminary injunction would not serve any purpose because there was
nomore license to be cancelled. Respondent VMPSI opposed the motion. On April 18, 1988 the
lower co
VMPSI reiterated its application for the issuance of preliminary injunction because PC-SUSIA had
rejected payment of the penalty for its failure to submit its application forrenewal of its license. On
June 10, 1988, the RTC-Makati issued a writ of preliminary injunction upon a bond of

PC-Chief and PC-SUSIA filed a Motion forReconsideration of the above order, but it was denied by
the court. On November 3, 1988, the PC-Chief and PC-SUSIA soughtrelief by a petition for certiorari
in the Court of Appeals. On August 11, 1989, the Court of Appeals granted the petition.
HELD:
Wherefore, the petition for review is DENIED and the judgment appealed from is AFFIRMED
in toto.

The State may notbe sued without its consent. Invoking this rule, the PC Chief and PC-SUSIA, being
instrumentalities of the national governmentexercising a primarily governmental function of
regulating the organization and operation of private detective, watchmen, orsecurity guard agencies,

nt seeks not only to compel the public respondents to act in a

certain way, but worse, because VMPSIseeks actual and compensatory damages in the sum

said public respondents. Even if its action prospers, the payment of its monetary claims may not
beenforced because the State did not consent to appropriate the necessary funds for that purpose.

PRINCIPLE:
State's immunity from suit.

Sources:
Full text of case
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209 SCRA 357 (28 May 1992)
M.H. Wylie and Capt. James Williams
vs.
Aurora I. Rarang and the IAC

FACTS:
AT THE NAVAL BASE. In Feb. 1978, M.H. Wylie was the assistant administrative officer and Capt.
James Williams was the commanding officer of the US Naval Base in Subic Bay, Olongapo City.
Aurora I. Rarang was employed as a merchandise control guard in the Office of the Provost
Marshal.

THE “POD”. Wylie, in his capacity as asst. admin. officer, supervised the publication of the Naval
Base station’s “Plan of the Day” (POD), which featured important announcements, necessary
precautions, and general matters of interest to military personnel. One of its regular features was the
“action line inquiry.”

THE CAUSE OF THIS MESS. On Feb. 3, 1978, the POD published, under the “NAVSTA Action Line
Inquiry,” the ff:
Question: I have observed that Merchandise Control inspector/ inspectress are (sic) consuming for
their own benefit things they have confiscated from Base Personnel. The observation is even more
aggravated by consuming such confiscated items as cigarettes and food stuffs PUBLICLY. This is
not to mention ‘Auring’ who is in herself, a disgrace to her division and to the Office of the Provost
Marshal. In lieu of this observation, may I therefore, ask if the head of the Merchandise Control
Division is aware of this malpractice?

Answer: Merchandise Control Guards and all other personnel are prohibited from appropriating
confiscated items for their own consumption or use. Two locked containers are installed at the Main
Gate area for deposit of confiscated items and the OPM evidence custodian controls access to these
containers. Merchandise Control Guards are permitted to eat their meals at their worksite due to
heavy workload. Complaints regarding merchandise control guards procedure or actions may be
made directly at the Office of the Provost Marshal for immediate and necessary action….

Rarang was the “Auring” referred to here, as she was the only one with that name in the Office of the
Provost Marshall, and Wylie’s letter of apology for the “inadvertent” publication was also conclusive
proof of this.

AN ACTION FOR DAMAGES was instituted by Rarang against Wylie, Williams, and the US Naval
Base. She prayed for P300K moral damages, exemplary damages, and P50K attorney’s fees.

RARANG’S ALLEGATIONS: the article constituted false, injurious, and malicious defamation and
libel tending to impeach her honesty, virtue and reputation exposing her to public hatred, contempt
and ridicule; and that the libel was published and circulated in the English language and read by
almost all the U.S. Naval Base personnel.

WYLIE, WILLIAMS, THE NAVAL BASE FILED A MOTION TO DISMISS, BASED ON THESE
GROUNDS:
1. Wylie and Williams acted in the performance of their official functions as officers of the US Navy
and are immune from suit;
2. The US Naval Base is an instrumentality of the US government which cannot be sued without its
consent; and
3. lack of jurisdiction over the subject matter and the parties.

MOTION DENIED.

THE TC’S DECISION: the acts of Wylie and Williams weren’t official acts of the US government in
the operation and control of the Base but personal and tortious acts which are exceptions to the
general rule that a sovereign country can’t be sued in the court of another country without its
consent. Thus their acts weren’t imputable against the US government but were done in their
individual and personal capacities. They were ordered to pay Rarang P100K moral and exemplary
damages, and P30K attorney’s fees. However, the suit against the US Naval Base was dismissed.

