[G.R. No. L-46930. June 10, 1988.

DALE SANDERS, and A.S. MOREAU, JR., petitioners, vs. HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First Instance of Zambales,
Olongapo City, ANTHONY M. ROSSI and RALPH L. WYERS, respondents.

DECISION

CRUZ, J p:

The basic issue to be resolved in this case is whether or not the petitioners were performing their official duties when they did the acts for which they have been
sued for damages by the private respondents. Once this question is decided, the other answers will fall into place and this petition need not detain us any longer than it
already has.
Petitioner Sanders was, at the time the incident in question occurred, the special services director of the U.S. Naval Station (NAVSTA) in Olongapo City. 1 Petitioner
Moreau was the commanding officer of the Subic Naval Base, which includes the said station. 2 Private respondent Rossi is an American citizen with permanent residence in
the Philippines, 3 as so was private respondent Wyer, who died two years ago. 4 They were both employed as gameroom attendants in the special services department of the
NAVSTA, the former having been hired in 1971 and the latter in 1969. 5
On October 3, 1975, the private respondents were advised that their employment had been converted from permanent full-time to permanent part-time, effective
October 18, 1975. 6 Their reaction was to protest this conversion and to institute grievance proceedings conformably to the pertinent rules and regulations of the U.S.
Department of Defense. The result was a recommendation from the hearing officer who conducted the proceedings for the reinstatement of the private respondents to
permanent full-time status plus backwages. The report on the hearing contained the observation that "Special Services management practices an autocratic form of
supervision." 7
In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the complaint), Sanders disagreed with the hearing officer's report and asked for the rejection
of the abovestated recommendation. The letter contained the statements that: a) "Mr. Rossi tends to alienate most co-workers and supervisors;" b) "Messrs. Rossi and Wyers
have proven, according to their immediate supervisors, to be difficult employees to supervise;" and c) "even though the grievants were under oath not to discuss the case with
anyone, (they) placed the records in public places where others not involved in the case could hear."
On November 7, 1975, before the start of the grievance hearings, a letter (Annex "B" of the complaint) purportedly coming from petitioner Moreau as the commanding
general of the U.S. Naval Station in Subic Bay was sent to the Chief of Naval Personnel explaining the change of the private respondent's employment status and requesting
concurrence therewith. The letter did not carry his signature but was signed by W.B. Moore, Jr. "by direction," presumably of Moreau.
On the basis of these antecedent facts, the private respondent filed in the Court of First Instance of Olongapo City a complaint for damages against the herein
petitioners on November 8, 1976. 8 The plaintiffs claimed that the letters contained libelous imputations that had exposed them to ridicule and caused them mental anguish
and that the prejudgment of the grievance proceedings was an invasion of their personal and proprietary rights.
The private respondents made it clear that the petitioners were being sued in their private or personal capacity. However, in a motion to dismiss filed under a special
appearance, the petitioners argued that the acts complained of were performed by them in the discharge of their official duties and that, consequently, the court had no
jurisdiction over them under the doctrine of state immunity.
After extensive written arguments between the parties, the motion was denied in an order dated March 8, 1977, 9 on the main ground that the petitioners had not
presented any evidence that their acts were official in nature and not personal torts, moreover, the allegation in the complaint was that the defendants had acted maliciously
and in bad faith. The same order issued a writ of preliminary attachment, conditioned upon the filing of a P10,000.00 bond by the plaintiffs, against the properties of petitioner
Moreau, who allegedly was then about to leave the Philippines. Subsequently, to make matters worse for the defendants, petitioner Moreau was declared in default by the
trial court in its order dated August 9, 1977. The motion to lift the default order on the ground that Moreau's failure to appear at the pre-trial conference was the result of
some misunderstanding, and the motion for reconsideration of the denial of the motion to dismiss, which was filed by the petitioner's new lawyers, were denied by the
respondent court on September 7, 1977.
 This petition for certiorari, prohibition and preliminary injunction was thereafter filed before this Court, on the contention that the above-narrated acts of the
respondent court are tainted with grave abuse of discretion amounting to lack of jurisdiction.
We return now to the basic question of whether the petitioners were acting officially or only in their private capacities when they did the acts for which the private
respondents have sued them for damages.
It is stressed at the outset that the mere allegation that a government functionary is being sued in his personal capacity will not automatically remove him from the
protection of the law of public officers and, if appropriate, the doctrine of state immunity. By the same token, the mere invocation of official character will not suffice to
insulate him from suability and liability for an act imputed to him as a personal tort committed without or in excess of his authority. These well-settled principles are
applicable not only to the officers of the local state but also where the person sued in its courts pertains to the government of a foreign state, as in the present case.
The respondent judge, apparently finding that the complained acts were prima facie personal and tortious, decided to proceed to trial to determine inter alia their
precise character on the strength of the evidence to be submitted by the parties. The petitioners have objected, arguing that no such evidence was needed to substantiate
their claim of jurisdictional immunity. Pending resolution of this question, we issued a temporary restraining order on September 26, 1977, that has since then suspended the
proceedings in this case in the court a quo. LLjur
In past cases, this Court has held that where the character of the act complained of can be determined from the pleadings exchanged between the parties before
the trial, it is not necessary for the court to require them to belabor the point at a trial still to be conducted. Such a proceeding would be superfluous, not to say unfair to
the defendant who is subjected to unnecessary and avoidable inconvenience.
Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint against the commanding general of the Olongapo Naval Base should not have been denied
because it had been sufficiently shown that the act for which he was being sued was done in his official capacity on behalf of the American government. The United States
had not given its consent to be sued. It was the reverse situation in Syquia v. Almeda Lopez, 11 where we sustained the order of the lower court granting a motion to dismiss
a complaint against certain officers of the U.S. armed forces also shown to be acting officially in the name of the American government. The United States had also not waived
its immunity from suit. Only three years ago, in United States of America v. Ruiz, 12 we set aside the denial by the lower court of a motion to dismiss a complaint for damages
filed against the United States and several of its officials, it appearing that the act complained of was governmental rather than proprietary, and certainly not personal. In
these and several other cases, 13the Court found it redundant to prolong the proceedings after it had become clear that the suit could not prosper because the acts complained
of were covered by the doctrine of state immunity.
It is abundantly clear in the present case that the acts for which the petitioners are being called to account were performed by them in the discharge of their official
duties. Sanders, as director of the special services department of NAVSTA, undoubtedly had supervision over its personnel, including the private respondents, and had a hand
in their employment, work assignments, discipline, dismissal and other related matters. It is not disputed that the letter he had written was in fact a reply to a request from
his superior, the other petitioner, for more information regarding the case of the private respondents. 14 Moreover, even in the absence of such request, he still was within
his rights in reacting to the hearing officer's criticism — in effect a direct attack against him — that Special Services was practicing "an autocratic form of supervision."
As for Moreau, what he is claimed to have done was write the Chief of Naval Personnel for concurrence with the conversion of the private respondents' type of
employment even before the grievance proceedings had even commenced. Disregarding for the nonce the question of its timeliness, this act is clearly official in nature,
performed by Moreau as the immediate superior of Sanders and directly answerable to Naval Personnel in matters involving the special services department of NAVSTA. In
fact, the letter dealt with the financial and budgetary problems of the department and contained recommendations for their solution, including the re-designation of the
private respondents. There was nothing personal or private about it.
Given the official character of the above-described letters, we have to conclude that the petitioners were, legally speaking, being sued as officers of the United
States government. As they have acted on behalf of that government, and within the scope of their authority, it is that government, and not the petitioners personally, that
is responsible for their acts. Assuming that the trial can proceed and it is proved that the claimants have a right to the payment of damages, such award will have to be
satisfied not by the petitioners in their personal capacities but by the United States government as their principal. This will require that government to perform an affirmative
act to satisfy the judgment, viz., the appropriation of the necessary amount to cover the damages awarded, thus making the action a suit against that government without
its consent. cdrep

There should be no question by now that such complaint cannot prosper unless the government sought to be held ultimately liable has given its consent to be sued.
So we have ruled not only in Baer but in many other decisions where we upheld the doctrine of state immumity as applicable not only to our own government but also to
foreign states sought to be subjected to the jurisdiction of our courts. 15
The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right against the authority which makes the law on which the right
depends." 16 In the case of foreign states, the rule is derived from the principle of the sovereign equality of states which wisely admonishes that par in parem non habet
 imperium and that a contrary attitude would "unduly vex the peace of nations." 17 Our adherence to this precept is formally expressed in Article II, Section 2, of our
Constitution, where we reiterate from our previous charters that the Philippines "adopts the generally accepted principles of international law as part of the law of the land."
All this is not to say that in no case may a public officer be sued as such without the previous consent of the state. To be sure, there are a number of well-recognized
exceptions. It is clear that a public officer may be sued as such to compel him to do an act required by law, as where, say, a register of deeds refuses to record a deed of
sale; 18 or to restrain a Cabinet member, for example, from enforcing a law claimed to be unconstitutional; 19 or to compel the national treasurer to pay damages from an
already appropriated assurance fund; 20 or the commissioner of internal revenue to refund tax overpayments from a fund already available for the purpose; 21 or, in general,
to secure a judgment that the officer impleaded may satisfy by himself without the government itself having to do a positive act to assist him. We have also held that where
the government itself has violated its own laws, the aggrieved party may directly implead the government even without first filing his claim with the Commission on Audit as
normally required, as the doctrine of state immunity "cannot be used as an instrument for perpetrating an injustice." 22
This case must also be distinguished from such decisions as Festejo v. Fernando, 23 where the Court held that a bureau director could be sued for damages on a
personal tort committed by him when he acted without or in excess of authority in forcibly taking private property without paying just compensation therefor although he did
convert it into a public irrigation canal. It was not necessary to secure the previous consent of the state, nor could it be validly impleaded as a party defendant, as it was not
responsible for the defendant's unauthorized act.
The case at bar, to repeat, comes under the rule and not under any of the recognized exceptions. The government of the United States has not given its consent to
be sued for the official acts of the petitioners, who cannot satisfy any judgment that may be rendered against them. As it is the American government itself that will have to
perform the affirmative act of appropriating the amount that may be adjudged for the private respondents, the complaint must be dismissed for lack of jurisdiction.
The Court finds that, even under the law of public officers, the acts of the petitioners are protected by the presumption of good faith, which has not been overturned
by the private respondents. Even mistakes concededly committed by such public officers are not actionable as long as it is not shown that they were motivated by malice or
gross negligence amounting to bad faith. 24 This, too, is well-settled. 25 Furthermore, applying now our own penal laws, the letters come under the concept of privileged
communications and are not punishable, 26 let alone the fact that the resented remarks are not defamatory by our standards. It seems the private respondents have overstated
their case.
A final consideration is that since the questioned acts were done in the Olongapo Naval Base by the petitioners in the performance of their official duties and the
private respondents are themselves American citizens, it would seem only proper for the courts of this country to refrain from taking cognizance of this matter and to treat
it as coming under the internal administration of the said base.
The petitioners' counsel have submitted a memorandum replete with citations of American cases, as if they were arguing before a court of the United States. The
Court is bemused by such attitude. While these decisions do have persuasive effect upon us, they can at best be invoked only to support our own jurisprudence, which we
have developed and enriched on the basis of our own persuasions as a people, particularly since we became independent in 1946. LLjur
We appreciate the assistance foreign decisions offer us, and not only from the United States but also from Spain and other countries from which we have derived
some if not most of our own laws. But we should not place undue and fawning reliance upon them and regard them as indispensable mental crutches without which we cannot
come to our own decisions through the employment of our own endowments. We live in a different ambience and must decide our own problems in the light of our own
interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own concept of law and justice.
The private respondents must, if they are still so minded, pursue their claim against the petitioners in accordance with the laws of the United States, of which they
are all citizens and under whose jurisdiction the alleged offenses were committed. Even assuming that our own laws are applicable, the United States government has not
decided to give its consent to be sued in our courts, which therefore has not acquired the competence to act on the said claim.
WHEREFORE, the petition is GRANTED. The challenged orders dated March 8, 1977, August 9, 1977, and September 7, 1977, are SET ASIDE. The respondent court is
directed to DISMISS Civil Case No. 2077-O. Our Temporary restraining order of September 26, 1977, is made PERMANENT. No costs.
SO ORDERED.
||| (Sanders v. Veridiano II, G.R. No. L-46930, [June 10, 1988], 245 PHIL 63-76)

