STATE

Collector of Internal Revenue vs Antonio Campos Rueda [G.R. L-13250]

Facts: ​Maria Cerdiera is a Spanish national (Filipina married to a Spanish citizen),

lived in Morocco and died there. In the Philippines, she left intangible properties. The
person tasked as administrator of the intangible properties is Antonio Campos Rueda.
He filed a provisional estate and inheritance tax return on all properties left by her. The
Collector of Internal Revenue, the respondent, pending the investigation of the tax value
of the properties, issued an assessment for estate tax worth P111,592.48 and inheritance
tax worth P187,791.48 with a total amount of P369,383.96. These tax liabilities were
paid by Antonio Rueda. Later, Campos Rueda filed an amended tax return wherein the
properties worth P396,308.90 are claimed as exempt from taxes. Respondent, still
pending investigation on the same subject, issued another assessment for estate tax
worth P202,262.40 and inheritance taxed worth P267,402.84 with a total amount of
P469,665.24.

Issues: ​Respondent’s reply to the request for exemption of taxes, etc.:

(1) There is no reciprocity as it did not meet the requirements mentioned in Section 122
of the National Internal Revenue Code. Tangier is a mere principality and not a foreign
country. (Note: As argued, section 122, in relation to the case, grants certain exemption
of taxes provided that ‘reciprocity’ be met and for reciprocity to be met, Tangier must be
a foreign country within the meaning of Section 122).
(2) Respondent denied request for exemption because the law of Tangier is not
reciprocal to Section 122 of the National Internal Revenue Code.
(3) Respondent demanded the payment of the sums of 239,439.49 representing
deficiency estate and inheritance tax including ad valorem penalties, surcharges,
interests and compromise penalties.

The Court of Tax Appeals ruled:

(1) Tangier allows a similar law for the exemption of taxes. Such exemption is sufficient
to entitle Antonio Rueda to the exemption benefits. There is no lack of reciprocity.
(2) Whether the requisites of statehood is necessary (sine qua non) for the acquisition of
international personality.
(3) Whether acquisition of international personality is required for a ‘foreign country’ to
fall within the exemption of Section 122 of the National Internal Revenue Code.
The Supreme Court referred the case back to the Court of Tax Appeals to determine
whether the alleged law of Tangier did grant the reciprocal tax exemption required by
Section 122.

Held:
(1) Requisite of Statehood is necessary.
It does not admit of doubt that if a foreign country is to be identified with a state, it is
required in line with Pound’s formulation that:“it be a politically organized sovereign
community independent of outside control bound by penalties of nationhood, legally
supreme within its territory, acting through a government functioning under a regime of
law.”
(2) Tangier is a state.
(3) Section 122 does not require that the “foreign country” possess an international
personality. In other words, international personality is not a requisite.
(4) Supreme Court affirms Court of Tax Appeals ruling. (Note: Look at the ruling of the
Court of Appeals found in the issue.)

Magalona vs Ermita

Facts: ​In March 2009, R.A. 9522 was enacted by the Congress to comply with the terms
of the United Nations Convention on the Law of the Sea (UNCLOS III), which the
Philippines ratified on February 27, 1984. Professor Merlin Magallona et al questioned
the validity of RA 9522 as they contend, among others, that the law decreased the
national territory of the Philippines. Some of their particular arguments are as follows:

1. RA 9522 reduces Philippine maritime territory, and logically, the reach of the
Philippine state’s sovereign power, in violation of Article 1 of the 1987
Constitution, embodying the terms of the Treaty of Paris and ancillary treaties.
2. RA 9522 opens the country’s waters landward of the baselines to maritime
passage by all vessels and aircrafts, undermining Philippine sovereignty and
national security, contravening the country’s nuclear-free policy, and damaging
marine resources, in violation of relevant constitutional provisions.
3. RA 9522’s treatment of the KIG as “regime of islands” not only results in the loss
of a large maritime area but also prejudices the livelihood of subsistence
fishermen.

Hence, petitioners files action for writs of certiorari and prohibition assails the
constitutionality of Republic Act No. 95221 (RA 9522) adjusting the country’s
archipelagic baselines and classifying the baseline regime of nearby territories.
Issue: ​Whether or not RA 9522, the amendatory Philippine Baseline Law is
unconstitutional.

Discussions:​The provision of Art I 198 Constitution clearly affirms the archipelagic

doctrine, which we connect the outermost points of our archipelago with straight
baselines and consider all the waters enclosed thereby as internal waters. RA 9522, as a
Statutory Tool to Demarcate the Country’s Maritime Zones and Continental Shelf Under
UNCLOS III, gave nothing less than an explicit definition in congruent with the
archipelagic doctrine.

Rulings:
No. The Court finds R.A. 9522 constitutional. It is a Statutory Tool to Demarcate the
Country’s Maritime Zones and Continental Shelf Under UNCLOS III, not to Delineate
Philippine Territory. It is a vital step in safeguarding the country’s maritime zones. It
also allows an internationally-recognized delimitation of the breadth of the Philippine’s
maritime zones and continental shelf.

Additionally, The Court finds that the conversion of internal waters into archipelagic
waters will not risk the Philippines as affirmed in Article 49 of UNCLOS III, an
archipelagic State has sovereign power that extends to the waters enclosed by the
archipelagic baselines, regardless of their depth or distance from the coast. It is further
stated that the regime of archipelagic sea lanes passage will not affect the status of its
archipelagic waters or the exercise of sovereignty over waters and airspace, bed and
subsoil and the resources therein.

The Court further stressed that the baseline laws are mere mechanisms for the UNCLOS
III to precisely describe the delimitations. It serves as a notice to the international
family of states and it is in no way affecting or producing any effect like enlargement or
diminution of territories.

CO KIM CHAN v. VALDEZ TAN KEH

FACTS: ​The respondent judge refused to take cognizance of the case and to continue
the proceedings in petitioner’s case on the ground that the proclamation, issued on
October 23, 1944, by General Douglas MacArthur had invalidated and nullified all
judicial proceedings and judgments of the court during the Japanese occupation.
Respondent contends that the lower courts have no jurisdiction to continue pending
judicial proceedings and that the government established during the Japanese
occupation was no de facto government.
ISSUES​:
1. Do the judicial acts and proceedings of the court during the Japanese occupation
remain good and valid?
2. Did the proclamation of MacArthur invalidate all judgments and judicial acts and
proceedings of said court?
3. May the present courts continue those proceedings pending in said courts?

HELD: ​It is evident that the Philippine Executive Commission was a civil government
established by military forces and thus a de facto government of the second kind.
Legislative, as well as judicial, acts of de facto governments, which are not of political
complexion, remain valid after reoccupation. It is presumed that the proclamation of
General MacArthur did not specifically refer to judicial processes thus it has not
invalidated all the judgments and proceedings of the courts during the Japanese regime.
The existence of the courts depends upon the laws which create and confer upon them
their jurisdiction. Such laws, not political in nature, are not abrogated by a change of
sovereignty and continue in force until repealed by legislative acts. It is thus obvious
that the present courts have jurisdiction to continue proceedings in cases, not of
political complexion.

PVTA v CIR Digest

Facts: ​This case involves the expanded role of the government necessitated by the
increased responsibility to provide for the general welfare.
In 1966 private respondents filed a petition seeking relief for their alleged overtime
services and the petitioner’s failure to pay for said compensation in accordance with CA
No. 444. Petitioner denied the allegations for lack of a cause of cause of action and lack
of jurisdiction. Judge Martinez issued an order, directing petitioner to pay. Hence, this
petition for certiorari on grounds that the corporation is exercising governmental
functions and is therefore exempt from Commonwealth Act No. 444.
PVTA contended it is beyond the jurisdiction of respondent Court as it is exercising
governmental functions and that it is exempt from the operation of Commonwealth Act
No. 444.