BOTH PARTIES APPEALED. Wylie and Williams asserted that they are immune from suit since the
publication was made in their official capacities as officers of the U. S. Navy, and that they did not
intentionally and maliciously cause the publication. Rarang appealed as she wasn’t satisfied with the
award.

THE IAC MODIFIED THE TC’S DECISION: Rarang was awarded P175K moral damages and P60K
exemplary damages.

WYLIE AND WILLIAMS’ ARGUMENT in this Petition for Review: they made the publication in the
performance of their official functions as administrative assistant (Wylie) and commanding officer
(Williams) of the US Navy and were, therefore, immune from suit for their official actions.

ISSUE: WON Wylie and Williams are liable for the published article in the POD. Does the grant of
rights, power, and authority to the US under the RP-US Bases Treaty cover immunity of its officers
from crimes and torts?

HELD: YES and NO respectively.

THE PRINCIPLE OF STATE IMMUNITY FROM SUIT, QUOTING US v. GUINTO: The rule that a
state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987
Constitution, is one of the generally accepted principles of international law that we have adopted as
part of the law of our land under Article II, Section 2…Even without such affirmation, we would still
be bound by the generally accepted principles of international law under the doctrine of incorporation
… As applied to the local state, the doctrine of state immunity is based on the justification given by
Justice Holmes that ‘there can be no legal right against the authority which makes the law on which
the right depends! (Kawanakoa v. Polybank) There are other practical reasons for the enforcement
of the doctrine. In the case of the foreign state sought to be impleaded in the local jurisdiction, the
added inhibition is expressed in the maxim par in parem, non habet imperium . All states are
sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would, in
the language of a celebrated case, ‘unduly vex the peace of nations.’ (Da Haber v. Queen of
Portugal)

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 (Garcia v. Chief of Staff). In such a situation, the
state may move to dismiss the complaint on the ground that it has been filed without its consent.

The doctrine is sometimes derisively called ‘the royal prerogative of dishonesty’ because of the
privilege it grants the state to defeat any legitimate claim against it by simply invoking its non-
suability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling tyrant
unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does not say the
state may not be sued under any circumstance. On the contrary, the rule says that the state may not
be sued without its consent, which clearly imports that it may be sued if it consents. The consent of
the state to be sued may be manifested expressly or impliedly. Express consent may be embodied
in a general law or a special law. Consent is implied when the state enters into a contract it itself
commences litigation…The above rules are subject to qualification. Express consent is effected only
by the will of the legislature through the medium of a duly enacted statute. (Rep. v. Purisima)… not
all contracts entered into by the government will operate as a waiver of its non-suability; distinction
must be made between its sovereign and proprietary acts (US v. Ruiz). As for the filing of a
complaint by the government, suability will result only where the government is claiming affirmative
relief from the defendant. (Lim v. Brownell)

THE NATURE AND EXTENT OF IMMUNITY FROM SUIT, ALSO UNDER US v. GUINTO: In the
case of the US, the customary rule of international law on state immunity is expressed with more
specificity in the RP-US Bases Treaty …

The petitioners also rely heavily on Baer v. Tizon… to support their position that they are not suable,
the US not having waived its sovereign immunity from suit. It is emphasized that in Baer, the Court
held:

“The invocation of the doctrine of immunity from suit of a foreign state without its consent is
appropriate… insofar as alien armed forces are concerned, the starting point is Raquiza v. Bradford,
a 1945 decision. In dismissing a habeas corpus petition for the release of petitioners confined by
American army authorities, Justice Hilado cited Coleman v. Tennessee, where it was explicitly
declared: ‘It is well settled that a foreign army, permitted to march through a friendly country or to be
stationed in it, by permission of its government or sovereign, is exempt from the civil and criminal
jurisdiction of the place.’ Two years later, in Tubb and Tedrow v. Griess, this Court relied on Raquiza
v. Bradford and cited in support excerpts from the works of the authoritative writers … Accuracy
demands the clarification that after the conclusion of the Philippine-American Military Bases
Agreement, the treaty provision should control on such matter, the assumption being that there was
a manifestation of the submission to jurisdiction on the part of the foreign power whenever
appropriate. More to the point is Syquia v. Almeda Lopez … It was the ruling that respondent Judge
acted correctly considering that the ‘action must be considered as one against the U.S.
Government.’ The opinion of Justice Montemayor continued: ‘It is clear that the courts of the
Philippines including the Municipal Court of Manila have no jurisdiction over the present case for
unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very
beginning of the action. The U.S. Government has not given its consent to the filing of this suit which
is essentially against her, though not in name. Moreover, this is not only a case of a citizen filing a
suit against his own Government without the latter’s consent but it is of a citizen filing an action
against a foreign government without said government’s consent, which renders more obvious the
lack of jurisdiction of the courts of his country. The principles of law behind this rule are so
elementary and of such general acceptance that we deem it unnecessary to cite authorities in
support thereof.”