G.R. No. 84607. March 19, 1993.]

REPUBLIC OF THE PHILIPPINES, GEN. RAMON MONTANO, GEN. ALFREDO LIM, GEN. ALEXANDER AGUIRRE, COL. EDGAR DULA TORRES, COL. CEZAR
NAZARENO, MAJ. FILEMON GASMEN, PAT. NICANOR ABANDO, PFC SERAPIN CEBU, JR., GEN. BRIGIDO PAREDES, COL. ROGELIO MONFORTE, PFC ANTONIO
LUCERO, PAT. JOSE MENDIOLA, PAT. NELSON TUAZON, POLICE CORPORAL PANFILO ROGOS, POLICE LT. JUAN B. BELTRAN, PAT. NOEL MANAGBAO,
 MARINE THIRD CLASS TRAINEE (3CT) NOLITO NOGATO, 3CT ALEJANDRO B. NAGUIO, JR., EFREN ARCILLAS, 3CT AGERICO LUNA, 3CT BASILIO BORJA, 3CT
MANOLITO LUSPO, 3CT CRISTITUTO GERVACIO, 3CT MANUEL DELA CRUZ, JR., MARINE (CDC) BN., (CIVIL DISTURBANCE CONTROL), MOBILE DISPERSAL
TEAM (MDT), LT. ROMEO PAQUINTO, LT. LAONGLAANG GOCE, MAJ. DEMETRIO DE LA CRUZ, POLICE CAPTAIN RODOLFO NAVAL, JOHN DOE, RICHARD
DOE, ROBERTO DOE AND OTHER DOES, petitioners,vs. HON. EDILBERTO G. SANDOVAL, Regional Trial Court of Manila, Branch IX, ERLINDA C. CAYLAO,
ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO, ELMA GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM, PURITA YUMUL,
MIGUEL ARABE, TERESITA ARJONA, RONALDO CAMPOMANES AND CARMENCITA ARDONI VDA. DE CAMPOMANES, ROGELIO DOMUNICO, in their capacity as
heirs of the deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ, DIONESIO BAUTISTA, DANTE EVANGELIO, ADELFA ARIBE, DANILO ARJONA, VICENTE
CAMPOMANES, RONILO DOMUNICO) respectively; and (names of sixty-two injured victims) EDDIE AGUINALDO, FELICISIMO ALBASIA, NAPOLEON
BAUTISTA, DANILO CRUZ, EDDIE MENSOLA, ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO LABAMBA, JR., EFREN MACARAIG,
SOLOMON MANALOTO, ROMEO DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY CLEMENTE, GERARDO COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ,
ARTHUR FONTANILLA, WILSON GARCIA, CARLOS SIRAY, JOSE PERRAS, TOMAS VALLOS, ARNOLD ENAJE, MARIANITA DIMAPILIS, FRANCISCO ANGELES,
MARCELO ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS MENDOZA, VICTORINO QUIJANO, JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS
ALCANTARA, MAMERTO ALIAS, EMELITO ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO CABALLES, JR., JAIME CALDETO, FABIAN
CANTELEJO, RODRIGO CARABARA, ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO DEMASACA, FRANCISCO GONZALES, ERNESTO GONZALES, RAMIRO
JAMIL, JUAN LUCENA, PERLITO SALAYSAY, JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI, REMIGIO MAHALIN, BONG MANLULO,
ARMANDO MATIENZO, CARLO MEDINA, LITO NOVENARIO, and ROSELLA ROBALE, respondents.

[G.R. No. 84645. March 19, 1993.]

ERLINDA C. CAYLAO, ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO, ELMA GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM,
PURITA YUMUL, MIGUEL ARABE, TERESITA ARJONA, RONALDO CAMPOMANES AND CARMENCITA ARDONI VDA. DE CAMPOMANES, ROGELIO DOMUNICO, in
their capacity as heirs of the deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ, DIONESIO BAUTISTA, DANTE EVANGELIO, RODRIGO GRAMPA,
ANGELITO GUTIERREZ, BERNABE LAKINDANUM, ROBERTO YUMUL, LEOPOLDO ALONZO, ADELFA ARIBE, DANILO ARJONA, VICENTE CAMPOMANES, RONILO
DOMUNICO) respectively; and (names of sixty-two injured victims) EDDIE AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE
MENSOLA, ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO LABAMBA, JR. EFREN MACARAIG, SOLOMON MANALOTO, ROMEO
DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY CLEMENTE, GERARDO COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR FONTANILLA, WILSON
GARCIA, CARLOS SIRAY, JOSE PERRAS, TOMAS VALLOS, ARNOLD ENAJE, MARIANITA DIMAPILIS, FRANCISCO ANGELES, MARCELO ESGUERRA, JOSE
FERRER, RODEL DE GUIA, ELVIS MENDOZA, VICTORINO QUIJANO, JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS ALCANTARA, MAMERTO
ALIAS, EMELITO ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO CABALLES, JR., JAIME CALDETO, FABIAN CANTELEJO, RODRIGO
CARABARA, ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO DEMASACA, FRANCISCO GONZALES, ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA,
PERLITO SALAYSAY, JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI, REMIGIO MAHALIN, BONG MANLULO, ARMANDO MATIENZO,
CARLO MEDINA, LITO NOVENARIO, ROSELLA ROBALE, petitioners, vs.REPUBLIC OF THE PHILIPPINES, and HONORABLE EDILBERTO G. SANDOVAL,
Regional Trial Court of Manila, Branch 9, respondents.

SYLLABUS

1. POLITICAL LAW; PRINCIPLE OF STATE'S IMMUNITY FROM SUIT; CONSTRUED. — Under our Constitution the principle of immunity of the government from suit is expressly
provided in Article XVI, Section 3. The principle is based on the very essence of sovereignty, and on the practical ground that there can be no legal right as against the authority
that makes the law on which the right depends. It also rests on reasons of public policy — that public service would be hindered, and the public endangered, if the sovereign
authority could be subjected to law suits at the instance of every citizen and consequently controlled in the uses and dispositions of the means required for the proper
administration of the government.

2. ID.; ID.; NOT DEEMED WAIVED WHEN THE GOVERNMENT AUTHORIZES THE INDEMNIFICATION FOR THE VICTIM OR THROUGH PUBLIC ADDRESSES MADE BY THE PRESIDENT. —
Petitioners (Caylao group) advance the argument that the State has impliedly waived its sovereign immunity from suit. It is their considered view that by the recommendation
made by the Commission for the government to indemnity the heirs and victims of the Mendiola incident and by the public addresses made by then President Aquino in the
aftermath of the killings, the State has consented to be sued. This is not a suit against the State with its consent. Firstly, the recommendation made by the Commission
regarding indemnification of the heirs of the deceased and the victims of the incident by the government does not in any way mean that liability automatically attaches to the
State. It is important to note that A.O. 11 expressly states that the purpose of creating the Commission was to have a body that will conduct an "investigation of the disorder,
deaths and casualties that took place." In the exercise of its functions, A.O. 11 provides guidelines, and what is relevant to Our discussion reads: "1. Its conclusions regarding the
existence of probable cause for the commission of any offense and of the persons probably guilty of the same shall be sufficient compliance with the rules on preliminary
investigation and the charges arising therefrom may be filed directly with the proper court." In effect, whatever may be the findings of the Commission, the same shall only
serve as the cause of action in the event that any party decides to litigate his/her claim. Therefore, the Commission is merely a preliminary venue. The Commission is not the
end in itself. Whatever recommendation it makes cannot in any way bind the State immediately, such recommendation not having become final and executory. This is precisely
the essence of it being a fact-finding body. Secondly, whatever acts or utterances that then President Aquino may have done or said, the same are not tantamount to the State
having waived its immunity from suit. The President's act of joining the marchers, days after the incident, does not mean that there was an admission by the State of any
liability. In fact to borrow the words of petitioners (Caylao group), "it was an act of solidarity by the government with the people." Moreover, petitioners rely on President
Aquino's speech promising that the government would address the grievances of the rallyists. By this alone, it cannot be inferred that the State has admitted any liability, much
less can it be inferred that it has consented to the suit.

3. ID.; ID.; WHEN AVAILABLE; RULE; CASE AT BAR. — Some instances when a suit against the State is proper are" (1) When the Republic is sued by name; (2) When the suit is
against an unincorporated government agency; (3) When the suit is on its face against a government officer but the case is such that ultimate liability will belong not to the
officer but to the government. While the Republic in this case is sued by name, the ultimate liability does not pertain to the government. Although the military officers and
personnel, then party defendants, were discharging their official functions when the incident occurred, their functions ceased to be official the moment they exceeded their
authority. Based on the Commission findings, there was lack of justification by the government forces in the use of firearms. Moreover, the members of the police and military
crowd dispersal units committed a prohibited act under B.P. Blg. 880 as there was unnecessary firing by them in dispersing the marchers.