Issue: ​Whether or not PVTA discharges governmental and not proprietary functions.

HELD: ​It is an inherent state function which makes government required to support its
people and promote their general welfare. This case explains and portrays the expanded
role of government necessitated by the increased responsibility to provide for the
general welfare. The Court held that the distinction and between constituent and
ministrant functions, which the Chief Justice points out, is already irrelevant
considering the needs of the present time. He says that "The growing complexities of
modern society have rendered this traditional classification of the functions of
government obsolete." The distinction between constituent and ministrant functions is
now considered obsolete. The Court affirms that the Petition as well as the subsequent
Motion for Reconsideration is DENIED.

SPOUSES FONTANILLA VS HON. MALIAMAN

FACTS​: National Irrigation Administration (NIA), a government agency, was held

liable for damages resulting to the death of the son of herein petitioner spouses caused
by the fault and/or negligence of the driver of the said agency. NIA maintains that it is
not liable for the act of its driver because the former does not perform primarily
proprietorship functions but governmental functions.

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

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

APCD vs PCA [G.R.NO. 110526] (Feb. 10, 1998)

FACTS​: APCD assailed that PCA acted beyond its power in promulgating a Board
Resolution no. 18-93 dated March 24, 1993 in which it declares that it will no longer
require those wishing to engage in coconut processing to apply to it for a license or
permit as a condition for engaging in such business. The contention of the APCD was
that the Board Resolution of the PCA was an undue exercise of legislative power by an
administrative body which led to the procedural due process requirement of
consultation provided in PD. NO. 1644, E.O. 826 PCA Admin. Order no.002 series 1991.
On the other hand, the PCA contended that they the action of the petitioner was an act
of forum shopping because they had a pending petition before the office of the President
and that they acted in adherence with the legislative power delegated to them.

ISSUE:
1. WON the said Board Resolution is NULL and VOID being unduly promulgated by
PCA.
2. WON the PCA must exercise the mere ministrant or optional function of the
government to provide protective regulations?

RULING:​:
1. Yes, the said board resolution is null and void. The PCA was created through PD 232
on June 30, 1973 “to promote the rapid integrated development and growth of the
coconut and other palm oil industry in all its aspects.” Because of that, the government
limited the opening of coconut processing plants which eventually also came to a point
to prohibit it. New plants can only be open through Executive Order No. 826 with
provided economic conditions; a) the existing market demand; b)the production
capacity prevailing in the country or locality; c) the level and flow of raw materials; and
d) other circumstances which may affect the growth or viability of the industry
concerned. Through this, we could see that the creation of PCA is to really regulate the
new coconut plants and to give some restrictions to it by implementing legislated rules
through the delegated legislative power to them. That it must promulgate such kind of
rules to protect the Philippine coconut industries from its substandard quality and
cut-throat competition.

2. No, it must not argue that just because it’s a ministrant or optional function of the
government to protect the welfare of the coconut industries could excuse them to
abandon the regulation of new coconut plant. Our Constitutions, beginning with the
1935 document, have repudiated laissez-faire as an economic principle.
[18] Although the present Constitution enshrines free enterprise as a policy,[19] it
nonetheless reserves to the government the power to intervene whenever necessary to
promote the general welfare. This is clear from the following provisions of Art. XII of the
Constitution which, so far as pertinent, state: Sec. 6. . . . Individuals and private groups,
including corporations, cooperatives, and similar collective organizations, shall have the
right to own, establish, and operate economic enterprises,subject to the duty of the State
to promote distributive justice and to intervene when the common good so demands.
Sec. 19. The State shall regulate or prohibit monopolies when the public interest so
requires. No combinations in restraint of trade or unfair competition
shall be allowed. (Emphasis added) At all events, any change in policy must be made by
the legislative department of the government. The regulatory system has been set up by
law. It is beyond the power of an administrative agency to dismantle it.

WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all
certificates of registration issued under it are hereby declared NULL and VOID for
having been issued in excess of the power of the Philippine Coconut Authority to adopt
or issue.
CABANAS vs PILAPIL

FACTS: ​The insured, Florentino Pilapil had a child, Millian Pilapil, with a married
woman, the plaintiff, Melchora Cabanas. She was ten years old at the time the complaint
was filed on October 10, 1964. The defendant, Francisco Pilapil, is the brother of the
deceased. The deceased insured himself and instituted as beneficiary, his child, with his
brother to act as trustee during her minority. Upon his death, the proceeds were paid to
him. Hence this complaint by the mother, with whom the child is living, seeking the
delivery of such sum. She filed the bond required by the Civil Code. Defendant would
justify his claim to the retention of the amount in question by invoking the terms of the
insurance policy.

Issue: ​WON the mother is the rightful trustee for the minor beneficiary

Held:​ on Articles 320 and 321 of the Civil Code. The former provides: "The father, or in
his absence the mother, is the legal administrator of the property pertaining to the child
under parental authority. The property which the unemancipated child has acquired or
may acquire with his work or industry, or by any lucrative title, belongs to the child in
ownership, and in usufruct to the father or mother under whom he is under parental
authority and whose company he lives.
With the added circumstance that the child stays with the mother, not the uncle, without
any evidence of lack of maternal care, the decision arrived at can stand the test of the
strictest scrutiny. It is further fortified by the assumption, both logical and natural, that
infidelity to the trust imposed by the deceased is much less in the case of a mother than
in the case of an uncle

PEOPLE VS CASIPIT - NONE

PCGG V SANDIGANBAYAN

FACTS:
In 1976 the General Bank and Trust Company (GENBANK) encountered financial
difficulties. The Central Bank issued a resolution declaring GENBANK insolvent and
unable to resume business with safety to its depositors, creditors and the general public,
and ordering its liquidation. A public bidding of GENBANK’s assets was held where
Lucio Tan group submitted the winning bid. Solicitor General Estelito Mendoza filed a
petition with the CFI praying for the assistance and supervision of the court in
GENBANK’s liquidation as mandated by RA 265. After EDSA Revolution I Pres Aquino
established the PCGG to recover the alleged ill-gotten wealth of former Pres Marcos, his
family and cronies. Pursuant to this mandate, the PCGG filed with the Sandiganbayan a
complaint for reversion, reconveyance, restitution against respondents Lucio Tan, at.al.
PCGG issued several writs of sequestration on properties allegedly acquired by them by
taking advantage of their close relationship and influence with former Pres. Marcos. The
abovementioned respondents Tan, et. al are represented as their counsel, former
Solicitor General Mendoza. PCGG filed motions to disqualify respondent Mendoza as
counsel for respondents Tan et. al. with Sandiganbayan. It was alleged that Mendoza as
then Sol Gen and counsel to Central Bank actively intervened in the liquidation of
GENBANK which was subsequently acquired by respondents Tan et. al., which
subsequently became Allied Banking Corporation. The motions to disqualify invoked
Rule 6.03 of the Code of Professional Responsibility which prohibits former government
lawyers from accepting “engagement” or employment in connection with any matter in
which he had intervened while in the said service. The Sandiganbayan issued a
resolution denying PCGG’s motion to disqualify respondent Mendoza. It failed to prove
the existence of an inconsistency between respondent Mendoza’s former function as
SolGen and his present employment as counsel of the Lucio Tan group.

ISSUE:
Whether Rule 6.03 of the Code of Professional Responsibility applies to respondent
Mendoza. The prohibition states: “A lawyer shall not, after leaving government service,
accept engagement or employment in connection with any matter in which he had
intervened while in the said service.”