The above observations do not confer on the US a blanket immunity for all acts done by it or its
agents in the Philippines. Neither may the other petitioners claim that they are also insulated from
suit in this country merely because they have acted as agents of the US in the discharge of their
official functions. There is no question that the US, like any other state, will be deemed to have
impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity.
It is only when the contract involves its sovereign or governmental capacity that no such waiver may
be implied … In the words of Justice Vicente Abad Santos:

“The traditional rule of immunity excepts a State from being sued in the courts of another State
without its consent or waiver. This rule is a necessary consequence of the principles of
independence and equality of States. However, the rules of International Law are not petrified; they
are constantly developing and evolving. And because the activities of states have multiplied, it has
been necessary to distinguish them-between sovereign and governmental acts (jure imperii) and
private, commercial and proprietary acts (jure gestionis). The result is that State immunity now
extends only to acts jure imperii... The restrictive application of State immunity is proper only when
the proceedings arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State may be said to have descended to 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.”

The other petitioners in the cases before us all aver they have acted in the discharge of their official
functions as officers or agents of the US. However, this is a matter of evidence. The charges against
them may not be summarily dismissed on their mere assertion that their acts are imputable to the
US, which has not given its consent to be sued. In fact, the defendants are sought to be held
answerable for personal torts in which the US itself is not involved. If found liable, they and they
alone must satisfy the judgment.

SUMMARY OF THE EVENTS. The POD was published under the direction and authority of the
commanding officer. The administrative assistant, among his other duties, is tasked to prepare and
distribute the POD. The NAVSTA Action Line Inquiry is a regular feature of the POD , which was to
provide personnel access to the Commanding Officer on matters they feel should be brought to his
attention for correction or investigation . According to Wylie, the action line naming “Auring” was
received about 3 weeks prior to the article’s publication. It was forwarded to the Provost Marshal for
comment, and the response “… included a short note stating that if the article was published, to
remove the name.” This note was forwarded to the executive officer and to the commanding officer
for approval. The approval of the commanding officer was forwarded to the office of the
Administrative Assistant for inclusion in the POD. A clerk typist in the office of the Administrative
Assistant prepared the smooth copy of the POD and Wylie, the administrative assistant signed the
smooth copy of the POD but failed to notice the reference to “Auring” in the action line inquiry.
As the article implied that Rarang was consuming and appropriating confiscated items, she was
investigated by her supervisor. Before the article came out, she had been the recipient of
commendations by her superiors for honesty in the performance of her duties.

PART OF OFFICIAL FUNCTIONS. Wylie and Williams actively participated in screening the features
and articles in the POD as part of their official functions. Under the rule that US officials in the
performance of their official functions are immune from suit, then it should follow that they may not
be held liable for the questioned publication.

BUT: TAKE NOTE THAT THEY WERE SUED IN THEIR PERSONAL CAPACITIES for their alleged
tortious acts in publishing a libelous article. And our laws and, we presume, those of the US don’t
allow the commission of crimes in the name of official duty, and these aren’t covered by the
immunity agreement.

CHAVEZ v. SANDIGANBAYAN on the law on immunity from suit of public officials is applicable
here: the general rule is that public officials can be held personally accountable for acts claimed to
have been performed in connection with official duties where they have acted ultra vires or where
there is showing of bad faith… A mere invocation of the immunity clause does not ipso facto result in
the charges being automatically dropped. In the case of PCGG v. Peña, Chief Justice Teehankee
added a clarification of the immunity accorded PCGG officials under Section 4(a) of Exec. Order No.
I as follows:

…First, the main opinion does not claim absolute immunity for the members of the Commission, The
cited section … provides the Commission’s members immunity from suit thus: ‘No civil action shall
lie against the Commission or any member thereof for anything done or omitted in the discharge of
the task contemplated by this order.’ No absolute immunity like that sought by Mr. Marcos in his
Constitution for himself and his subordinates is herein involved. It is understood that the immunity
granted the members of the Commission by virtue of the unimaginable magnitude of its task to
recover the plundered wealth and the State’s exercise of police power was immunity from liability for
damages in the official discharge of the task granted the members of the Commission much in the
same manner that judges are immune from suit in the official discharge of the functions of their
office.