4. ID.; ID.; CANNOT INSTITUTIONALIZE IRRESPONSIBILITY AND NON-ACCOUNTABILITY NOR GRANT A PRIVILEGE STATUS NOT CLAIMED BY ANY OTHER OFFICIAL OF THE REPUBLIC. —
As early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea that he is a public agent acting under the color of his office when his acts are
wholly without authority. Until recently in 1991, this doctrine still found application, this Court saying that immunity from suit cannot institutionalize irresponsibility and non-
accountability nor grant a privileged status not claimed by any other official of the Republic. The military and police forces were deployed to ensure that the rally would be
peaceful and orderly as well as to guarantee the safety of the very people that they are duty-bound to protect. However, the facts as found by the trial court showed that they
fired at the unruly crowd to disperse the latter.

5. ID.; ID.; DOES NOT APPLY WHEN THE RELIEF DEMANDED BY THE SUIT REQUIRES NO AFFIRMATIVE OFFICIAL ACTION ON THE PART OF THE STATE NOR THE AFFIRMATIVE
DISCHARGE OF ANY OBLIGATION WHICH BELONGS TO THE STATE IN ITS POLITICAL CAPACITY. — While it is true that nothing is better settled than the general rule that a
sovereign state and its political subdivisions cannot be sued in the courts except when it has given its consent, it cannot be invoked by both the military officers to release them
from any liability, and by the heirs and victims to demand indemnification from the government. The principle of state immunity from suit does not apply, as in this case, when
the relief demanded by the suit requires no affirmative official action on the part of the State nor the affirmative discharge of any obligation which belongs to the State in its
political capacity, even though the officers or agents who are made defendants claim to hold or act only by virtue of a title of the state and as its agents and servants. This
Court has made it quite clear that even a "high position in the government does not confer a license to persecute or recklessly injure another."

DECISION

CAMPOS, JR., J p:
People may have already forgotten the tragedy that transpired on January 22, 1987. It is quite ironic that then, some journalists called it a Black Thursday, as a grim reminder
to the nation of the misfortune that befell twelve (12) rallyists. But for most Filipinos now, the Mendiola massacre may now just as well be a chapter in our history books. For
those however, who have become widows and orphans, certainly they would not settle for just that. They seek retribution for the lives taken that will never be brought back to
life again. LLjur

Hence, the heirs of the deceased, together with those injured(Caylao group), instituted this petition, docketed as G.R. No. 84645, under Section 1 of Rule 65 of the Rules of
Court, seeking the reversal and setting aside of the Orders of respondent Judge Sandoval, 1 dated May 31 and August 8, 1988, dismissing the complaint for damages of herein
petitioners against the Republic of the Philippines in Civil Case. No. 88-43351.
Petitioner, the Republic of the Philippines, through a similar remedy, docketed as G.R. No. 84607, seeks to set aside the Order of respondent Judge dated May 31, 1988, in Civil
Case No. 88-43351 entitled "Erlinda Caylao, et al. vs. Republic of the Philippines, et al."

The pertinent portion of the questioned Order 2 dated May 31, 1988, reads as follows:

"With respect however to the other defendants, the impleaded Military Officers, since they are being charged in their personal and official capacity, and
holding them liable, if at all, would not result in financial responsibility of the government, the principle of immunity from suit can not conveniently and
correspondingly be applied to them.

WHEREFORE, the case as against the defendant Republic of the Philippines is hereby dismissed. As against the rest of the defendants the motion to dismiss is
denied. They are given a period of ten (10) days from receipt of this order within which to file their respective pleadings."

On the other hand, the Order 3 , dated August 8, 1988, denied the motions filed by both parties, for a reconsideration of the abovecited Order, respondent Judge finding no
cogent reason to disturb the said order.

The massacre was the culmination of eight days and seven nights of encampment by members of the militant Kilusang Magbubukid sa Pilipinas (KMP) at the then Ministry (now
Department) of Agrarian Reform (MAR) at the Philippine Tobacco Administration Building along Elliptical Road in Diliman, Quezon City.

The farmers and their sympathizers presented their demands for what they called "genuine agrarian reform". The KMP, led by its national president, Jaime Tadeo, presented
their problems and demands, among which were: (a) giving lands for free to farmers; (b) zero retention of lands by landlords; and (c) stop amortizations of land payments.

The dialogue between the farmers and the MAR officials began on January 15, 1987. The two days that followed saw a marked increase in people at the encampment. It was
only on January 19, 1987 that Jaime Tadeo arrived to meet with then Minister Heherson Alvarez, only to be informed that the Minister can only meet with him the following day.
On January 20, 1987, the meeting was held at the MAR conference room. Tadeo demanded that the minimum comprehensive land reform program be granted immediately.
Minister Alvarez, for his part, can only promise to do his best to bring the matter to the attention of then President Aquino, during the cabinet meeting on January 21, 1987.

Tension mounted the following day. The farmers, now on their seventh day of encampment, barricaded the MAR premises and prevented the employees from going inside their
offices. They hoisted the KMP flag together with the Philippine flag.

At around 6:30 p.m. of the same day, Minister Alvarez, in a meeting with Tadeo and his leaders, advised the latter to instead wait for the ratification of the 1987
Constitution and just allow the government to implement its comprehensive land reform program. Tadeo, however, countered by saying that he did not believe in
the Constitution and that a genuine land reform cannot be realized under a landlord-controlled Congress. A heated discussion ensued between Tadeo and Minister Alvarez. This
notwithstanding, Minister Alvarez suggested a negotiating panel from each side to meet again the following day.

On January 22, 1987, Tadeo's group instead decided to march to Malacañang to air their demands. Before the march started, Tadeo talked to the press and TV media. He
uttered fiery words, the most telling of which were: ". . . inalis namin ang barikada bilang kahilingan ng ating Presidente, pero kinakailangan alisin din niya ang barikada sa
Mendiola sapagkat bubutasin din namin iyon at dadanak ang dugo . . ." 4

The farmers then proceeded to march to Malacañang, from Quezon Memorial Circle, at 10:00 a.m. They were later joined by members of other sectoral organizations such as
the Kilusang Mayo Uno (KMU), Bagong Alyansang Makabayan (BAYAN), League of Filipino Students (LFS) and Kongreso ng Pagkakaisa ng Maralitang Lungsod (KPML).

At around 1:00 p.m., the marchers reached Liwasang Bonifacio where they held a brief program. It was at this point that some of the marchers entered the eastern side of the
Post Office Building, and removed the steel bars surrounding the garden. Thereafter, they joined the march to Malacañang. At about 4:30 p.m., they reached C.M. Recto
Avenue.

In anticipation of a civil disturbance, and acting upon reports received by the Capital Regional Command (CAPCOM) that the rallyists would proceed to Mendiola to break through
the police lines and rush towards Malacañang, CAPCOM Commander General Ramon E. Montaño inspected the preparations and adequacy of the government forces to quell
impending attacks.

OPLAN YELLOW (Revised) was put into effect. Task Force Nazareno under the command of Col. Cesar Nazareno was deployed at the vicinity of Malacañang. The civil disturbance
control units of the Western Police District under Police Brigadier General Alfredo S. Lim were also activated.

Intelligence reports were also received that the KMP was heavily infiltrated by CPP/NPA elements and that an insurrection was impending. The threat seemed grave as there
were also reports that San Beda College and Centro Escolar University would be forcibly occupied.
In its report, the Citizens' Mendiola Commission (a body specifically tasked to investigate the facts surrounding the incident, Commission for short) stated that the government
anti-riot forces were assembled at Mendiola in a formation of three phalanges, in the following manner:

"(1) The first line was composed of policemen from police stations Nos. 3, 4, 6, 7, 8, 9 and 10 and the Chinatown detachment of the Western Police
District. Police Colonel Edgar Dula Torres, Deputy Superintendent of the Western Police District, was designated as ground commander of the CDC first line
of defense. The WPD CDC elements were positioned at the intersection of Mendiola and Legarda Streets after they were ordered to move forward from the
top of Mendiola bridge. The WPD forces were in khaki uniform and carried the standard CDC equipment — aluminum shields, truncheons and gas masks.

(2) At the second line of defense about ten (10) yards behind the WPD policemen were the elements of the Integrated National Police (INP) Field Force
stationed at Fort Bonifacio from the 61st and 62nd INP Field Force, who carried also the standard CDC equipment — truncheons, shields and gas masks. The
INP Field Force was under the command of Police Major Demetrio dela Cruz.

(3) Forming the third line was the Marine Civil Disturbance Control Battalion composed of the first and second companies of the Philippine Marines stationed
at Fort Bonifacio. The marines were all equipped with shields, truncheons and M-16 rifles (armalites) slung at their backs, under the command of Major
Felimon B. Gasmin. The Marine CDC Battalion was positioned in line formation ten (10) yards farther behind the INP Field Force.

At the back of the marines were four (4) 6 x 6 army trucks, occupying the entire width of Mendiola street, followed immediately by two water cannons, one
on each side of the street and eight fire trucks, four trucks on each side of the street. The eight fire trucks from Fire District I of Manila under Fire
Superintendent Mario C. Tanchanco, were to supply water to the two water cannons.

Stationed farther behind the CDC forces were the two Mobile Dispersal Teams (MDT) each composed of two tear gas grenadiers, two spotters, an assistant
grenadier, a driver and the team leader.

In front of the College of the Holy Spirit near Gate 4 of Malacañang stood the VOLVO Mobile Communications Van of the Commanding General of
CAPCOM/INP, General Ramon E. Montaño. At this command post, after General Montaño had conferred with TF Nazareno Commander, Colonel Cezar
Nazareno, about the adequacy and readiness of his forces, it was agreed that Police General Alfredo S. Lim would designate Police Colonel Edgar Dula
Torres and Police Major Conrado Francisco as negotiators with the marchers. Police General Lim then proceeded to the WPD CDC elements already
positioned at the foot of Mendiola bridge to relay to Police Colonel Torres and Police Major Francisco the instructions that the latter would negotiate with
the marchers." 5 (Emphasis supplied)

The marchers, at around 4:30 p.m., numbered about 10,000 to 15,000. From C.M. Recto Avenue, they proceeded toward the police lines. No dialogue took place between the
marchers and the anti-riot squad. It was at this moment that a clash occurred and, borrowing the words of the Commission "pandemonium broke loose". The Commission stated
in its findings, to wit:

". . . There was an explosion followed by throwing of pillboxes, stones and bottles. Steel bars, wooden clubs and lead pipes were used against the police.
The police fought back with their shields and truncheons. The police line was breached. Suddenly shots were heard. The demonstrators disengaged from the
government forces and retreated towards C.M. Recto Avenue. But sporadic firing continued from the government forces.