HELD
The case at bar does not involve the “adverse interest” aspect of Rule 6.03. Respondent
Mendoza, it is conceded, has no adverse interest problem when he acted as SOlGen and
later as counsel of respondents et.al. before the Sandiganbayan. The Court held that the
advice given by respondent Mendoza on the procedure to liquidate GENBANK is not the
“matter” contemplated by Rule 6.03 of the Code of Professional
Responsibility.Respondent Mendoza had nothing to do with the decision of the Central
Bank to liquidate GENBANK. He also did not participate in the sale of GENBANK to
Allied Bank. The legality of the liquidation of GENBANK is not an issue in the
sequestration cases. Indeed, the jurisdiction of the PCGG does not include the
dissolution and liquidation of banks. Thus, the Code 6.03 of the Code of Professional
Responsibility cannot apply to respondent Mendoza because his alleged intervention
while SolGen is an intervention on a matter different from the matter involved in the
Civil case of sequestration.
Harvey v. Defensor-Santiago, GR 82544

Facts: ​This is a petition for Habeas Corpus. Petitioners are the following: American
nationals Andrew Harvey, 52 and John Sherman 72. Dutch Citizen Adriaan Van Den
Elshout, 58. All reside at Pagsanjan Laguna respondent Commissioner Miriam Defensor
Santiago issued Mission Orders to the Commission of Immigration and Deportation
(CID) to apprehend petitioners at their residences. The “Operation Report” read that
Andrew Harvey was found together with two young boys. Richard Sherman was found
with two naked boys inside his room. While Van Den Elshout in the “after Mission
Report” read that two children of ages 14 and 16 has been under his care and subjects
confirmed being live-in for sometime now.

Seized during the petitioner’s apprehension were rolls of photo negatives and photos of
suspected child prostitutes shown in scandalous poses as well as boys and girls engaged
in sex. Posters and other literature advertising the child prostitutes were also found.

Petitioners were among the 22 suspected alien pedophiles. They were apprehended 17
February1988 after close surveillance for 3 month of the CID in Pagsanjan, Laguna. 17
of the arrested aliens opted for self-deportation. One released for lack of evidence,
another charged not for pedophile but working with NO VISA, the 3 petitioners chose to
face deportation proceedings. On 4 March1988, deportation proceedings were instituted
against aliens for being undesirable aliens under Sec.69 of Revised Administrative Code.

Warrants of Arrest were issued 7March1988 against petitioners for violation of Sec37,
45 and 46 of Immigration Act and sec69 of Revised Administrative Code. Trial by the
Board of Special Inquiry III commenced the same date. Petition for bail was filed
11March 1988 but was not granted by the Commissioner of Immigration. 4 April1988
Petitioners filed a petition for Writ of Habeas Corpus. The court heard the case on oral
argument on 20 April 1988.

Issue:
Whether or Not the Commissioner has the power to arrest and detain petitioners
pending determination of the existence of probable cause.

Whether or Not there was unreasonable searches and seizures by CID agents.

Whether or Not the writ of Habeas Corpus may be granted to petitioners.

Held: While pedophilia is not a crime under the Revised Penal Code, it violates the
declared policy of the state to promote and protect the physical, moral, spiritual and
social well being of the youth. The arrest of petitioners was based on the probable cause
determined after close surveillance of 3 months. The existence of probable cause
justified the arrest and seizure of articles linked to the offense. The articles were seized
as an incident to a lawful arrest; therefore the articles are admissible evidence (Rule 126,
Section12 of Rules on Criminal Procedure).

The rule that search and seizures must be supported by a valid warrant of arrest is not
an absolute rule. There are at least three exceptions to this rule. 1.) Search is incidental
to the arrest. 2.) Search in a moving vehicle. 3.) Seizure of evidence in plain view. In
view of the foregoing, the search done was incidental to the arrest.

The filing of the petitioners for bail is considered as a waiver of any irregularity
attending their arrest and stops them from questioning its validity. Furthermore, the
deportation charges and the hearing presently conducted by the Board of Special
Inquiry made their detention legal. It is a fundamental rule that habeas corpus will not
be granted when confinement is or has become legal, although such confinement was
illegal at the beginning.

The deportation charges instituted by the Commissioner of Immigration are in

accordance with Sec37 (a) of the Philippine Immigration Act of 1940 in relation to sec69
of the Revised Administrative code. Section 37 (a) provides that aliens shall be arrested
and deported upon warrant of the Commissioner of Immigration and Deportation after
a determination by the Board of Commissioners of the existence of a ground for
deportation against them. Deportation proceedings are administrative in character and
never construed as a punishment but a preventive measure. Therefore, it need not be
conducted strictly in accordance with ordinary Court proceedings. What is essential is
that there should be a specific charge against the alien intended to be arrested and
deported. A fair hearing must also be conducted with the assistance of a counsel if
desired.

Lastly, the power to deport aliens is an act of the State and done under the authority of
the sovereign power. It a police measure against the undesirable aliens whose continued
presence in the country is found to be injurious to the public good and tranquility of the
people.
 SOVEREIGNTY

Ruffy, et al. vs. Chief of Staff, et al.

FACTS:
During the Japanese insurrection in the Philippines, military men were assigned at
designated camps or military bases all over the country. Japanese forces went to
Mindoro thus forcing petitioner and his band move up the mountains and organize a
guerilla outfit and call it the "Bolo area". A certain Capt. Beloncio relieved Ruffy and
fellow petitioners of their position and duties in the "Bolo area" by the new authority
vested upon him because of the recent change of command. Capt. Beloncio was thus
allegedly slain by Ruffy and his fellow petitioners.

ISSUE: ​Whether or not the petitioners were subject to military law at the time the
offense was committed, which was at the time of war and the Japanese occupancy.

HELD: The Court held that the petitioners were still subject to military law since
members of the Armed Forces were still covered by the National Defense Act, Articles of
War and other laws even during an occupation. The act of unbecoming of an officer and
a gentleman is considered as a defiance of 95th Article of War held petitioners liable to
military jurisdiction and trial. Moreover, they were operating officers, which makes
them even more eligible for the military court's jurisdiction.
In consideration of the foregoing, the petition has no merit and should be dismissed.
Thus, the petition is hereby DENIED.

LAUREL v. MISA

FACTS: ​Anastacio Laurel filed a petition for habeas corpus contending that he cannot
be prosecuted for the crime of treason defined and penalized by Article 114 of the
Revised Penal Code on the grounds that the sovereignty of the legitimate government
and the allegiance of Filipino citizens was then suspended, and that there was a change
of sovereignty over the Philippines upon the proclamation of the Philippine Republic.

ISSUE:
1. Is the absolute allegiance of the citizens suspended during Japanese occupation?
2. Is the petitioner subject to Article 114 of the Revised Penal Code?

HELD: ​The absolute and permanent allegiance of the inhabitants of a territory

occupied by the enemy of their legitimate government on the sovereign is not abrogated
or severed by the enemy occupation because the sovereignty of the government or
sovereign de jure is not transferred to the occupier. There is no such thing as suspended
allegiance. The petitioner is subject to the Revised Penal Code for the change of form of
government does not affect the prosecution of those charged with the crime of treason
because it is an offense to the same government and same sovereign people.

IMMUNITY OF STATE FROM SUIT

Republic vs. Villasor

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 the payment of pensions of retirees, pay and allowances of military and
civilian personnel and 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 to lack of jurisdiction in
granting the issuance of a Writ of Execution against the properties of the AFP, hence the
notices and garnishment are null and void.

Issues:
Whether or not the state can be sued without its consent.
Whether or not the notice of garnishment issued by Judge Villasor is valid.

HELD:
The provision of Sec 3 Article XVI declares that “the State may not be sued without its
consent”. This provision is merely a recognition of the sovereign character of the State
and express an affirmation of the unwritten rule insulating it from the jurisdiction of the
courts of justice. Another justification is the practical consideration that the demands
and inconveniences of litigation will divert time and resources of the State from the
more pressing matters demanding its attention, to the prejudice of the public welfare.
As a general rule, whether the money is deposited by way of general or special deposit,
they remain government funds and are not subject to garnishment. An exception of the
rule is a law or ordinance that has been enacted appropriating a specific amount to pay a
valid government obligation.