Immunity from suit cannot institutionalize irresponsibility and nonaccountability nor grant a privileged
status not claimed by any other official of the Republic. Where the petitioner exceeds his authority as
Solicitor General, acts in bad faith, or … ‘maliciously conspir(es) with the PCGG commissioners in
persecuting respondent Enrile by filing against him an evidently baseless suit in derogation of the
latter’s constitutional rights and liberties’, there can be no question that a complaint for damages
does not confer a license to persecute or recklessly injure another. The actions governed by Articles
19, 20, 21, and 32 of the Civil Code on Human Relations may be taken against public officers or
private citizens alike.

ARGUMENT: that Williams as commanding officer is far removed in the chain of command from the
offensive publication and it would be asking too much to hold him responsible for everything which
goes wrong on the base.

WHILE THIS IS TRUE AS A GEN. RULE, FOR THIS CASE NO. The records show that the offensive
publication was sent to the commanding officer for approval and he approved it. Art. 2176 prescribes
a civil liability for damages caused by a person’s act or omission constituting fault or negligence.
“Fault” or “negligence” in this Article covers not only acts “not punishable by law” but also acts
criminal in character, whether intentional or voluntary or negligent. ” Moreover, Art. 2219(7) provides
that moral damages may be recovered in case of libel, slander or any other form of defamation. In
effect, the offended party in these cases is given the right to receive from the guilty party moral
damages for injury to his feelings and reputation in addition to punitive or exemplary damages .

ULTRA VIRES ACT CAN’T BE PART OF OFFICIAL DUTY. Indeed the imputation of theft contained
in the POD is a defamation against Rarang’s character and reputation. Wylie himself admitted that
the Office of the Provost Marshal explicitly recommended the deletion of the name if the article was
published, but they were negligent because under their direction they issued the publication without
deleting the name. Such act or omission is ultra vires and cannot be part of official duty. It was a
tortious act which ridiculed Rarang, and as a result she suffered besmirched reputation, serious
anxiety, wounded feelings and social humiliation, specially so, since the article was baseless and
false. Wylie and Williams alone, in their personal capacities, are liable for the damages they caused.

WHEREFORE, the petition is hereby DISMISSED. The questioned decision and resolution of the
IAC are AFFIRMED.

Sources:
http://dcomfortroom.blogspot.com/2010/01/wylie-v-rarang-209-scra-357-1992.html
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Consent to be sued
Express Consent

Republic v. Feliciano, 148 SCRA 424 * can't find texts or digest

General Law

CA 327; PD 1445; Art. 2180; Act No. 3038 * can't find this either

Special Law

191 Merrit vs. Government of the Philippine Islands 34 Phil. 311

FACTS
When the plaintiff, riding on a motorcycle, was going toward the western part of Calle Padre Faura,
passing along the west side thereof at a speed of ten to twelvemiles an hour, upon crossing Taft
Avenue and when he was ten feet from thesouthwestern intersection of said streets, the General
Hospital ambulance, uponreaching said avenue, instead of turning toward the south, after passing
the centerthereof, so that it would be on the left side of said avenue, as is prescribed by
theordinance and the Motor Vehicle Act, turned suddenly and unexpectedly and long before
reaching the center of the street, into the right side of Taft Avenue, withouthaving sounded any
whistle or horn, by which movement it struck the plaintiff, who was already six feet from the
southwestern point or from the post place there.
By reason of the resulting collision, the plaintiff was so severely injured that,according to Dr.
Saleeby, who examined him on the very same day that he was takento the General Hospital, he was
suffering from a depression in the left parietalregion, a would in the same place and in the back part
of his head, while bloodissued from his nose and he was entirely unconscious.

As a consequence of the loss the plaintiff suffered in the efficiency of his work as acontractor, he
had to dissolved the partnership he had formed with the engineer. Wilson, because he was
incapacitated from making mathematical calculations onaccount of the condition of his leg and of his
mental faculties, and he had to give upa contract he had for the construction of the Uy Chaco
building.
 As the negligence which caused the collision is a tort committed by an agent oremployee of the
Government, the inquiry at once arises whether the Government islegally-liable for the damages
resulting therefrom.

ISSUES & ARGUMENTS

W/N the Government is liable?

HOLDING & RATIO DECIDENDI

Paragraph 5 of article 1903 of the Civil Code reads: The state is liable in this sense when it acts
through a special agent, but not whenthe damage should have been caused by the official to whom
properly it pertainedto do the act performed, in which case the provisions of the preceding article
shallbe applicable.