After the firing ceased, two MDTs headed by Lt. Romeo Paguinto and Lt. Laonglaan Goce sped towards Legarda Street and lobbed tear gas at the remaining
rallyist still grouped in the vicinity of Mendiola. After dispersing the crowd, the two MDTs, together with the two WPD MDTs, proceeded to Liwasang
Bonifacio upon order of General Montaño to disperse the rallyists assembled thereat. Assisting the MDTs were a number of policemen from the WPD, attired
in civilian clothes with white head bands, who were armed with long firearms." 6 (Emphasis ours)

After the clash, twelve (12) marchers were officially confirmed dead, although according to Tadeo, there were thirteen (13) dead, but he was not able to give the name and
address of said victim. Thirty-nine (39) were wounded by gunshots and twelve (12) sustained minor injuries, all belonging to the group of the marchers.

Of the police and military personnel, three (3) sustained gunshot wounds and twenty (20) suffered minor physical injuries such as abrasions, contusions and the like.

In the aftermath of the confrontation, then President Corazon C. Aquino issued Administrative Order No. 11, 7 (A.O. 11, for brevity) dated January 22, 1987, which created the
Citizens' Mendiola Commission. The body was composed of retired Supreme Court Justice Vicente Abad Santos as Chairman, retired Supreme Court Justice Jose Y. Feria and Mr.
Antonio U. Miranda, both as members. A.O. 11 stated that the Commission was created precisely for the "purpose of conducting an investigation of the disorder, deaths, and
casualties that took place in the vicinity of Mendiola Bridge and Mendiola Street and Claro M. Recto Avenue, Manila, in the afternoon of January 22, 1987". The Commission was
expected to have submitted its findings not later than February 6, 1987. But it failed to do so. Consequently, the deadline was moved to February 16, 1987 by Administrative
Order No. 13. Again, the Commission was unable to meet this deadline. Finally, on February 27, 1987, it submitted its report, in accordance with Administrative Order No. 17,
issued on February 11, 1987.

In its report, the Commission recapitulated its findings, to wit:

"(1) The march to Mendiola of the KMP led by Jaime Tadeo, together with the other sectoral groups, was not covered by any permit as required under Batas
Pambansa Blg. 880, the Public Assembly Act of 1985, in violation of paragraph (a) Section 13, punishable under paragraph (a), Section 14 of said law.

(2) The crowd dispersal control units of the police and the military were armed with .38 and .45 caliber handguns, and M-16 armalites, which is a prohibited
act under paragraph 4(g), Section 13, and punishable under paragraph (b), Section 14 of Batas Pambansa Blg. 880.

(3) The security men assigned to protect the WPD, INP Field Force, the Marines and supporting military units, as well as the security officers of the police
and military commanders were in civilian attire in violation of paragraph (a), Section 10, Batas Pambansa 880.

(4) There was unnecessary firing by the police and military crowd dispersal control units in dispersing the marchers, a prohibited act under paragraph (e),
Section 13, and punishable under paragraph (b), Section 14, Batas Pambansa Blg. 880.

(5) The carrying and use of steel bars, pillboxes, darts, lead pipe, wooden clubs with spikes, and guns by the marchers as offensive weapons are prohibited
acts punishable under paragraph (g), Section 13, and punishable under paragraph (e), Section 14 of Batas Pambansa Blg. 880.

(6) The KMP farmers broke off further negotiations with the MAR officials and were determined to march to Malacañang, emboldened as they are, by the
inflammatory and incendiary utterances of their leader, Jaime Tadeo — "bubutasin namin ang barikada. Dadanak and dugo . . . Ang nagugutom na magsasaka
ay gagawa ng sariling butas . . ."

(7) There was no dialogue between the rallyists and the government forces. Upon approaching the intersections of Legarda and Mendiola, the marchers
began pushing the police lines and penetrated and broke through the first line of the CDC contingent.

(8) The police fought back with their truncheons and shields. They stood their ground but the CDC line was breached. There ensued gunfire from both sides.
It is not clear who started the firing.

(9) At the onset of the disturbance and violence, the water cannons and tear gas were not put into effective use to disperse the rioting crowd.

(10) The water cannons and fire trucks were not put into operation because (a) there was no order to use them; (b) they were incorrectly prepositioned; and
(c) they were out of range of the marchers.

(11) Tear gas was not used at the start of the disturbance to disperse the rioters. After the crowd had dispersed and the wounded and dead were being
carried away, the MDTs of the police and the military with their tear gas equipment and components conducted dispersal operations in the Mendiola area
and proceeded to Liwasang Bonifacio to disperse the remnants of the marchers.

(12) No barbed wire barricade was used in Mendiola but no official reason was given for its absence." 8

From the results of the probe, the Commission recommended 9 the criminal prosecution of four unidentified, uniformed individuals, shown either on tape or in pictures, firing at
the direction of the marchers. In connection with this, it was the Commission's recommendation that the National Bureau of Investigation (NBI) be tasked to undertake
investigations regarding the identities of those who actually fired their guns that resulted in the death of or injury to the victims of the incident. The Commission also suggested
that all the commissioned officers of both the Western Police District and the INP Field Force, who were armed during the incident, be prosecuted for violation of paragraph 4(g)
of Section 13, Batas Pambansa Blg. 880, the Public Assembly Act of 1985. The Commission's recommendation also included the prosecution of the marchers, for carrying deadly
or offensive weapons, but whose identities have yet to be established. As for Jaime Tadeo, the Commission said that he should be prosecuted both for violation of paragraph (a),
Section 13, Batas Pambansa Blg. 880 for holding the rally without a permit and for violation of Article 142, as amended, of the Revised Penal Code for inciting to sedition. As for
the following officers, namely: (1) Gen. Ramon E. Montaño; (2) Police Gen. Alfredo S. Lim; (3) Police Gen. Edgar Dula Torres; (4) Police Maj. Demetrio dela Cruz; (5) Col. Cezar
Nazareno; and (5) Maj. Felimon Gasmin, for their failure to make effective use of their skill and experience in directing the dispersal operations in Mendiola, administrative
sanctions were recommended to be imposed. LLpr

The last and the most significant recommendation of the Commission was for the deceased and wounded victims of the Mendiola incident to be compensated by the
government. It was this portion that petitioners (Caylao group) invoke in their claim for damages from the government.
Notwithstanding such recommendation, no concrete form of compensation was received by the victims. Thus, on July 27, 1987, herein petitioners, (Caylao group) filed a formal
letter of demand for compensation from the Government. 10 This formal demand was indorsed by the office of the Executive Secretary to the Department of Budget and
Management (DBM) on August 13, 1987. The House Committee on Human Rights, on February 10, 1988, recommended the expeditious payment of compensation to the Mendiola
victims. 11

After almost a year, on January 20, 1988, petitioners (Caylao group) were constrained to institute an action for damages against the Republic of the Philippines, together with
the military officers, and personnel involved in the Mendiola incident, before the trial court. The complaint was docketed as Civil Case No. 88-43351.

On February 23, 1988, the Solicitor General filed a Motion to Dismiss on the ground that the State cannot be sued without its consent. Petitioners opposed said motion on March
16, 1988, maintaining that the State has waived its immunity from suit and that the dismissal of the instant action is contrary to both the Constitution and the International Law
on Human Rights.

Respondent Judge Sandoval, in his first questioned Order, dismissed the complaint as against the Republic of the Philippines on the ground that there was no waiver by the
State. Petitioners (Caylao group) filed a Motion for Reconsideration therefrom, but the same was denied by respondent judge in his Order dated August 8, 1988. Consequently,
Caylao and her co-petitioners filed the instant petition.

On the other hand, the Republic of the Philippines, together with the military officers and personnel impleaded as defendants in the court below, filed its petition for certiorari.

Having arisen from the same factual beginnings and raising practically identical issues, the two (2) petitions were consolidated and will therefore be jointly dealt with and
resolved in this Decision.
The resolution of both petitions revolves around the main issue of whether or not the State has waived its immunity from suit.

Petitioners (Caylao group) advance the argument that the State has impliedly waived its sovereign immunity from suit. It is their considered view that by the recommendation
made by the Commission for the government to indemnify the heirs and victims of the Mendiola incident and by the public addresses made by then President Aquino in the
aftermath of the killings, the State has consented to be sued.

Under our Constitution the principle of immunity of the government from suit is expressly provided in Article XVI, Section 3. The principle is based on the very essence of
sovereignty, and on the practical ground that there can be no legal right as against the authority that makes the law on which the right depends. 12 It also rests on reasons of
public policy — that public service would be hindered, and the public endangered, if the sovereign authority could be subjected to law suits at the instance of every citizen and
consequently controlled in the uses and dispositions of the means required for the proper administration of the government. 13

This is not a suit against the State with its consent.

Firstly, the recommendation made by the Commission regarding indemnification of the heirs of the deceased and the victims of the incident by the government does not in any
way mean that liability automatically attaches to the State. It is important to note that A.O. 11 expressly states that the purpose of creating the Commission was to have a body
that will conduct an "investigation of the disorder, deaths and casualties that took place." 14 In the exercise of its functions, A.O. 11 provides guidelines, and what is relevant to
Our discussion reads:

"1. Its conclusions regarding the existence of probable cause for the commission of any offense and of the persons probably guilty of the same shall be
sufficient compliance with the rules on preliminary investigation and the charges arising therefrom may be filed directly with the proper court." 15

In effect, whatever may be the findings of the Commission, the same shall only serve as the cause of action in the event that any party decides to litigate his/her claim.
Therefore, the Commission is merely a preliminary venue. The Commission is not the end in itself. Whatever recommendation it makes cannot in any way bind the State
immediately, such recommendation not having become final and executory. This is precisely the essence of it being a fact-finding body.

Secondly, whatever acts or utterances that then President Aquino may have done or said, the same are not tantamount to the State having waived its immunity from suit. The
President's act of joining the marchers, days after the incident, does not mean that there was an admission by the State of any liability. In fact to borrow the words of
petitioners (Caylao group), "it was an act of solidarity by the government with the people". Moreover, petitioners rely on President Aquino's speech promising that the
government would address the grievances of the rallyists. By this alone, it cannot be inferred that the State has admitted any liability, much less can it be inferred that it has
consented to the suit.

Although consent to be sued may be given impliedly, still it cannot be maintained that such consent was given considering the circumstances obtaining in the instant case.
Thirdly, the case does not qualify as a suit against the State.

Some instances when a suit against the State is proper are: 16

(1) When the Republic is sued by name;

(2) When the suit is against an unincorporated government agency;

(3) When the suit is on its face against a government officer but the case is such that ultimate liability will belong not to the officer but to the government.