Department of Agriculture vs NLRC

Facts: ​Petitioner Department of Agriculture (DA) and Sultan Security Agency entered
into a contract for security services to be provided by the latter to the said governmental
entity. Pursuant to their arrangements, guards were deployed by Sultan Security Agency
in various premises of the DA. Thereafter, several guards filed a complaint for
underpayment of wages, nonpayment of 13th month pay, uniform allowances, night
shift differential pay, holiday pay, and overtime pay, as well as for damages against the
DA and the security agency.
The Labor Arbiter rendered a decision finding the DA jointly and severally liable with
the security agency for the payment of money claims of the complainant security guards.
The DA and the security agency did not appeal the decision. Thus, the decision became
final and executory. The Labor Arbiter issued a writ of execution to enforce and execute
the judgment against the property of the DA and the security agency. Thereafter, the
City Sheriff levied on execution the motor vehicles of the DA.

Issue:​ Whether or not the doctrine of non-suability of the State applies in the case

Discussions:
Act No. 3083, aforecited, gives the consent of the State to be “sued upon any moneyed
claim involving liability arising from contract, express or implied. However, the money
claim should first be brought to the Commission on Audit. Act 3083 stands as the
general law waiving the State’s immunity from suit, subject to its general limitation
expressed in Section 7 thereof that ‘no execution shall issue upon any judgment
rendered by any Court against the Government of the (Philippines), and that the
conditions provided in Commonwealth Act 327 for filing money claims against the
Government must be strictly observed.

Rulings:
No. The rule does not say that the State may not be sued under any circumstances. The
State may at times be sued. The general law waiving the immunity of the state from suit
is found in Act No. 3083, where the Philippine government “consents and submits to be
sued upon any money claims involving liability arising from contract, express or
implied, which could serve as a basis of civil action between private parties.”

In this case, The DA has not pretended to have assumed a capacity apart from its being a
governmental entity when it entered into the questioned contract; nor that it could have,
in fact, performed any act proprietary in character. But the claims of the complainant
security guards clearly constitute money claims.

Professional Video Inc. vs. TESDA

FACTS: In 1999, TESDA, an instrumentality of the government established under R.A.

No. 7796 (the TESDA Act of 1994) and attached to the DOLE to develop and establish a
national system of skills standardization, testing, and certification in the country.
To fulfill this mandate, it sought to issue security-printed certification and/or
identification polyvinyl (PVC) cards to trainees who have passed the certification
process.
Professional Video Inc. (PROVI) signed and executed the “Contract Agreement Project
PVC ID Card issuance” for the provision of goods and services in the printing and
encoding of the PVC cards. PROVI was to provide TESDA with the system and
equipment compliant with the specifications defined in the proposal. In return, TESDA
would pay PROVI a specified sum of money after TESDA’s acceptance of the contracted
goods and services. PPOVI alleged that TESDA has still an outstanding balance and still
remains unpaid.
TESDA claims that it entered the Contract Agreement and Addendum in the
performance of its governmental function to develop and establish a national system of
skills standardization, testing, and certification; in the performance of this
governmental function, TESDA is immune from suit.

ISSUE:​ Can TESDA be sued without its consent?

RULING: ​TESDA, as an agency of the State, cannot be sued without its consent. As
discussed above, TESDA performs governmental functions, and the issuance of
certifications is a task within its function of developing and establishing a system of
skills standardization, testing, and certification in the country. From the perspective of
this function, the core reason for the existence of state immunity applies i.e., the public
policy reason that the performance of governmental function cannot be hindered or
delayed by suits, nor can these suits control the use and disposition of the means for the
performance of governmental functions.
USA v. Ruiz

FACTS: ​Sometime in May 1972, the United States invited the submission of bids for
certain naval projects. Eligio de Guzman & Co. Inc. responded to the invitation and
submitted bids. Subsequently, the company received two telegrams requesting it to
confirm its price. In June 1972, the company received a letter which said that the
company did not qualify to receive an award for the projects. The company then sued
the United States of America and individual petitioners demanding that the company
perform the work on the projects, or for the petitioners to pay damages and to issue a
writ of preliminary injunction to restrain the petitioners from entering into contracts
with third parties concerning the project.
ISSUE:
1) Do the petitioners exercise governmental or proprietary functions?
2) Does the Court have jurisdiction over the case?

HELD:
The rule of State immunity exempts a State from being sued in the courts of another
state without its consent or waiver. This is a necessary consequence of the principles of
independence and equality of states. However, state immunity now extends only to
governmental acts of the state. The restrictive application of State immunity is proper
only when the proceedings arise out of commercial transactions of the foreign sovereign.
In this case, the projects are an integral part of the naval base which is devoted to the
defense of the USA and the Philippines which is, indisputably, a function of the
government. As such, by virtue of state immunity, the courts of the Philippines have no
jurisdiction over the case for the US government has not given consent to the filing of
this suit.

People of the Philippines v. Purisima

FACTS:
Twenty-six petitions for review were filed charging the respective Defendant with
“illegal possession of deadly weapon” in violation of Presidential Decree No. 9. An order
quashed the information because it did not allege facts which constitute the offense
penalized by P.D. No. 9. It failed to state one essential element of the crime, viz.: that the
carrying outside of the residence of the accused of a bladed, pointed, or blunt weapon is
in furtherance or on the occasion of, connected with or related to subversion,
insurrection, or rebellion, organized lawlessness or public disorder. Petitioners argued
that a perusal of P.D. No. 9 shows that the prohibited acts need not be related to
subversive activities and that they are essentially malum prohibitum penalized for
reasons of public policy.

ISSUE: ​W/N P.D. No. 9 shows that the prohibited acts need not be related to
subversive activities.

HELD:
The primary rule in the construction and interpretation of a legislative measure is to
search for and determine the intent and spirit of the law. Legislative intent is the
controlling factor. Because of the problem of determining what acts fall under P.D. 9, it
becomes necessary to inquire into the intent and spirit of the decree and this can be
found among others in the preamble or “whereas” clauses which enumerate the facts or
events which justify the promulgation of the decree and the stiff sanctions stated
therein.

Froilan vs Pan Oriental Shipping

FACTS: Plaintiff, Fernando Froilan filed a complaint against the defendant-appellant,

Pan Oriental Shipping Co., alleging that he purchased from the Shipping Commission
the vessel for P200,000, paying P50,000 down and agreeing to pay the balance in
instalments. To secure the payment of the balance of the purchase price, he executed a
chattel mortgage of said vessel in favor of the Shipping Commission. For various
reasons, among them the non-payment of the installments, the Shipping Commission
tool possession of said vessel and considered the contract of sale cancelled. The
Shipping Commission chartered and delivered said vessel to the defendant-appellant
Pan Oriental Shipping Co. subject to the approval of the President of the Philippines.
Plaintiff appealed the action of the Shipping Commission to the President of the
Philippines and, in its meeting the Cabinet restored him to all his rights under his
original contract with the Shipping Commission. Plaintiff had repeatedly demanded
from the Pan Oriental Shipping Co. the possession of the vessel in question but the latter
refused to do so. Plaintiff, prayed that, upon the approval of the bond accompanying his
complaint, a writ of replevin be issued for the seizure of said vessel with all its
equipment and appurtenances, and that after hearing, he be adjudged to have the
rightful possession thereof . The lower court issued the writ of replevin prayed for by
Froilan and by virtue thereof the Pan Oriental Shipping Co. was divested of its
possession of said vessel. Pan Oriental protested to this restoration of Plaintiff ‘s rights
under the contract of sale, for the reason that when the vessel was delivered to it, the
Shipping Administration had authority to dispose of said authority to the property,
Plaintiff having already relinquished whatever rights he may have thereon. Plaintiff paid
the required cash of P10,000.00 and as Pan Oriental refused to surrender possession of
the vessel, he filed an action to recover possession thereof and have him declared the
rightful owner of said property. The Republic of the Philippines was allowed to
intervene in said civil case praying for the possession of the in order that the chattel
mortgage constituted thereon may be foreclosed.