The supreme court of Spain in defining the scope of this paragraph said:
That the obligation to indemnify for damages which a third person causes toanother by his fault or
negligence is based, as is evidenced by the same Law 3, Title15, Partida 7, on that the person
obligated, by his own fault or negligence, takes partin the act or omission of the third party who
caused the damage. It followstherefrom that the state, by virtue of such provisions of law, is not
responsible forthe damages suffered by private individuals in consequence of acts performed by
itsemployees in the discharge of the functions pertaining to their office, becauseneither fault nor
even negligence can be presumed on the part of the state in theorganization of branches of public
service and in the appointment of its agents; onthe contrary, we must presuppose all foresight
humanly possible on its part in orderthat each branch of service serves the general weal an that of
private personsinterested in its operation. Between these latter and the state, therefore, no
relationsof a private nature governed by the civil law can arise except in a case where thestate acts
as a judicial person capable of acquiring rights and contracting obligations.(Supreme Court of Spain,
January 7, 1898; 83 Jur. Civ., 24.)

It is, therefore, evidence that the State (the Government of the Philippine Islands) isonly liable,
according to the above quoted decisions of the Supreme Court of Spain,for the acts of its agents,
officers and employees when they act as special agents within the meaning of paragraph 5 of article
1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an
agent.

Sources:
http://www.scribd.com/doc/25402344/3D-2009-Torts-Digest
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Implied Consent
When State commences litigation

G.R. No. L-11897 October 31, 1964

FERNANDO A. FROILAN, plaintiff-appellee,
vs.
PAN ORIENTAL SHIPPING COMPANY, defendant-appellant,
REPUBLIC OF THE PHILIPPINES, and COMPANIA MARITIMA, intervenors-appellees.

FACTS: Defendant Pan Oriental took possession of the vesselin question after it had been
repossessed by the ShippingAdministration and title thereto reacquired by thegovernment, following
the original purchaser, FernandoFroilan’s, default in his payment of the unpaid balanceand
insurance premiums for the said vessel. Pan Orientalchartered said vessel and operated the same
after it hadrepaired the vessel and paid the stipulated initial payment, thereby exercising its option to
purchase, pursuant to a bareboat charter contract entered betweensaid company and the Shipping
Corporation.The Cabinet resolved to restore Froilan to his rightsunder the original contract of sale on
condition that heshall pay a sum of money upon delivery of the vessel tohim, that he shall continue
paying the remaininginstallments due, and that he shall assume the expensesincurred for the repair
and by docking of the vessel. PanOriental protested to this restoration of Froilan’s rightsunder the
contract of sale, for the reason that when thevessel was delivered to it, the Shipping
Administrationhad authority to dispose of said authority to the property,Froilan having already
relinquished whatever rights hemay have thereon. Froilan paid the required cash of P10,000.00 and
as Pan Oriental refused to surrender possession of the vessel, he filed an action for in the CFIof
Manila to recover possession thereof and have himdeclared the rightful owner of said property.The
Republic of the Philippines was allowed tointervene in said civil case praying for the possession of
the in order that the chattel mortgage constituted thereonmay be foreclosed.

ISSUE: Whether or not the government’s motion to dismissPan Oriental counterclaims may prosper.

HELD:Under the circumstances already ad voted to, PanOriental cannot be considered a possessor
in bad faithuntil after the institution of the instant case. However,since it is not disputed that said
appellant is entitled tothe refund of such expenses with the right to retain thevessel until he has been
reimbursed therefore. As it is bythe corrected acts of defendant and intervenor Republicof the
Philippines that the appellant ha a lien far hisexpenses, appellees Froilan, Compania Maratma, and
theRepublic of the Philippines are declared liable for thereimbursement to appellant of its legitimate
expenses, asallowed by law, with legal interest from the time of disbursement.

Sources:
Full text of case
Case digest
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When State enters into a business contract

US Vs. Ruiz 136 SCRA 487

Facts:
The usa had a naval base in subic, zambales. The base was one of those provided in the military
bases agreement between phils. and the US. Respondent alleges that it won in the bidding
conducted by the US for the constrcution of wharves in said base that was merely awarded to
another group. For this reason, a suit for specific preformance was filed by him against the US.

Issue: Whether the US naval base in bidding for said contracts exercise governmental functions to
be able to invoke state immunity.

Held:
The traditional role of the state immunity excempts a state from being sued in the courts of another
state without its consent or waiver. This rule is necessary consequence of the principle of
indepemndence and equality of states. Howecer, the rules of international law are not petrified; they
are continually and evolving and because the activities of states have multiplied. It has been
necessary to distinguish them between sovereign and governmental acts and private, commercial
and proprietory acts. the result is that state immunity now extends only to sovereign and
governmental acts.