While the Republic in this case is sued by name, the ultimate liability does not pertain to the government. Although the military officers and personnel, then party defendants,
were discharging their official functions when the incident occurred, their functions ceased to be official the moment they exceeded their authority. Based on the Commission
findings, there was lack of justification by the government forces in the use of firearms. 17 Moreover, the members of the police and military crowd dispersal units committed a
prohibited act under B.P. Blg. 880 18 as there was unnecessary firing by them in dispersing the marchers. 19

As early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea that he is a public agent acting under the color of his office when his acts are
wholly without authority. 20 Until recently in 1991, 21 this doctrine still found application, this Court saying that immunity from suit cannot institutionalize irresponsibility and
non-accountability nor grant a privileged status not claimed by any other official of the Republic. The military and police forces were deployed to ensure that the rally would be
peaceful and orderly as well as to guarantee the safety of the very people that they are duty-bound to protect. However, the facts as found by the trial court showed that they
fired at the unruly crowd to disperse the latter.

While it is true that nothing is better settled than the general rule that a sovereign state and its political subdivisions cannot be sued in the courts except when it has given its
consent, it cannot be invoked by both the military officers to release them from any liability, and by the heirs and victims to demand indemnification from the government. The
principle of state immunity from suit does not apply, as in this case, when the relief demanded by the suit requires no affirmative official action on the part of the State nor the
affirmative discharge of any obligation which belongs to the State in its political capacity, even though the officers or agents who are made defendants claim to hold or act only
by virtue of a title of the state and as its agents and servants. 22 This Court has made it quite clear that even a "high position in the government does not confer a license to
persecute or recklessly injure another." 23

The inescapable conclusion is that the State cannot be held civilly liable for the deaths that followed the incident. Instead, the liability should fall on the named defendants in
the lower court. In line with the ruling of this court in Shauf vs. Court of Appeals, 24 herein public officials, having been found to have acted beyond the scope of their
authority, may be held liable for damages.

WHEREFORE, finding no reversible error and no grave abuse of discretion committed by respondent Judge in issuing the questioned orders, the instant petitions are hereby
DISMISSED.
SO ORDERED.

||| (Republic v. Sandoval, G.R. No. 84607, 84645, [March 19, 1993])
 [G.R. No. L-5156. Marzo 11, 1954.]

CARMEN FESTEJO, demandante y apelante, contra ISAIAS FERNANDO, Director de Obras Públicas, demandado y apelado.

D. Eloy B. Bello en representacion de la apelante.

El Procurador General Sr. Pompeyo Díaz y el Procurador Sr. Antonio A. Torres en representacion del apelado.

SYLLABUS

PRACTICA FORENSE; ACCION CONTRA UN FUNCIONARIO PUBLICO POR DAÑOS Y PERJUICIOS. — La acción contra el demandado como Director de Obras Públicas
encargado y responsable de la construcción de los sistemas de irrigación en Filipinas, por alegadas extralimitaciones en el desempeño de sus funciones oficiales, es una dirigida
personalmente contra él. "Ordinarily the officer or employee committing the tort is personally liable therefor, and may be sued as any other citizen and held answerable for
whatever injury or damage results from his tortious act." (49 Am. Jur. 28.) En ese caso, no procede el sobreseimiento de la demanda por el fundamento de que la acción es
una dirigida contra la República de Filipinas.

DECISION

DIOKNO, M p:

Carmen Festejo, dueña de unos terrenos azucareros, de un total de unas 9 hectáreas y media de superfice, demandó a "Isaías Fernando Director, Bureau of Public
Works, que como tal Director de Obras Públicas tiene a su cargo los sistemas y proyectos de irrigación y es el funcionario responsable de la construcción de los sistemas
de irrigación en el país," alegando que — .
"The defendant, as Director of the Bureau of Public Works, without authority obtained first from the Court of First Instance of Ilocos Sur, without
obtaining first a right of way, and without the consent and knowledge of the plaintiff, and against her express objection, unlawfully took possession of portions
of the three parcels of land described above, and caused an irrigation canal to be constructed on the portion of the three parcels of land on or about the
month of February 1951 the aggregate area being 24,179 square meters to the damage and prejudice of the plaintiff." — R. on A., p. 3.
causando a ella variados daños y perjuicios. Pidió, en su consecuencia, sentencia condenando el demandado:
". . . to return or cause to be returned the possession of the portions of land unlawfully occupied and appropriated in the aggregate area of 24,179
square meters and to return the land to its former condition
under the expenses of the defendant." . . .
"In the remote event that the portions of land unlawfully occupied and appropriated can not be returned to the plaintiff, then to order the
defendant to pay to the plaintiff the sum of P19,343.20 as value of the portions totalling an area of 24,179 square meters;" — R. on A., p. 5.
y además a pagar P9,756.19 de daños y P5,000 de honorarios de abogado, con las costas R. on A., pp. 5-6.
El demandado, por medio del Procurador General, presentó moción de sobreseimiento de la demanda por el fundamento de que el Juzgado no tiene jurisdicción
para dictar sentencia válida contra él, toda vez que judicialmente la reclamación es contra la República de Filipinas, y esta no ha presentado su consentimiento a la
demanda. El Juzgado inferior estimó la moción y sobreseyó la demanda sin perjuicio y sin costas.
En apelación, la demandante sostiene que fué un error considerar la demanda como una contra la República y sobreseer en su virtud la demanda.
 La moción contra "Isaías Fernando, Director de Obras Públicas, encargado y responsable de la construcción de los sistemas de irrigación en Filipinas" es una
dirigida personalmente contra él, por actos que asumió ejecutar en su concepto oficial. La ley no le exime de responsabilidad por las extralimitaciones que cometa o haga
cometer en el desempeño de sus funciones oficiales.
Un caso semejante es el de Nelson vs. Bobcock (1933) 18 minn. 584, 24 NW 49, 90 ALR 1472. Allí el Comisionado de Carreteras, al mejorar un trozo de la carretera
ocupó o se apropió de terrenos contiguos al derecho de paso. El Tribunal Supremo del Estado declaró que es personalmente responsable al dueño de los daños causados.
Declaró además que la ratificación de lo que hicieron sus subordinados era equivalente a una orden a los mismos. He aquí lo dijo el Tribunal.
"We think the evidence and conceded facts permitted the jury in finding that in the trespass on plaintiff's land defendant committed acts outside
the scope of his authority. When he went outside the boundaries of the right of way upon plaintiff's land and damaged it or destroyed its former condition
and usefulness, he must be held to have designedly departed from the duties imposed on him by law. There can be no claim that he thus invaded plaintiff's
land southeasterly of the right of way innocently. Surveys clearly marked the limits of the land appropriated for the right of way of this trunk highway before
construction began. . . .
"'Ratification may be equivalent to command, and cooperation may be inferred from acquiescence where there is power to restrain.' It is unnecessary
to consider other cases cited, . . ., for as before suggested, the jury could find or infer that, in so far as there was actual trespass by appropriation of plaintiff's
land as a dumping place for the rock to be removed from the additional appropriated right of way, defendant planned, approved, and ratified what was done
by his subordinates." — Nelson vs. Bobcock, 90 A. L. R., 1472, 1476, 1477.
La doctrina sobre la responsabilidad civil de los funcionarios en casos parecidos se resume como sigue:
"Ordinarily the officer or employee committing the tort is personally liable therefor, and may be sued as any other citizen and held answerable for
whatever injury or damage results from his tortious act." — 49 Am. Jur. 289. . . If an officer, even while acting under color of his office, exceeds the power
conferred on him by law, he cannot shelter himself under the plea that he is a public agent." — 43 Am. Jur. 86.
"It is a general rule that an officer-executive, administrative quasi-judicial, ministerial, or otherwise who acts outside the scope of his jurisdiction
and without authorization of law may thereby render himself amenable to personal liability in a civil suit. If he exceeds the power conferred on him by law,
he cannot shelter himself by the plea that he is a public agent acting under color of his office, and not personally. In the eye of the law, his acts then are
wholly without authority." — 43 Am. Jur. 89-90.
El articulo 32 del Código Civil dice, a su vez:
"ART. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes
or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:
xxx xxx xxx.
"(6) The right against deprivation of property without due process of law;
xxx xxx xxx.
"In any of the cases referred to in this article, whether or not the defendant's acts or omission constitutes a criminal offense, the aggrieved party
has a right to commence an entirely separate and distinct civil action for damages, and for other relief. Such civil action shall proceed independently of any
criminal prosecution (if the latter be instituted), and may be proved by a preponderance of evidence.
"The indemnity shall include moral damages. Exemplary damages may also be adjudicated."
Veanse tambien Lung vs. Aldanese, 45 Phil., 784; Syquia vs. Almeda, No. L-1648, Agosto 17, 1947; Marquez vs. Nelson, No. L-2412, Septiembre 1950.
Se revoca la orden apelada y se ordena la continuación de la tramitación de la demanda conforme proveen los reglamentos. Sin especial pronunciamiento en cuanto
a las costas. Así se ordena.
Padilla, Reyes, Jugo, Bautista Angelo y Labrador, MM., estan conformes.

Separate Opinions

CONCEPCION, J., dissenting:

 To my mind, the allegations of the complaint lead to no other conclusion than that appellee Isaias Fernando is a party in this case, not in his personal capacity, but
as an officer of the Government. According to said pleading the defendant is "Isaias Fernando, Director, Bureau of Public Works." Moreover, in paragraphs 4 and 5 of the
complaint, it is alleged:
"4. That the defendant as Director of the Bureau of Public Works is in charge of irrigation projects and systems, and the official responsible for the
construction of irrigation system in the Philippines:
5. That the defendant, as Director of the Bureau of Public Works, without authority obtained first from the Court of First Instance of Ilocos Sur,
without obtaining first a right of way and without the consent and knowledge of the plaintiff, and against her express objection, unlawfully took possession of
portions of the three parcels of land described above, and caused an irrigation canal to be constructed on the portion of the three parcels of land on or about
the month of February 1951 the aggregate area being 24,179 square meters to the damage and prejudice of the plaintiff." (Italics supplied.)
The emphasis thus placed upon the allegation that the acts complained of were performed by said defendant "as Director of the Bureau of Public Works," clearly
shows that the designation of his office was included in the title of the case to indicate that he was being sued in his official capacity. This conclusion is bolstered up by the
fact that, among other things, plaintiff prays, in the complaint, for a judgment.
"Ordering the defendant to return or caused to be returned the possession of the portions of land unlawfully occupied and appropriated in the
aggregate area of 24,179 square meters and to return the land to its former condition under the expense of the defendant". (Paragraph a, of the complaint).
We take judicial notice of the fact that the irrigation projects and system referred to in the complaint — of which the defendant, Isaias Fernando, according to the
same pleading, is "in charge" and for which he is "responsible" as Director of the Bureau of Public Works — are established and operated with public funds, which pursuant to
the Constitution, must be appropriated by law. Irrespective of the manner in which the construction may have been undertaken by the Bureau of Public Works, the system
or canal is, therefore, a property of the Government. Consequently, in praying that possession of the portions of land occupied by the irrigation canal involved in the
present case be returned to plaintiff herein, and that said land be restored to its former condition, plaintiff seeks to divest the Government of its possession of said
irrigation canal, and, what is worse, to cause said property of the Government to be removed or destroyed. As held in Syquia vs. Lopez * (47 Off. Gaz., 665), the
Government is, accordingly, "the real party in interest as defendant" in the case at bar. In other words, the same partakes of the nature of a suit against the state and may
not be maintained without its consent.
Hence I am constrained to dissent.
||| (Festejo v. Fernando, G.R. No. L-5156, [March 11, 1954], 94 PHIL 504-509)
 [G.R. No. 76607. February 26, 1990.]

