ARCEGA vs.

COURT OF APPEALS

ALICIA O. ARCEGA, assisted by her husband RAF. L. ARCEGA, doing business

under the firm name of “FAIRMONT ICE CREAM CO.,” petitioner,

Vs. THE COURT OF APPEALS, THE CENTRAL BANK OF THE PHILIPPINES, and
THE PHILIPPINE NATIONAL BANK, respondents.

Facts:

The petitioner Alicia O. Arcega, doing business under the firm name “Fairmont Ice
Cream Company,” filed a complaint with the Court of First Instance of Manila, Branch
I, against the respondents Central Bank of the Philippines and Philippine National
Bank, for the refund from allegedly unauthorized payments made by her in the
concept of the 17% special excise tax on foreign exchange. The refund prayed for
involves purchases of foreign exchange from the Philippine National Bank to cover
the costs and transportation and other charges incident to the importation into the
Philippines. The Central Bank moved to dismiss the complaint on the grounds, among
others, that the trial court has no jurisdiction over the subject-matter of the action,
because the judgment sought will constitute a financial charge against the
Government, and therefore the suit is one against the Government, which cannot
prosper without its consent, and in this case no such consent has been given.

The petitioner Arcega filed a motion for reconsideration of the resolution to which an
opposition was filed by the Central Bank. Then, the Central Bank’s Chief Accountant
submitted a certification that the balance of the collected special excise tax on sales
of foreign exchange was turned over to the Treasurer of the Philippines. The court
denied the petitioner’s motion for reconsideration. As a result, Arcega appealed to the
Court of Appeals.

Holding that the suit is indirectly against the Republic of the Philippines, which cannot
be sued without its consent, the Court of Appeals affirmed the dismissal of the
complaint.

The petitioner interposed the present appeal by certiorari.

Issue:

Whether a suit against the Central Bank a suit against the State.

Held:

The suit is brought against the Central Bank of the Philippines, an entity authorized
by its charter to sue and be sued. The consent of the State to thus be sued, therefore,
has been given.
Notes:

Suability of Central Bank in civil cases only

- The Central Bank is a government corporation created principally to administer the

monetary and banking system of the Republic. It is not a prosecution agency like the
fiscal’s office. The Central Bank is limited to its statutory powers. Its power to sue and
be sued refers to civil cases only.
Santiago vs. Republic

Ildefonso Santiago, represented by his Attorney-in-Fact, Alfredo T. Santiago,

petitioner, vs. The Government of the Republic of the Philippines, represented by
Director, Bureau of Plant Industry, and the Regional Director, Region IX, Zamboanga
City, repondent.

December 19, 1978

Fernando, J:

Facts:

Petitioner Ildefonso Santiago donated a parcel of land to the Bureau of Plant Industry
on the terms that the Bureau should construct a building and install lighting facilities
on the said lot.

When time passed and there were still no improvements on the lot, Santiago filed a
case pleading for the revocation of such contract of donation but the trial court
dismissed the petition claiming that it is a suit against the government and should not
prosper without the consent of the government.

Issue:

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

Held:

Yes

Rulings:

The government's waiver of immunity was implied by virtue of the terms provided in
the deed of donation. The government is a beneficiary of the terms of the donation
but it did not comply with such terms. Thus, the donor Santiago has the right to be
heard in the court. Also, to not allow the donor to be heard would be unethical and
contrary to equity which the government so advances. The Court of First Instance is
hereby directed to proceed with the case.