The restrictive application of state immunity is proper only when the proceedings arise out of
commercial transactions of the foreign sovereign. Its commercial activities of economic affairs. A
state may be descended to 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
conracts relates the exercise of its sovereign function. In this case, the project are integral part of the
naval base which is devoted to the defense of both US and phils., indisputably, a function of the
government of highest order, they are not utilized for , nor dedicated to commercial or business
purposes.

Source:
http://idiotscasedigest.blogspot.com/2009/07/us-vs-ruiz-136-scra-487.html
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Suability not outright liability

Meritt v. Gov't. of the Phil. Islands, 34 Phil. 311 *given

G.R. No. L-55963 December 1, 1989

SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners,
vs.
HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION ADMINISTRATION,
respondents

FACTS: On December 1, 1989, the Court rendered a decision declaring National Irrigation
Administration(NIA), a government agency performing proprietary functions. Like an ordinary
employer, NIA washeld liable for the injuries, resulting in death, of Francisco Fontanilla, son of
petitioner spouses Jose
and Virginia Fontanilla, caused by the fault and/or negligence of NIA’s driver employee Hugo Garcia;
and NIA was ordered to pay the petitioners the amounts of P 12,000 for the death of the
victim;P3,389 for hospitalization and burial expenses; P30,000 as moral damages; P8,000 as
exemplary
damages, and attorney’s fees of 20% of the total award.

The National Irrigation Administration (NIA) maintains, however, that it does not perform solely
andprimarily proprietary functions, but is an agency of the government tasked with
governmentalfunctions, and is therefore not liable for the tortuous act of its driver Garcia, who was
not its specialagent. For this, they have filed a motion for reconsideration on January 26, 1990.NIA
believes this bases this on:PD 552

amended some provisionsof 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 agovernmental function because the nature of its powers and
functions does not show that it was intended to “bring to the Government any special corporate
benefit or pecuniary profit”, a strong dissenting opinion held that Angat River system 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 not stipulate the same
would terminate on July 7 1976, since his services were five years, he had acquired the status of
regular employee and could not be removed except forvalid cause.The employment contract of 1971
was executed when the Labor Code of the Philippines had not yetbeen promulgated, which came
into effect some 3 years after the perfection of the contract.

ISSUE: Whether or not NIA is a government agency with a juridical personality separate and distinct
fromthe government, thereby opening it up to the possibility that it may be held liable for the
damagescaused by its driver, who was not its special agent

HELD: YES.
Reasoning the functions of government have been classified into governmental or constituent
andproprietary or ministrant. The former involves the exercise of sovereignty and considered
ascompulsory; the latter connotes merely the exercise of proprietary functions and thus considered
asoptional.The National Irrigation Administration was not created for purposes of local government.
While itmay be true that the NIA was essentially a service agency of the government aimed at
promotingpublic interest and public welfare, such fact does not make the NIA essentially and purely
a"government-function" corporation. NIA was created for the purpose of "constructing,
improving,rehabilitating, and administering all national irrigation systems in the Philippines, including
allcommunal and pump irrigation projects." Certainly, the state and the community as a whole
arelargely benefited by the services the agency renders, but these functions are only incidental to
theprincipal aim of the agency, which is the irrigation of 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 theNational Irrigation Administration. . .
. which shall be organized immediately after the approval of this Act. It shall have its principal seat of
business in the City of Manila and shall have representativesin all provinces, for the proper conduct
of its business. (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
constructedby or under its administration, such fees or administration charges as may be necessary
to cover thecost of operation, maintenance and insurance, and to recover the cost of construction
within areasonable period of time to the extent consistent with government policy; to recover funds
orportions thereof expended for the construction and/or rehabilitation of communal irrigation
systemswhich funds shall accrue to a special fund for irrigation development under section 2 hereof:

Unpaid irrigation fees or administration charges shall be preferred liens first, upon the landbenefited,
and then 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 oradministration
charges are paid or the property is levied upon and sold by the National IrrigationAdministration for
the satisfaction thereof. . . .The same section also provides that NIA may sue and be sued in court.It
has its own assets and liabilities. It also has corporate powers to be exercised by a Board of
Directors. Section 2, subsection (f): . . . and to transact such business, as are directly or
indirectlynecessary, incidental or conducive to the attainment of the above powers and objectives,
includingthe power to establish and maintain subsidiaries, and in general, to exercise all the powers
of acorporation under the Corporation Law, insofar as they are not inconsistent with the provisions of
this Act.DISPOSITION:

The court concluded that the National Irrigation Administration is a governmentagency with a
juridical personality separate and distinct from the government. It is not a mereagency of the
government but a corporate body performing proprietary functions.