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE REEVES, petitioners, vs. HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional
Trial Court, Angeles City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO C. DEL PILAR, respondents.

[G.R. No. 79470. February 26, 1990.]

UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF, WILFREDO BELSA, PETER ORASCION AND ROSE CARTALLA, petitioners, vs. HON. RODOLFO D.
RODRIGO, as Presiding Judge of Branch 7, Regional Trial Court (BAGUIO CITY), La Trinidad, Benguet and FABIAN GENOVE, respondents.

[G.R. No. 80018. February 26, 1990.]

UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F. BOSTICK, petitioners, vs. HON. JOSEFINA D. CEBALLOS, As Presiding Judge,
Regional Trial Court, Branch 66, Capas, Tarlac, and LUIS BAUTISTA, respondents.

[G.R. No. 80258. February 26, 1990.]

UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC ERNEST E. RIVENBURGH, AIC ROBIN BLEVINS, SGT. NOEL A. GONZALES, SGT. THOMAS
MITCHELL, SGT. WAYNE L. BENJAMIN, ET AL., petitioners, vs. HON. CONCEPCION S. ALARCON VERGARA, as Presiding Judge, Branch 62 REGIONAL TRIAL
COURT, Angeles City, and RICKY SANCHEZ, FREDDIE SANCHEZ AKA FREDDIE RIVERA, EDWIN MARIANO, AKA JESSIE DOLORES SANGALANG, ET AL., respondents.

Luna, Sison & Manas Law Office for petitioners.

SYLLABUS

1. CONSTITUTIONAL LAW; DOCTRINE OF STATE IMMUNITY FROM SUIT; GENERALLY ACCEPTED PRINCIPLE OF INTERNATIONAL LAW; EMBODIED IN PHILIPPINE CONSTITUTION. — 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. This latter provision merely reiterates a policy earlier embodied in the 1935 and
1973 Constitutionsand also intended to manifest our resolve to abide by the rules of the international community.

2. ID., ID., ID., PRINCIPLE DEEMED INCORPORATED IN THE LAW OF EVERY CIVILIZED STATE; STATE IS AUTOMATICALLY OBLIGATED TO COMPLY WITH THE PRINCIPLE. — Even
without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation. Under this doctrine, as accepted
by the majority of states, such principles are deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the society of nations.
Upon its admission to such society, the state is automatically obligated to comply with these principles in its relations with other states.

3. ID.; ID.; BASIS. — 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." 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."

4. ID., ID., APPLIES TO OFFICIALS OF THE STATE FOR ACTS PERFORMED IN THE DISCHARGE OF THEIR DUTIES. — 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. In such a situation, the state may move to
dismiss the complaint on the ground that it has been filed without its consent.

5. ID., ID., NOT ABSOLUTE AND MAY BE SUED IF STATE GIVES 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.

6. ID., ID., ID., CONSENT MAY BE GIVEN EXPRESSLY OR IMPLIEDLY. — 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 or it itself commences litigation.

7. ID., ID., ID., ID., WAIVER OF IMMUNITY; INSTANCES. — The general law waiving the immunity of the state from suit is found in Act No. 3083, under which the Philippine
government "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." In Merritt v. Government of the Philippine Islands, a special law was passed to enable a person to sue the government for an alleged tort. When the
government enters into a contract, it is deemed to have descended to the level of the other contracting party and divested of its sovereign immunity from suit with its implied
consent. Waiver is also implied when the government files a complaint, thus opening itself to a counterclaim.

8. ID., ID., ID., ID., ID., ID., EXCEPTIONS. — 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. We have held that 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. As for the filing of a complaint by the government, suability will result only where the government is claiming affirmative relief from the
defendant.

9. ID., ID., ID., ID., ID., UNITED STATES OF AMERICA DEEMED TO HAVE IMPLIEDLY WAIVED ITS NON-SUABILITY IF IT HAS ENTERED INTO A CONTRACT IN ITS PROPRIETARY
CAPACITY. — There is no question that the United States of America, 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. This was our
ruling in United States of America v. Ruiz, where the transaction in question dealt with the improvement of the wharves in the naval installation at Subic Bay. As this was a
clearly governmental function, we held that the contract did not operate to divest the United States of its sovereign immunity from suit.

10. ID., ID., ID., ID., ID., CHARGES MAY NOT BE SUMMARILY DISMISSED ON MERE ASSERTION THAT ACTS ARE IMPUTABLE TO THE UNITED STATES OF AMERICA. — 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 United States. 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 United States of America, 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 United States itself is not involved. If found liable, they and they
alone must satisfy the judgment.

11. ID., ID., ID., ID., ID., PETITIONERS CHARGED WITH THE ENFORCEMENT OF LAW REGARDING PROHIBITED DRUGS ARE AGENTS OF THE UNITED STATES. — It is clear from a study
of the records of G.R. No. 80018 that the individually-named petitioners therein were acting in the exercise of their official functions when they conducted the buy-bust
operation against the complainant and thereafter testified against him at his trial. The said petitioners were in fact connected with the Air Force Office of Special Investigators
and were charged precisely with the function of preventing the distribution, possession and use of prohibited drugs and prosecuting those guilty of such acts. It cannot for a
moment be imagined that they were acting in their private or unofficial capacity when they apprehended and later testified against the complainant. It follows that for
discharging their duties as agents of the United States, they cannot be directly impleaded for acts imputable to their principal, which has not given its consent to be sued.

12. ID., ID., ID., ID., ID., SUABILITY AND LIABILITY, DIFFERENTIATED. — There seems to be a failure to distinguish between suability and liability and a misconception that the
two terms are synonymous. 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.

13. ID., ID., ID., ID., ID., ARTICLE 2180 OF THE CIVIL CODE ESTABLISHES A RULE OF LIABILITY. — The private respondent invokes Article 2180 of the Civil Code which holds the
government liable if it acts through a special agent. The argument, it would seem, is premised on the ground that since the officers are designated "special agents," the United
States government should be liable for their torts. The said article establishes a rule of liability, not suability. The government may be held liable under this rule only if it first
allows itself to be sued through any of the accepted forms of consent.
14. ID., ID., ID., ID., ID., AN AGENT PERFORMING REGULAR FUNCTIONS IS NOT A SPECIAL AGENT EVEN IF SO DENOMINATED; ARTICLE APPLIES ONLY TO PHILIPPINE GOVERNMENT.
— Moreover, the agent performing his regular functions is not a special agent even if he is so denominated, as in the case at bar. No less important, the said provision appears to
regulate only the relations of the local state with its inhabitants and, hence, applies only to the Philippine government and not to foreign governments impleaded in our courts.

15. ID., ID., ID., ID., ID., EXPRESS WAIVER MUST BE EFFECTED THROUGH A DULY-ENACTED STATUTE. — We reject the conclusion of the trial court that the answer filed by the
special counsel of the Office of the Sheriff Judge Advocate of Clark Air Base was a submission by the United States government to its jurisdiction. As we noted in Republic v.
Purisima, express waiver of immunity cannot be made by a mere counsel of the government but must be effected through a duly-enacted statute. Neither does such answer
come under the implied forms of consent as earlier discussed.

16. ID., ID., ID., ID., ID., INQUIRY MUST BE MADE AS TO WHAT CAPACITY PETITIONERS WERE ACTING. — But even as we are certain that individual petitioners in G.R. No. 80018
were acting in the discharge of their official functions, we hesitate to make the same conclusion in G.R. No. 80258. The contradictory factual allegations in this case deserve in
our view a closer study of what actually happened to the plaintiffs. The record is too meager to indicate if the defendants were really discharging their official duties or had
actually exceeded their authority when the incident in question occurred. Lacking this information, this Court cannot directly decide this case. The needed inquiry must first be
made by the lower court so it may assess and resolve the conflicting claims of the parties on the basis of the evidence that has yet to be presented at the trial. Only after it
shall have determined in what capacity the petitioners were acting at the time of the incident in question will this Court determine, if still necessary, if the doctrine of state
immunity is applicable.

17. ID., ID., ID., ID., ID., DOCTRINE CANNOT BE INVOKED WHERE THE STATE ENTERED INTO A CONTRACT IN THE DISCHARGE OF ITS PROPRIETARY FUNCTION; CASE AT BAR. —
From the circumstances, the Court can assume that the restaurant services offered at the John Hay Air Station partake of the nature of a business enterprise undertaken by the
United States government in its proprietary capacity. Such services are not extended to the American servicemen for free as a perquisite of membership in the Armed Forces of
the United States. Neither does it appear that they are exclusively offered to these servicemen; on the contrary, it is well known that they are available to the general public as
well, including the tourists in Baguio City, many of whom make it a point to visit John Hay for this reason. All persons availing themselves of this facility pay for the privilege
like all other customers as in ordinary restaurants. Although the prices are concededly reasonable and relatively low, such services are undoubtedly operated for profit, as a
commercial and not a governmental activity. The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to justify the dismissal of the
damage suit against them by Genove. Such defense will not prosper even if it be established that they were acting as agents of the United States when they investigated and
later dismissed Genove. For that matter, not even the United States government itself can claim such immunity. The reason is that by entering into the employment contract
with Genove in the discharge of its proprietary functions, it impliedly divested itself of its sovereign immunity from suit.

18. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; DISMISSAL FOR THE UNBELIEVABLY NAUSEATING ACT IS PROPER. — The dismissal of the private respondent
was decided upon only after a thorough investigation where it was established beyond doubt that he had polluted the soup stock with urine. The investigation, in fact, did not
stop there. Despite the definitive finding of Genove's guilt, the case was still referred to the board of arbitrators provided for in the collective bargaining agreement. This board
unanimously affirmed the findings of the investigators and recommended Genove's dismissal. There was nothing arbitrary about the proceedings. The petitioners acted quite
properly in terminating the private respondent's employment for his unbelievably nauseating act. It is surprising that he should still have the temerity to file his complaint for
damages after committing his utterly disgusting offense.