Issues: ​Whether or not the Court has jurisdiction over the intervenor with regard to the
counterclaim.

Discussions: ​When the government enters into a contract, for the State is then deem
to have divested itself of the mantle of sovereign immunity and descended to the level of
the ordinary individual. Having done so, it becomes subject to judicial action and
processes.

Rulings: ​Yes. The Supreme Court held that the government impliedly allowed itself to
be sued when it filed a complaint in intervention for the purpose of asserting claim for
affirmative relief against the plaintiff to the recovery of the vessel. The immunity of the
state from suits does not deprive it of the right to sue private parties in its own courts.
The state as plaintiff may avail itself of the different forms of actions open to private
litigants. In short, by taking the initiative in an action against a private party, the state
surrenders its privileged position and comes down to the level of the defendant. The
latter automatically acquires, within certain limits, the right to set up whatever claims
and other defenses he might have against the state.

Lim, etc. vs. Brownell, Jr., etc.,

FACTS: ​This is an appeal from an order of the Court of First Instance of Manila,
dismissing plaintiff's action for the recovery of real property for lack of jurisdiction over
the subject matter. The property in dispute consists of four parcels of land situated in
Tondo, City of Manila, with a total area of 29,151 square meters. The lands were, after
the last world war, found by the Alien Property Custodian of the United States to be
registered in the name of Asaichi Kagawa, national of an enemy country, Japan, as
evidenced by Transfer Certificates of Title Nos. 64904 to 65140,
On March 14, 1946, issued a vesting order on the authority of the Trading with
the Enemy Act of the United States, as amended, vesting in himself the ownership over
two of the said lots, Lots Nos. 1 and 2 On July, 6, 1948, the Philippine Alien Property
Administrator (successor of the Alien Property Custodian) under the authority of the
same statute issued a supplemental vesting order, vesting in himself title to the
remaining Lots Nos. 3 and 4. On August 3, 1948, the Philippine Alien Property
Administrator (acting on behalf of the President of the United States) and the President
of the Philippines, executed two formal agreements, one referring to Lots 1 and 2 and
the other to Lots 3 and 4, whereby the said Administrator transferred all the said four
lots to the Republic of the Philippines upon the latter's undertaking fully to indemnify
the United States for all claims in relation to the property transferred, which claims are
payable by the United States of America or the Philippine Alien Property Administrator
of the United States under the Trading with the Enemy Act, as amended, and for all such
costs and expenses of administration as may by law be charged against the property or
proceeds thereof hereby transferred. On November 15, 1948, the latter's son Benito E.
Lim filed a formal notice of claim to the property with the Philippine Alien Property
Administrator On the theory that the lots in question still belonged to Arsenia Enriquez.
that they were mortgaged by her to the Mercantile Bank of China; that the mortgage
having been foreclosed, the property was sold at public auction during the war to the
Japanese Asaichi Kagawa, who, by means of threat and intimidation succeeded in
preventing Arsenia Enriquez from exercising her right of redemption; and that Kagawa
never acquired any valid title to the property because he was ineligible under the
Constitution to acquire residential land in the Philippines by reason of alien age. On
March 7, 1950, the claim was disallowed by the Vested Property Claims Committee of
the Philippine Alien Property Administrator, and copy of the decision disallowing the
claim was received by claimant's counsel on the 15th of that month On November 13,
1950, the claimant Benito E. Lim, as administrator of the intestate estate of Arsenia
Enriquez, filed a complaint in the Court of First Instance of Manila against the
Philippine Alien Property Administrator (later substituted by the Attorney General of
the United States) for the recovery of the property in question with back rents. The
complaint was later amended to include Asaichi Kagawa as defendant.

ISSUE: ​1. Whether or not Intervenor-Appellee (Republic of the Philippines) be sued?

HELD: ​No suit or claim for the return of said properties pursuant to Section 9 or 32 (a)
of the Trading with the Enemy Act was filed by Plaintiff within two years from the
date of vesting, the “later” date and the last on which suit could be brought. A
condition precedent to a suit for the return of property vested under Trading with
the Enemy Act is that it should be filed not later than April 30, 1949, or within two
years from the date of vesting, whichever is later, but in computing the two years,
the period during which there was pending a suitor claim for the return of the
property of the Act shall be excluded. The court states that In view of the foregoing, the
order appealed from insofar as it dismisses the complaint with respect to Lots 1 and 2
and the claim for damages against the Attorney General of the United States and the
Republic of the Philippines, is affirmed, but revoked insofar as it dismisses the
complaint with respect to Lots 3 and 4, as to which the case is hereby remanded to the
court below for further proceedings.

Department of Agriculture vs. NLRC

Facts: ​Petitioner Department of Agriculture (DA) and Sultan Security Agency entered
into a contract for security services to be provided by the latter to the said governmental
entity. Pursuant to their arrangements, guards were deployed by Sultan Security Agency
in various premises of the DA. Thereafter, several guards filed a complaint for
underpayment of wages, nonpayment of 13th month pay, uniform allowances, night
shift differential pay, holiday pay, and overtime pay, as well as for damages against the
DA and the security agency. The Labor Arbiter rendered a decision finding the DA
jointly and severally liable with the security agency for the payment of money claims of
the complainant security guards. The DA and the security agency did not appeal the
decision. Thus, the decision became final and executory. The Labor Arbiter issued a writ
of execution to enforce and execute the judgment against the property of the DA and the
security agency. Thereafter, the City Sheriff levied on execution the motor vehicles of the
DA.

Issues: ​Whether or not the doctrine of non-suability of the State applies in the case.

Discussions: ​Act No. 3083, aforecited, gives the consent of the State to be “sued upon
any moneyed claim involving liability arising from contract, express or implied.
However, the money claim should first be brought to the Commission on Audit. Act
3083 stands as the general law waiving the State’s immunity from suit, subject to its
general limitation expressed in Section 7 thereof that ‘no execution shall issue upon any
judgment rendered by any Court against the Government of the (Philippines), and that
the conditions provided in Commonwealth Act 327 for filing money claims against the
Government must be strictly observed.

Rulings: ​No. The rule does not say that the State may not be sued under any
circumstances. The State may at times be sued. The general law waiving the immunity of
the state from suit is found in Act No. 3083, where the Philippine government “consents
and submits to be sued upon any money claims involving liability arising from contract,
express or implied, which could serve as a basis of civil action between private parties.”
In this case, The DA has not pretended to have assumed a capacity apart from its being a
governmental entity when it entered into the questioned contract; nor that it could have,
in fact, performed any act proprietary in character. But the claims of the complainant
security guards clearly constitute money claims.
USA v. Guinto

FACTS: ​The cases have been consolidated because they all involve the doctrine of state
immunity. In GR No. 76607, private respondents regarding suing several officers of the
US Air Force in connection with the bidding for barbering services in Clark Air Base. In
GR No. 80018, Luis Bautista was arrested following a buy-bust operation for a violation
of the Dangerous Drugs Act. Bautista then filed a complaint for damages claiming that
because of the acts of the respondents, he lost his job. In GR No. 79470, Fabian Genove
filed a complaint for damages against petitioner for his dismissal as a cook in the US Air
Force. In GR No. 80258, complaint for damages was filed by the respondents against
petitioners for injuries allegedly sustained by plaintiff. All cases invoke the doctrine of
state immunity as a ground to dismiss the same.