Therefore, it maybe held liable for the damages caused by the negligent act of its driver who was not
its special agent.ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is
DENIED WITH FINALITY.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 fordamages arising from tort committed by its employees, is
still another thing.The state or a government agency performing governmental functions may be held
liable for tortcommitted by its employees only when it acts through a special agent.

Sources:
Full text of case
Case digest
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Consent to be sued does not include consent to execution

G.R. No. L-30671 November 28, 1973

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I,
THE PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF
OF THE CITY OF MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J.
KIENER CO., LTD., GAVINO UNCHUAN, AND INTERNATIONAL CONSTRUCTION
CORPORATION, respondents.

Facts: On July 7, 1969, a decision was rendered in Special Proceedings No. 2156-R infavor of
respondents P.J. Kiener Co., Ltd., Gavino Unchuan, and InternationalConstruction Corporation and
against petitioner confirming the arbitration award in theamount of P1,712,396.40.The award is for
the satisfactionof a judgment against thePhlippine Government.On June 24, 1969, respondent
Honorable Guillermo Villasor issued an Orderdeclaring thedecision final and executory.Villasor
directed the Sheriffs of RizalProvince, Quezon City as well as Manilato execute said decision.The
Provincial Sheriffof Rizal served Notices of Garnishment with several Banks,specially on
PhilippineVeterans Bank and PNB.The funds of the Armed Forces of the Philippines on deposit with
PhilippineVeterans Bank andPNB are public funds duly appropriated and allocated for thepayment of
pensions of retirees, pay andallowances of military and civilian personneland for maintenance and
operations of the AFP.Petitioner, on certiorari, filed prohibition proceedings against respondent
JudgeVillasor for acting in excess of jurisdiction with grave abuse of discretion amounting tolack of
jurisdiction in grantingthe issuance of a Writ of Execution against the propertiesof the AFP, hence
the notices and garnishment arenull 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 theConstitution.It
isa fundamental postulate of constitutionalism flowing from the juristicconcept of sovereignty that the
stateas well as its government is immune from suitunless it gives its consent.A sovereign is exempt
from suit,not because of any formalconception or obsolete theory, but on the logical and practical
ground that therecan beno legal right as against 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 logicand
soundsense from a basic concept is that public funds cannot be the object of agarnishment
proceeding even if theconsent to be sued had been previously granted andthe state liability
adjudged.The universal rule that wherethe State gives its consent tobe sued by private parties either
by general or special law, it may limitclaimant’s actiononly up to the completion of proceedings
anterior to the stage of execution and thatthepower of the Courts ends when the judgment is
rendered, since the government fundsand properties maynot be seized under writs of execution or
garnishment to satisfy suchjudgments, is based on obviousconsiderations of public
policy.Disbursements of publicfunds must be covered by the correspondingappropriation as required
by law.Thefunctions and public services rendered by the State cannot be allowedto be paralyzedor
disrupted by the diversion of public funds from their legitimate and specific objects,asappropriated by
law.

Sources:
Full text of case
Case digest
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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, RODOLFO IMPERIO, CONRADO IMPERIO, ERNESTO IMPERIO,
ALFREDO IMPERIO, CARLOS IMPERIO, JR., JUAN IMPERIO and SPOUSES MARCELO PINEDA
and LUCILA PONGCO, respondents.

*will make digest of this on Saturday (July 28, 2012)

Source:
Full text of case
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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 exclusively for 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 the PNB 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 such amount minus the advanced payments it has made.
After this decision became final and executory, a writ of execution was issued and a Notice of
Garnishment was served by respondent sheriff upon the manager of the PNB Buendia Branch.
However, respondent sheriff was informed that a "hold code" was placed on the account of
petitioner. Private respondent then filed a motion praying for the court to order the bank to deliver to
the sheriff the unpaid 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 no longer 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 was then approved by the court. The court
further ordered PNB Buendia Branch to immediately release to PSB the sum of P4,953,506.45
which corresponds to the balance of the appraised value of the subject property, from the garnished
account of petitioner but the bank failed to comply as it was still waiting for proper authorization from
the PNB head office enabling it to make a disbursement for the amount so ordered.

As the case was in the Supreme Court, petitioner raised for the first time that it had two accounts
with PNB Buendia Branch: one was made exclusively for the expropriation of the subject property,
and the other is for statutory obligations 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 of petitioner municipality.