19. ID.; ID.; BARBERSHOPS ARE NOT AGENCIES OF THE UNITED STATES ARMED FORCES; IMMUNITY FROM SUIT CANNOT BE INVOKED. — Concerning G.R. No. 76607, we also find
that the barbershops subject of the concessions granted by the United States government are commercial enterprises operated by private persons. They are not agencies of the
United States Armed Forces nor are their facilities demandable as a matter of right by the American servicemen. This being the case, the petitioners cannot plead any immunity
from the complaint filed by the private respondents in the court below. The contracts in question being decidedly commercial, the conclusion reached in the United States of
America v. Ruiz case cannot be applied here.

DECISION

CRUZ, J p:

These cases have been consolidated because they all involve the doctrine of state immunity. The United States of America was not impleaded in the complaints below but has
moved to dismiss on the ground that they are in effect suits against it to which it has not consented. It is now contesting the denial of its motions by the respondent judges. cdll
In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force stationed in Clark Air Base in connection with the bidding conducted by them for
contracts for barbering services in the said base.

On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S. Air Force, solicited bids for such contracts through its contracting officer, James F.
Shaw. Among those who submitted their bids were private respondents Roberto T. Valencia, Emerenciana C. Tanglao, and Pablo C. del Pilar. Valencia had been a concessionaire
inside Clark for 34 years; del Pilar for 12 years; and Tanglao for 50 years. LLjur
The bidding was won by Ramon Dizon, over the objection of the private respondents, who claimed that he had made a bid for four facilities, including the Civil Engineering
Area, which was not included in the invitation to bid.

The private respondents complained to the Philippine Area Exchange (PHAX). The latter, through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse,
explained that the Civil Engineering concession had not been awarded to Dizon as a result of the February 24, 1986 solicitation. Dizon was already operating this concession,
then known as the NCO club concession, and the expiration of the contract had been extended from June 30, 1986 to August 31, 1986. They further explained that the
solicitation of the CE barbershop would be available only by the end of June and the private respondents would be notified. Cdpr

On June 30,1986, the private respondents filed a complaint in the court below to compel PHAX and the individual petitioners to cancel the award to defendant Dizon, to
conduct a rebidding for the barbershop concessions and to allow the private respondents by a writ of preliminary injunction to continue operating the concessions pending
litigation. 1

Upon the filing of the complaint, the respondent court issued an ex parte order directing the individual petitioners to maintain the status quo.

On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for preliminary injunction on the ground that the action was in effect a suit against the
United States of America, which had not waived its non-suability. The individual defendants, as officials/employees of the U.S. Air Force, were also immune from suit.

On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary injunction.

On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part as follows:

From the pleadings thus far presented to this Court by the parties, the Court's attention is called by the relationship between the plaintiffs as well as the
defendants, including the US Government in that prior to the bidding or solicitation in question, there was a binding contract between the plaintiffs as well
as the defendants, including the US Government. By virtue of said contract of concession, it is the Court's understanding that neither the US Government nor
the herein principal defendants would become the employer/s of the plaintiffs but that the latter are the employers themselves of the barbers, etc. with
the employer, the plaintiffs herein, remitting the stipulated percentage of commissions to the Philippine Area Exchange. The same circumstance would
become m effect when the Philippine Area Exchange opened for bidding or solicitation the questioned barber shop concessions. To this extent, therefore,
indeed a commercial transaction has been entered, and for purposes of the said solicitation, would necessarily be entered between the plaintiffs as well as
the defendants.

The Court, further, is of the view that Article XVIII of the RP-US Bases Agreement does not cover such kind of services falling under the concessionaireship,
such as a barber shop concession. 2

On December 11, 1986, following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we issued a temporary restraining order against
further proceedings in the court below. 3

In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony Lamachia, Wilfredo Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook
in the U.S. Air Force Recreation Center at the John Hay Air Station in Baguio City. It had been ascertained after investigation, from the testimony of Belsa, Cartalla and
Orascion, that Genove had poured urine into the soup stock used in cooking the vegetables served to the club customers. Lamachia, as club manager, suspended him and
thereafter referred the case to a board of arbitrators conformably to the collective bargaining agreement between the Center and its employees. The board unanimously found
him guilty and recommended his dismissal. This was effected on March 5, 1986, by Col. David C. Kimball, Commander of the 3rd Combat Support Group, PACAF Clark Air Force
Base. Genove's reaction was to file his complaint in the Regional Trial Court of Baguio City against the individual petitioners. 4

On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss the complaint, alleging that Lamachia, as an officer of the U.S. Air Force stationed
at John Hay Air Station, was immune from suit for the acts done by him in his official capacity. They argued that the suit was in effect against the United States, which had not
given its consent to be sued. Cdpr
This motion was denied by the respondent judge on June 4, 1987, in an order which read in part:

It is the understanding of the Court, based on the allegations of the complaint — which have been hypothetically admitted by defendants upon the filing of
their motion to dismiss — that although defendants acted initially in their official capacities, their going beyond what their functions called for brought them
out of the protective mantle of whatever immunities they may have had in the beginning. Thus, the allegation that the acts complained of were "illegal,"
done, with "extreme bad faith" and with "pre-conceived sinister plan to harass and finally dismiss" the plaintiff, gains significance. 5
The petitioners then came to this Court seeking certiorari and prohibition with preliminary injunction.

In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O'Donnell, an extension of Clark Air Base, was arrested following a buy-bust operation conducted
by the individual petitioners herein, namely, Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S. Air Force and special agents of the Air Force Office of
Special Investigators (AFOSI). On the basis of the sworn statements made by them, an information for violation of R.A. 6425, otherwise known as the Dangerous Drugs Act, was
filed against Bautista in the Regional Trial Court of Tarlac. The above-named officers testified against him at his trial. As a result of the filing of the charge, Bautista was
dismissed from his employment. He then filed a complaint for damages against the individual petitioners herein claiming that it was because of their acts that he was
removed. 6

During the period for filing of the answer, Mariano Y. Navarro, a special counsel assigned to the International Law Division, Office of the Staff Judge Advocate of Clark Air Base,
entered a special appearance for the defendants and moved for an extension within which to file an "answer and/or other pleadings." His reason was that the Attorney General
of the United States had not yet designated counsel to represent the defendants, who were being sued for their official acts. Within the extended period, the defendants,
without the assistance of counsel or authority from the U.S. Department of Justice, filed their answer. They alleged therein as affirmative defenses that they had only done
their duty in the enforcement of the laws of the Philippines inside the American bases pursuant to the RP-US Military Bases Agreement.

On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the defendants, filed with leave of court a motion to withdraw the answer and dismiss
the complaint. The ground invoked was that the defendants were acting in their official capacity when they did the acts complained of and that the complaint against them was
in effect a suit against the United States without its consent. prcd

The motion was denied by the respondent judge in his order dated September 11, 1987, which held that the claimed immunity under the Military Bases Agreement covered only
criminal and not civil cases. Moreover, the defendants had come under the jurisdiction of the court when they submitted their answer. 7
Following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we issued on October 14, 1987, a temporary restraining order. 8

In G.R. No. 80258, a complaint for damages was filed by the private respondents against the herein petitioners (except the United States of America), for injuries allegedly
sustained by the plaintiffs as a result of the acts of the defendants. 9 There is a conflict of factual allegations here. According to the plaintiffs, the defendants beat them up,
handcuffed them and unleashed dogs on them which bit them in several parts of their bodies and caused extensive injuries to them. The defendants deny this and claim the
plaintiffs were arrested for theft and were bitten by the dogs because they were struggling and resisting arrest. The defendants stress that the dogs were called off and the
plaintiffs were immediately taken to the medical center for treatment of their wounds.

In a motion to dismiss the complaint, the United States of America and the individually named defendants argued that the suit was in effect a suit against the United States,
which had not given its consent to be sued. The defendants were also immune from suit under the RP-US Bases Treaty for acts done by them in the performance of their official
functions.

The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading in part as follows:

The defendants certainly cannot correctly argue that they are immune from suit. The allegations, of the complaint which is sought to be dismissed, had to
be hypothetically admitted and whatever ground the defendants may have, had to be ventilated during the trial of the case on the merits. The complaint
alleged criminal acts against the individually-named defendants and from the nature of said acts it could not be said that they are Acts of State, for which
immunity should be invoked. If the Filipinos themselves are duty bound to respect, obey and submit themselves to the laws of the country, with more
reason, the members of the United States Armed Forces who are being treated as guests of this country should respect, obey and submit themselves to its
laws. 10

and so was the motion for reconsideration. The defendants submitted their answer as required but subsequently filed their petition for certiorari and prohibition with
preliminary injunction with this Court. We issued a temporary restraining order on October 27, 1987. 11
II
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. This latter provision merely reiterates a policy earlier embodied in the 1935 and
1973 Constitutionsand also intended to manifest our resolve to abide by the rules of the international community.

Even without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation. Under this doctrine, as
accepted by the majority of states, such principles are deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the society
of nations. Upon its admission to such society, the state is automatically obligated to comply with these principles in its relations with other states.

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." 12 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." 13

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. 14In 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 or it itself commences litigation.

The general law waiving the immunity of the state from suit is found in Act No. 3083, under which the Philippine government "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." In Merritt v. Government of the
Philippine Islands, 15 a special law was passed to enable a person to sue the government for an alleged tort. When the government enters into a contract, it is deemed to have
descended to the level of the other contracting party and divested of its sovereign immunity from suit with its implied consent. 16 Waiver is also implied when the government
files a complaint, thus opening itself to a counterclaim. 17

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. 18 We have held that
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. 19 As for the
filing of a complaint by the government, suability will result only where the government is claiming affirmative relief from the defendant. 20

In the case of the United States of America, the customary rule of international law on state immunity is expressed with more specificity in the RP-US Bases Treaty. Article III
thereof provides as follows:

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,
operation and defense thereof or appropriate for the control thereof and all the rights, power and authority within the limits of the territorial waters and air
space adjacent to, or in the vicinity of, the bases which are necessary to provide access to them or appropriate for their control.