ISSUE: ​Are the petitioners immune from suit?

HELD: ​It is clear that the petitioners in GR No. 80018 were acting in the exercise of
their official functions. They cannot be directly impleaded for the US government has
not given its consent to be sued. In GR No. 79470, petitioners are not immune because
restaurants are commercial enterprises, however, the claim of damages by Genove
cannot be allowed on the strength of the evidence presented. Barber shops are also
commercial enterprises operated by private persons, thus, petitioners in GR No. 76607
cannot plead any immunity from the complaint filed. In GR No. 80258, the respondent
court will have to receive the evidence of the alleged irregularity in the grant of the
barbershop concessions before it can be known in what capacity the petitioners were
acting at the time of the incident.

Municipality of San Fernando vs. Firme

FACTS:
On December 16, 1965, a collision occurred involving a passenger jeepney driven by
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
Municipality of San Fernando, La Union 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 varying degrees of physical injuries.
The heirs of Baniña Sr. filed a complaint for damages against the Estate of Nieveras and
Balagot. However, the aforesaid defendants filed a Third Party Complaint against the
petitioner and the driver of a dump truck of petitioner. The case was transferred to
branch presided by Judge Firme. The heirs of Baniña Sr. amended the complaint
wherein the petitioner and its regular employee Bislig were impleaded as defendants.
Judge Firme in its decision rendered the Municipality of San Fernando and Bislig jointly
and severally liable to pay funeral expenses, lot expected earnings, moral damages and
attorney’s fees.
ISSUE: ​Whether or not petitioner was liable.

RULING: ​The petitioner cannot be held liable by virtue of the non-suability of the
State.
The general rule Is that the State may not be sued except when it gives consent to be
sued (Article XVI, Sec. 3 of the Constitution.) 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.
Consent is implied when the government enters into business contracts and also when
the State files a complaint. 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. However,
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.”
Municipal corporations are sueable 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 Here, 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, the SC held that the driver of the dump truck was performing duties or tasks
pertaining to his office. Municipality cannot be held liable for the torts committed by its
regular employee, who was then engaged in the discharge of governmental functions.

U.P. v. Dizon, G.R.No. 18112, August 23, 2012

FACTS: ​On August 30, 1990, UP entered into an agreement with Stern builders Corp
for the construction of extension building in UPLB. Stern Builders submitted 3 billings
but UP only paid for 2, the 3rd was not paid due to disallowance of COA. When the
disallowance was lifted, UP still failed to pay. So Stern Builders sued them. UP failed to
file an appeal during the 15-day period. When they appealed on June 3, 2022 arguing
that they only received the copy on may 31, 2002, RTC denied it and issued a writ of
execution on October 4, 2002. UP files with CA for certiorari but was likewise denied.
On December 21, 2004, RTC judge Dizon orders the release of the garnished funds from
UP. On January 10, 2005, UP files for certiorari the decision of CA. Petition was granted
and TRO filed. After the 60-day period of TRO, RTC directs sheriff to receive the check
from DBP. On July 8, 2005, Dizon ordered the non-withdrawal of check because the
certiorari is pending. On September 16, 2005, UP files for certiorari which was denied
on December 2005 but UP files for petition for review. On January 3, 2007, RTC judge
Yadao replaced Dizon, ordered the withdrawal. On January 22, 2007, UP filed TRO with
SC which was granted. UP files petition for review for RTC’s decision to withdraw funds.

ISSUE:​W/N the fresh-period rule in Neypes v CA can be given retroactive application

HELD: Yes. The retroactive effect of a procedural law does not come within the legal
conception of retroactivity or is not subject to the general rule prohibiting retroactive
operation of statutes. Rather, its retroactivity is already given since by the nature of
rules of procedure, no vested right is impinged in its application.

JUSMAG Philippines vs. NLRC

FACTS: ​Joint United States Military Assistance Group (JUSMAG) assails the January
29, 1993 Resolution of the NATIONAL LABOR RELATIONS COMMISSION (public
respondent), in NLRC NCR CASE NO. 00-03-02092-92, reversing the July 30, 1991
Order of the Labor Arbiter, and ordering the latter to assume jurisdiction over the
complaint for illegal dismissal filed by FLORENCIO SACRAMENTO (private
respondent) against petitioner. Private respondent was one of the seventy-four (74)
security assistance support personnel (SASP) working at JUSMAG-Philippines. He had
been with JUSMAG from December 18, 1969, until his dismissal on April 27, 1992.
When dismissed, he held the position of Illustrator 2 and was the incumbent President
of JUSMAG PHILIPPINESFILIPINO CIVILIAN EMPLOYEES ASSOCIATION
(JPFCEA), a labor organization duly registered with the Department of Labor and
Employment. His services were terminated allegedly due to the abolition of his position.
He was also advised that he was under administrative leave until April 27, 1992,
although the same was not charged against his leave. On March 31, 1992, private
respondent filed a complaint with the Department of Labor and Employment on the
ground that he was illegally suspended and dismissed from service by JUSMAG. He
asked for his reinstatement. JUSMAG then filed a Motion to Dismiss invoking its
immunity from suit as an agency of the United States. It further alleged lack of
employer-employee relationship and that it has no juridical personality to sue and be
sued.

ISSUE: ​Whether JUSMAG was immune from suit as an agency of the United States.

HELD: ​YES, from the foregoing, it is apparent that when JUSMAG took the services of
private respondent, it was performing a governmental function on behalf of the United
States pursuant to the Military Assistance Agreement dated March 21, 1947. Hence, we
agree with petitioner that the suit is, in effect, one against the United States
Government, albeit it was not impleaded in the complaint. Considering that the United
States has not waived or consented to the suit, the complaint against JUSMAG cannot
prosper.

In this jurisdiction, we recognize and adopt the generally accepted principles of

international law as part of the law of the land. Immunity of State from suit is one of
these universally recognized principles. In international law, “immunity” is commonly
understood as the exemption of the state and its organs from the judicial jurisdiction of
another state. This is anchored on the principle of the sovereign equality of states under
which one state cannot assert jurisdiction over another in violation of the maxim par in
parem non habet imperium (an equal has no power over an equal).

The doctrine of state immunity from suit has undergone further metamorphosis. The
view evolved that the existence of a contract does not, per se, mean that sovereign States
may, at all times, be sued in local courts. The complexity of relationships between
sovereign states, brought about by their increasing commercial activities, mothered a
more restrictive application of the doctrine.

The Holy See vs. Rosario

FACTS:​This petition arose from a controversy over a parcel of land consisting of 6,000
square meters located in the Municipality of Paranaque. Said lot was contiguous with
two other lots. These lots were sold to Ramon Licup. In view of the refusal of the
squatters to vacate the lots sold, a dispute arose as to who of the parties has the
responsibility of evicting and clearing the land of squatters. Complicating the relations
of the parties was the sale by petitioner of the lot of concern to Tropicana.

ISSUE: ​Whether the Holy See is immune from suit insofar as its business relations
regarding selling a lot to a private entity
RULING: ​As expressed in Section 2 of Article II of the 1987 Constitution, we have
adopted the generally accepted principles of International Law. Even without this
affirmation, such principles of International Law are deemed incorporated as part of the
law of the land as a condition and consequence of our admission in the society of
nations. In the present case, if petitioner has bought and sold lands in the ordinary
course of real estate business, surely the said transaction can be categorized as an act
jure gestionis. However, petitioner has denied that the acquisition and subsequent
disposal of the lot were made for profit but claimed that it acquired said property for the
site of its mission or the Apostolic Nunciature in the Philippines.