Held:
In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution,
unless otherwise provided for by statute. More particularly, the properties of a municipality, whether
real or personal, which are necessary for public use cannot be attached and sold at execution sale
to satisfy a money judgment against the municipality. Municipal revenues derived from taxes,
licenses and market fees, and which are intended primarily and exclusively for the purpose of
financing the governmental activities and functions of the municipality, are exempt from execution.
The foregoing rule finds application in the case at bar. Absent a showing that the municipal council
of Makati has passed an ordinance appropriating from its public funds an amount corresponding to
the balance due under 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 Savings Bank, Inc. and private respondent the amount of P4,953,506.45. Petitioner is
hereby required to submit to this Court a report of its compliance with the foregoing order within a
non-extendible period of SIXTY (60) DAYS from the date of receipt of this resolution.

Sources:
Full text of case
Case digest
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Immunity cannot be used to perpetrate an injustice on a citizen

I got this portion of Information about the Ministerio v. CFI of Cebu, 40 SCRA 464
http://www.lawphil.net/judjuris/juri1993/jun1993/gr_71998_99_1993.html

That the principle of state immunity from suit cannot be invoked to defeat petitioners' claim has long
been settled. In Ministerio v. Court of First Instance of Cebu, 7 the Court held:

. . . . The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating
an injustice on a citizen. Had the government followed the procedure indicated by the governing law
at the time, a complaint would have been filed by it, and only upon payment of the compensation
fixed by the judgment, or after tender to the party entitled to such payment of the amount fixed, may
it "have the right to enter in and upon the land so condemned" to appropriate the same to the public
use defined in the judgment. If there were an observance of procedural regularity, petitioners would
not be in the said plaint they are now. It is unthinkable then that precisely because there was a
failure to abide by what the law requires, the government would stand to benefit. It just as important,
if not more so, that there be fidelity to legal norms on the part of the officialdom if the rule of law were
to be maintained. It is not too much to say that when the government takes any property for public
use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it
makes manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine
of immunity from suit could still be appropriately invoked.

We find the facts of the Ministerio case on all fours with the instant cases insofar as the fact that the
respondent government officials executed a shortcut in appropriating petitioners' property for public
use is concerned. As in the Amigable case, no expropriation proceedings were initiated before
construction of the projects began. In like manner, nowhere in his pleadings in the cases at bar does
the Solicitor General mention that the fact that expropriation proceedings had in fact been
undertaken before the road and artificial creek were constructed. Thus, quoting the answer of the
defendants in Civil Case No. 46801, the Solicitor General summarized the facts which defendants
considered as constituting justification for the construction as follows:

10. The construction of the road and creek in question on the property which at the time was
said to be public property, was initiated, and construction effected, through the usual and ordinary
course, as shown by the following:

a. November 5, 1979 — Engr. Data who was the incumbent District Engineer submitted (thru
channels) plans, program of works and detailed estimates for approval of higher authorities, thru the
initiation of Mayor Ynares and Assemblyman Gilberto Duavit;

b. February 18, 1980 — Regional Director Eduardo L. Lagunilla, MPW Region IV, EDSA,
Quezon City endorsed said request to the Minister of Public Works;.

c. February 13, 1981 — Assemblyman Gilberto Duavit sent a hand-written follow-up note
regarding the project;

d. June 17, 1981 — The undersigned defendant Nestor Agustin was designated Chief Civil
Engineer of the Rizal Engineer District, Vice Engr. Cresencio Data who reached his compulsory
retirement age;

e. September 23, 1981 — Funds in the amount of P588,000.00 was released for partial
implementation of the project. The total amount requested was P1,200,000. 00;

f. October 19, 1981 — The undersigned submitted a request to the MPWH Central Office
seeking authority to effect implementation of the project;

g. October 29, 1981 — The Regional Director approved the plans and program of works for the
project in the amount of P588,000.00;

h. November 11, 1981 — The Honorable Minister Jesus S. Hipolito granted the request to
undertake the implementation of the project;

i. November 25, 1981 — Project implementation was started;

j. March 3, 1982 — Construction of rock bulkhead was completed;

k. November 23, 1982 — P249,000.00 was released for improvement (deepening and diverting
of flow) of Binangonan River which was a complimentary structure of Binangonan port system;

l. April 9, 1982 — Implementation was started. Contract for this project was approved by the
Regional Director in favor of EDILBERTO CADIENTE CONSTRUCTION;

m. May 21, 1982 — Deepening slightly of the adjacent portion of the rock bulkhead was
completed