The Holy See is immune from suit for the act of selling the lot of concern is
non-proprietary in nature. The lot was acquired by petitioner as a donation from the
Archdiocese of Manila. The donation was made not for commercial purpose, but for the
use of petitioner to construct thereon the official place of residence of the Papal Nuncio.
The decision to transfer the property and the subsequent disposal thereof are likewise
clothed with a governmental character. Petitioner did not sell the lot for profit or gain. It
merely wanted to dispose of the same because the squatters living thereon made it
almost impossible for petitioner to use it for the purpose of the donation.

Arigo et.al v Swift

FACTS: ​While transiting the Sulu Sea, the USS Guardian, a US Navy ship, ran aground
on the South Shoal of Tubbataha Reefs, a restricted and marine protected area. The US
Government provided compensation for the damage caused and undertook salvage
operations to remove the grounded ship from the coral reef.

Petition: issuance of a Writ of Kalikasan with prayer for the issuance of a Temporary
Environmental Protection Order (TEPO) under Rule 7 of A.M. No. 09-6-8-SC, otherwise
known as the Rules of Procedure for Environmental Cases (Rules), involving violations
of environmental laws and regulations in relation to the grounding of the US military
ship USS Guardian over the Tubbataha Reefs

ISSUES:
Whether or not the Court has jurisdiction over the US respondents who did not submit
any pleading or manifestation in the case.

Whether or not there is a waiver of immunity from suit in the Visiting Forces Agreement
(VFA) that would make the US respondents liable.
RULING:
1. Immunity of foreign states from the jurisdiction of local courts. The inhibition to
implead a foreign state in a local jurisdiction is expressed in the maxim ​par in
parem non habet imperium. T ​ hat is, all states are sovereign equals and cannot
assert jurisdiction over one another. This 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. The alleged act or omission resulting in the unfortunate
grounding of the USS Guardian on the TRNP was committed while the US
respondents were performing official military duties and working as
commanding officers of the US Navy who had control and supervision over the
USS Guardian and its crew. The suit is deemed to be one against the US itself as
the satisfaction of a judgment against said officials will require remedial actions
and appropriation of funds by the US government. Therefore, the principle of
State immunity bars the exercise of jurisdiction by this Court over the persons of
respondents Swift, Rice and Robling.

2. The waiver of state immunity under the VFA pertains only to criminal
jurisdiction and not to special civil actions such as the present petition for
issuance of a writ of Kalikasan. A ruling on the application or non-application of
criminal jurisdiction provisions of the VFA to US personnel who may be found
responsible for the grounding of the USS Guardian, would be premature and
beyond the province of a petition for a writ of Kalikasan. The VFA is an
agreement which defines the treatment of United States troops and personnel
visiting the Philippines to promote “common security interests” between the US
and the Philippines in the region. It provides for the guidelines to govern such
visits of military personnel, and further defines the rights of the United States
and the Philippine government in the matter of criminal jurisdiction, movement
of vessels and aircraft, importation and exportation of equipment, materials and
supplies. The invocation of US federal tort laws and even common law is thus
improper considering that it is the VF A which governs disputes involving US
military ships and crew navigating Philippine waters in pursuance of the
objectives of the agreement.
KHOSROW MINUCHER vs. HON. COURT OF APPEALS and ARTHUR
SCALZO

FACTS: ​Violation of the “Dangerous Drugs Act of 1972,” was filed against Minucher
following a “buy-bust operation” conducted by Philippine police narcotic agents
accompanied by Scalzo in the house of Minucher, an Iranian national, where heroin was
said to have been seized. Minucher was later acquitted by the court. Minucher later on
filed for damages due to trumped-up charges of drug trafficking made by Arthur Scalzo.
Scalzo on his counterclaims that he had acted in the discharge of his official duties as
being merely an agent of the Drug Enforcement Administration of the United States
Department of Justice. Scalzo subsequently filed a motion to dismiss the complaint on
the ground that, being a special agent of the United States Drug Enforcement
Administration, he was entitled to diplomatic immunity. He attached to his motion
Diplomatic Note of the United States Embassy addressed to DOJ of the Philippines and
a Certification of Vice Consul Donna Woodward, certifying that the note is a true and
faithful copy of its original. Trial court denied the motion to dismiss.

ISSUE: ​Whether or not Arthur Scalzo is indeed entitled to diplomatic immunity.

RULING: ​YES. A foreign agent, operating within a territory, can be cloaked with
immunity from suit as long as it can be established that he is acting within the directives
of the sending state.
The consent or imprimatur of the Philippine government to the activities of the United
States Drug Enforcement Agency, however, can be gleaned from the undisputed facts in
the case.

● The official exchanges of communication between agencies of the government of

the two countries
● Certifications from officials of both the Philippine Department of Foreign Affairs
and the United States Embassy
● Participation of members of the Philippine Narcotics Command in the “buy-bust
operation” conducted at the residence of Minucher at the behest of Scalzo

These may be inadequate to support the “diplomatic status” of the latter but they give
enough indication that the Philippine government has given its imprimatur, if not
consent, to the activities within Philippine territory of agent Scalzo of the United States
Drug Enforcement Agency. The job description of Scalzo has tasked him to conduct
surveillance on suspected drug suppliers and, after having ascertained the target, to
inform local law enforcers who would then be expected to make the arrest. In
conducting surveillance activities on Minucher, later acting as the poseur-buyer during
the buy-bust operation, and then becoming a principal witness in the criminal case
against Minucher, Scalzo hardly can be said to have acted beyond the scope of his
official function or duties.

China National Machinery v. Santamaria

FACTS:
On 14 September 2002, petitioner China National Machinery & Equipment
Corp. (CNMEG), represented by its chairperson, Ren Hongbin, entered into a
Memorandum of Understanding with the North Luzon Railways Corporation for the
conduct of a feasibility study on a possible railway line from Manila to San Fernando,
La Union.

On 30 August 2003, the Export Import Bank of China (EXIM Bank) and the
Department of Finance of the Philippines (DOF) entered into a Memorandum of
Understanding, wherein China agreed to extend Preferential Buyer’s Credit to the
Philippine government to finance the Northrail Project. The Chinese government
designated EXIM Bank as the lender, while the Philippine government named the
DOF as the borrower. Under the Aug 30 MOU, EXIM Bank agreed to extend an
amount not exceeding USD 400,000,000 in favor of the DOF, payable in 20 years,
with a 5-year grace period, and at the rate of 3% per annum.

On 1 October 2003, the Chinese Ambassador to the Philippines, Wang

Chungui, wrote a letter to DOF Secretary Jose Isidro Camacho informing him of
CNMEG’s designation as the Prime Contractor for the Northrail Project. On 30
December 2003, Northrail and CNMEG executed a Contract Agreement for the
construction of Section I, Phase I of the North Luzon Railway System from Caloocan
to Malolos on a turnkey basis (the Contract Agreement). The contract price for the
Northrail Project was pegged at USD 421,050,000.

On 26 February 2004, the Philippine government and EXIM Bank entered into
a counterpart financial agreement, the Buyer Credit Loan Agreement. In the Loan
Agreement, EXIM Bank agreed to extend Preferential Buyer’s Credit in the amount
of USD 400,000,000 in favor of the Philippine government in order to finance the
construction of Phase I of the Northrail Project.
ISSUE: ​Whether the Contract Agreement is an executive agreement.

RULING:
Under the Vienna Convention on the Law of Treaties defines a treaty as, “An
international agreement concluded between States in written form and governed by
international law, whether embodied in a single instrument or in two or more
related instruments and whatever its particular designation.” The Court held that an
executive agreement is similar to a treaty, except that the former (a) does not
require legislative concurrence; (b) is usually less formal; and (c) deals with a
narrower range of subject matters.

Despite these differences, to be considered an executive agreement, the

following three requisites provided under the Vienna Convention must nevertheless
concur: (a) the agreement must be between states; (b) it must be written; and (c) it
must governed by international law. The first and the third requisites do not obtain
in the case at bar.

The Contract Agreement was not concluded between the Philippines and
China, but between Northrail and CNMEG. By the terms of the Contract Agreement,
Northrail is a government-owned or -controlled corporation, while CNMEG is a
corporation duly organized and created under the laws of the People’s Republic of
China. Thus, both Northrail and CNMEG entered into the Contract Agreement as
entities with personalities distinct and separate from the Philippine and Chinese
governments, respectively.

Neither can it be said that CNMEG acted as an agent of the Chinese government.
As previously discussed, the fact that Amb. Wang, in his letter dated 1 October
2003, described CNMEG as a "state corporation" and declared its designation as the
Primary Contractor in the Northrail Project did not mean it was to perform sovereign
functions on behalf of China. That label was only descriptive of its nature as a state
owned corporation, and did not preclude it from engaging in purely commercial or
proprietary ventures.

It is therefore clear from the foregoing reasons that the Contract Agreement
does not partake of the nature of an executive agreement. It is merely an ordinary
commercial contract that can be questioned before the local courts.
Lasco Vs UNITED NATIONS REVOLVING FUND FOR NATURAL
RESOURCES EXPLORATION (UNRFNRE)

FACTS: ​Petitioners were dismissed from their employment with private respondent,
the United Nations Revolving Fund for NaturalResourcesExploration (UNRFNRE),
which is a special fund and subsidiary organ of theUnited Nations.The UNRFNRE is
involved in a joint project of thePhilippineGovernment and the United Nations for
exploration work in Dinagat Island.Petitioners are the complainants for illegal dismissal
and damages.Private respondent alleged that respondent Labor Arbiter had no
jurisdiction over its personality since it enjoyed diplomatic immunity.

ISSUE:​ WON specialized agencies enjoy diplomatic immunity

HELD: Petition is dismissed. This is not to say that petitioner has no recourse.Section
31 of the Convention on the Privileges and Immunities of the SpecializedAgencies of the
United Nations states that ³each specialized agency shall make provision for appropriate
modes of settlement of (a) disputes arising out of contracts or other disputes of private
character to which the specialized agency is a party.´ Private respondent is not engaged
in a commercial venture in thePhilippines.Its presence is by virtue of a joint project
entered into by thePhilippine Government and theUnited Nations for mineral
exploration in DinagatIsland

SEAFDEC – AQD v. NLRC

FACTS: Southeast Asian Fisheries Development Center-Aquaculture Department

(SEAFDEC-AQD) is a department of an international organization, the Southeast Asian
Fisheries Development Center, organized through an agreement entered into in
Bangkok, Thailand. Juvenal Lazaga was employed as a Research Associate. 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. SEAFDEC-AQD's failure to pay Lazaga his
separation pay forced him to file a case with the NLRC. The LA and NLRC ruled in favor
of Lazaga. SEAFDEC-AQD claimed that the NLRC has no jurisdiction over the case.

ISSUE:​ W/N NLRC has jurisdiction over the case? NO

HELD: Petition Granted. Southeast Asian Fisheries Development Center-Aquaculture

Department (SEAFDEC-AQD) is an international agency beyond the jurisdiction of
public respondent NLRC. Being an intergovernmental organization, SEAFDEC
including its Departments (AQD), enjoys functional independence and freedom from
control of the state in whose territory its office is located.

Callado vs IRRI

Facts: ​Ernesto Callado was employed as a driver at the IRRI who figured in an accident
on an official trip to NAIA and back to the IRRI. Petitioner was terminated after a
preliminary investigation was held and after he was charged with (1) driving while on
official duty under the influence of liquor; (2) Serious misconduct for failure to report to
his supervisor that there is something wrong with his vehicle; (3) Gross and habitual
neglect of duties.

Petitioner filed a complaint with the Labor Arbiter for illegal dismissal, illegal
suspension and indemnity pay with moral and exemplary damages and attorney’s fees.
IRRI wrote to Labor Arbiter to inform that the Institute enjoys immunity from legal
process by virtue of Article 3 of P.D. No. 1620. While admitting IRRI’s defense of
immunity, the Labor Arbiter, nonetheless, cited an Order issued by the Institute on Aug.
13, 1991 to the effect that “in all cases of termination, respondent IRRI waives its
immunity,” and accordingly, considered the defense of immunity no longer a legal
obstacle in resolving the case. NLRC found merit in private respondent’s appeal and,
finding that IRRI did not waive its immunity, ordered the aforesaid decision of the
Labor Arbiter set aside and the complaint dismissed. Hence, this petition.

Petitioner contended that the immunity of the IRRI as an international organization by

Article 3 of P.D. No. 1620 may not be invoked in the 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: ​Can IRRI invoke immunity from suit?

Held: ​IRRI’s immunity from suit is undisputed. Art. 3 of P.D. 1620 provides:
“Immunity from Legal Process. The institute shall enjoy immunity from any penal, civil
and administrative proceedings, except insofar as that immunity has been expressly
waived by the DirectorGenera of the Institute or his authorized representatives.

The grant of immunity to IRRI is clear and an express waiver by its Director-General is
the only way by which it may relinquish or abandon this immunity. IRRI also made
guidelines when a dismissed employee files a complaint against the Institute contesting
the legality of dismissal -- “If the plaintiff’s attorney or the arbiter, asks if IRRI will
waive its immunity we may reply that the Institute will be happy to do so, as it has in the
past in the formal manner required thereby reaffirming our commitment to abide by the
laws of the Philippines and our full faith in the integrity and impartially of the legal
system.”

From the last paragraph of the foregoing quotation, it is clear that in cases involving
dismissed employees, the Institute may waive its immunity, signifying that such waiver
is discretionary on its part. Petitioner’s allegation that he was denied due process is
unfounded and has no basis. He was given proper notice and adequate opportunity to
refute the charges and findings, hereby fulfilling the basic requirements of due process.
The petition for certiorari is DISMISSED.

World Health Organization v. Aquino

Facts:

Herein petitioner, on behalf of Dr. Verstuyft, was allegedly suspected by the

Constabulary Offshore Action Center (COSAC) officers of carrying dutiable goods under
the Customs and Tariff Code of the Philippines. Respondent Judge then issued a search
warrant at the instance of the COSAC officers for the search and seizure of the personal
effects of Dr. Verstuyft notwithstanding his being entitled to diplomatic immunity, as
duly recognized by the Executive branch of the government.

The Secretary of Foreign Affairs Carlos P. Romulo advised the respondent judge that Dr.
Verstuyft is entitled to immunity from search in respect for his personal baggage as
accorded to members of diplomatic missions pursuant to the Host Agreement and
further requested for the suspension of the search warrant. The Solicitor General
accordingly joined the petitioner for the quashal of the search warrant but respondent
judge nevertheless summarily denied the quashal.

Issue: ​Whether or not personal effect of WHO Officer Dr. Verstuyft can be exempted
from search and seizure under the diplomatic immunity.

Ruling:
The executive branch of the Phils has expressly recognized that Verstuyft is entitled to
diplomatic immunity, pursuant to the provisions of the Host Agreement. The DFA
formally advised respondent judge of the Philippine Government's official position. The
Solicitor General, as principal law officer of the government, likewise expressly affirmed
said petitioner's right to diplomatic immunity and asked for the quashal of the search
warrant.

It recognized principle of international law and under our system of separation of

powers that diplomatic immunity is essentially a political question and courts should
refuse to look beyond a determination by the executive branch of government, and
where the plea of diplomatic immunity is recognized by the executive branch of the
government as in the case at bar, it is then the duty of the courts to accept the claim of
immunity upon appropriate suggestion by the principal law officer of the government,
the Solicitor General in this case, or other officer acting under his discretion. Courts may
not exercise their jurisdiction by seizure and detention of property, as to embarrass the
executive arm of the government in conducting foreign relations.