The petitioners also rely heavily on Baer v. Tizon, 21 along with several other decisions, to support their position that they are not suable in the cases below, the United States
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. More specifically, insofar as alien armed forces is
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, speaking for the Court, 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 the ruling in Raquiza v. Bradford and cited in
support thereof excerpts from the works of the following authoritative writers: Vattel, Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair
and Lauterpacht. Accuracy demands the clarification that after the conclusion of the Philippine-American Military Bases Agreement, the treaty provisions
 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, where plaintiffs as lessors sued the Commanding General of the United States Army in
the Philippines, seeking the restoration to them of the apartment buildings they owned leased to the United States armed forces stationed in the Manila
area. A motion to dismiss on the ground of non-suability was filed and upheld by respondent Judge. The matter was taken to this Court in a mandamus
proceeding. It failed. 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.' Then came Marvel Building Corporation v.
Philippine War Damage Commission, where respondent, a United States Agency established to compensate damages suffered by the Philippines during World
War II was held as falling within the above doctrine as the suit against it `would eventually be a charge against or financial liability of the United States
Government because . . ., the Commission has no funds of its own for the purpose of paying money judgments.' The Syquia ruling was again explicitly relied
upon in Marquez Lim v. Nelson, involving a complaint for the recovery of a motor launch, plus damages, the special defense interposed being `that the
vessel belonged to the United States Government, that the defendants merely acted as agents of said Government, and that the United States Government is
therefore the real party in interest.' So it was in Philippine Alien Property Administration v. Castelo, where it was held that a suit against Alien Property
Custodian and the Attorney General of the United States involving vested property under the Trading with the Enemy Act is in substance a suit against the
United States. To the same effect is Parreno v. McGranery, as the following excerpt from the opinion of Justice Tuazon clearly shows: `It is a widely
accepted principle of international law, which is made a part of the law of the land (Article II, Section 3 of the Constitution), that a foreign state may not be
brought to suit before the courts of another state or its own courts without its consent.' Finally, there is Johnson v. Turner, an appeal by the defendant,
then Commanding General, Philippine Command (Air Force, with office at Clark Field) from a decision ordering the return to plaintiff of the confiscated
military payment certificates known as scrip money. In reversing the lower court decision, this Tribunal, through Justice Montemayor, relied on Syquia v.
Almeda Lopez, explaining why it could not be sustained. LLphil

It bears stressing at this point that the above observations do not confer on the United States of America 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 United States in the
discharge of their official functions.

There is no question that the United States of America, 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. This was our ruling in United
States of America v. Ruiz, 22 where the transaction in question dealt with the improvement of the wharves in the naval installation at Subic Bay. As this was a clearly
governmental function, we held that the contract did not operate to divest the United States of its sovereign immunity from suit. In the words of Justice Vicente Abad Santos:

The traditional rule of immunity exempts 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 now the rule in the United States, the United Kingdom and other states in Western Europe.

xxx xxx xxx

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. In this case the projects are an integral part of the naval base which is devoted to the defense of both the United States and the
Philippines, indisputably a function of the government of the highest order; they are not utilized for nor dedicated to commercial or business purposes.

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 United States. 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 United States of America, 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 United States itself is not involved. If found liable, they
and they alone must satisfy the judgment.
In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever, appropriated private land and converted it into public irrigation ditches. Sued for the
value of the lots invalidly taken by him, he moved to dismiss the complaint on the ground that the suit was in effect against the Philippine government, which had not given its
consent to be sued. This Court sustained the denial of the motion and held that the doctrine of state immunity was not applicable. The director was being sued in his private
capacity for a personal tort.
With these considerations in mind, we now proceed to resolve the cases at hand.

III
It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners therein were acting in the exercise of their official functions when they
conducted the buy-bust operation against the complainant and thereafter testified against him at his trial. The said petitioners were in fact connected with the Air Force Office
of Special Investigators and were charged precisely with the function of preventing the distribution, possession and use of prohibited drugs and prosecuting those guilty of such
acts. It cannot for a moment be imagined that they were acting in their private or unofficial capacity when they apprehended and later testified against the complainant. It
follows that for discharging their duties as agents of the United States, they cannot be directly impleaded for acts imputable to their principal, which has not given its consent
to be sued. As we observed in Sanders v. Veridiano: 24

Given the official character of the above-described letters, we have to conclude that the petitioners were, legally speaking, being sued as officers of the
United States government. As they have acted on behalf of that government, and within the scope of their authority, it is that government, and not the
petitioners personally, that is responsible for their acts.

The private respondent invokes Article 2180 of the Civil Code which holds the government liable if it acts through a special agent. The argument, it would seem, is premised on
the ground that since the officers are designated "special agents," the United States government should be liable for their torts.

There seems to be a failure to distinguish between suability and liability and a misconception that the two terms are synonymous. 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.

The said article establishes a rule of liability, not suability. The government may be held liable under this rule only if it first allows itself to be sued through any of the accepted
forms of consent.

Moreover, the agent performing his regular functions is not a special agent even if he is so denominated, as in the case at bar. No less important, the said provision appears to
regulate only the relations of the local state with its inhabitants and, hence, applies only to the Philippine government and not to foreign governments impleaded in our courts.

We reject the conclusion of the trial court that the answer filed by the special counsel of the Office of the Sheriff Judge Advocate of Clark Air Base was a submission by the
United States government to its jurisdiction. As we noted in Republic v. Purisima, 25 express waiver of immunity cannot be made by a mere counsel of the government but must
be effected through a duly-enacted statute. Neither does such answer come under the implied forms of consent as earlier discussed. Cdpr

But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the discharge of their official functions, we hesitate to make the same conclusion in
G.R. No. 80258. The contradictory factual allegations in this case deserve in our view a closer study of what actually happened to the plaintiffs. The record is too meager to
indicate if the defendants were really discharging their official duties or had actually exceeded their authority when the incident in question occurred. Lacking this information,
this Court cannot directly decide this case. The needed inquiry must first be made by the lower court so it may assess and resolve the conflicting claims of the parties on the
basis of the evidence that has yet to be presented at the trial. Only after it shall have determined in what capacity the petitioners were acting at the time of the incident in
question will this Court determine, if still necessary, if the doctrine of state immunity is applicable.

In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located at the U.S. Air Force Recreation Center, also known as the Open Mess Complex,
at John Hay Air Station. As manager of this complex, petitioner Lamachia is responsible for eleven diversified activities generating an annual income of $2 million. Under his
executive management are three service restaurants, a cafeteria, a bakery, a Class VI store, a coffee and pantry shop, a main cashier cage, an administrative office, and a
decentralized warehouse which maintains a stock level of $200,000.00 per month in resale items. He supervises 167 employees, one of whom was Genove, with whom the United
States government has concluded a collective bargaining agreement.

From these circumstances, the Court can assume that the restaurant services offered at the John Hay Air Station partake of the nature of a business enterprise undertaken by
the United States government in its proprietary capacity. Such services are not extended to the American servicemen for free as a perquisite of membership in the Armed Forces
of the United States. Neither does it appear that they are exclusively offered to these servicemen; on the contrary, it is well known that they are available to the general public
as well, including the tourists in Baguio City, many of whom make it a point to visit John Hay for this reason. All persons availing themselves of this facility pay for the privilege
like all other customers as in ordinary restaurants. Although the prices are concededly reasonable and relatively low, such services are undoubtedly operated for profit, as a
commercial and not a governmental activity.

The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to justify the dismissal of the damage suit against them by Genove. Such
defense will not prosper even if it be established that they were acting as agents of the United States when they investigated and later dismissed Genove. For that matter, not
even the United States government itself can claim such immunity. The reason is that by entering into the employment contract with Genove in the discharge of its proprietary
functions, it impliedly divested itself of its sovereign immunity from suit.

But these considerations notwithstanding, we hold that the complaint against the petitioners in the court below must still be dismissed. While suable, the petitioners are
nevertheless not liable. It is obvious that the claim for damages cannot be allowed on the strength of the evidence before us, which we have carefully examined.

The dismissal of the private respondent was decided upon only after a thorough investigation where it was established beyond doubt that he had polluted the soup stock with
urine. The investigation, in fact, did not stop there. Despite the definitive finding of Genove's guilt, the case was still referred to the board of arbitrators provided for in the
collective bargaining agreement. This board unanimously affirmed the findings of the investigators and recommended Genove's dismissal. There was nothing arbitrary about the
proceedings. The petitioners acted quite properly in terminating the private respondent's employment for his unbelievably nauseating act. It is surprising that he should still
have the temerity to file his complaint for damages after committing his utterly disgusting offense.

Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions granted by the United States government are commercial enterprises operated by
private persons. They are not agencies of the United States Armed Forces nor are their facilities demandable as a matter of right by the American servicemen. These
establishments provide for the grooming needs of their customers and offer not only the basic haircut and shave (as required in most military organizations) but such other
amenities as shampoo, massage, manicure and other similar indulgences. And all for a fee. Interestingly, one of the concessionaires, private respondent Valencia, was even sent
abroad to improve his tonsorial business, presumably for the benefit of his customers . No less significantly, if not more so, all the barbershop concessionaires are, under the
terms of their contracts, required to remit to the United States government fixed commissions in consideration of the exclusive concessions granted to them in their respective
areas.

This being the case, the petitioners cannot plead any immunity from the complaint filed by the private respondents in the court below. The contracts in question being
decidedly commercial, the conclusion reached in the United States of America v. Ruiz case cannot be applied here.

The Court would have directly resolved the claims against the defendants as we have done in G.R. No. 79470, except for the paucity of the record in the case at hand. The
evidence of the alleged irregularity in the grant of the barbershop concessions is not before us. This means that, as in G.R. No. 80258, the respondent court will have to receive
that evidence first, so it can later determine on the basis thereof if the plaintiffs are entitled to the relief they seek. Accordingly, this case must also be remanded to the court
below for further proceedings.

IV
There are a number of other cases now pending before us which also involve the question of the immunity of the United States from the jurisdiction of the Philippines. This is
cause for regret, indeed, as they mar the traditional friendship between two countries long allied in the cause of democracy. It is hoped that the so-called "irritants" in their
relations will be resolved in a spirit of mutual accommodation and respect, without the inconvenience and asperity of litigation and always with justice to both parties.

WHEREFORE, after considering all the above premises, the Court hereby renders judgment as follows:

1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is directed to proceed with the hearing and decision of Civil Case No. 4772. The temporary restraining
order dated December 11, 1986, is LIFTED.
2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298) is DISMISSED.
3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is DISMISSED. The temporary restraining order dated October 14, 1987, is made permanent.

4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is directed to proceed with the hearing and decision of Civil Case No. 4996. The temporary restraining
order dated October 27, 1987, is LIFTED. LibLex

All without any pronouncement as to costs.

SO ORDERED.

||| (United States of America v. Guinto, G.R. No. 76607, 79470, 80018, 80258, [February 26, 1990], 261 PHIL 777-802)
 [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.

Franciso A. Lava, Jr. and Andresito X. Fornier for petitioner.

SYLLABUS

1. POLITICAL LAW; IMMUNITY FROM SUIT; THE PHILIPPINE CONSTABULARY CHIEF AND THE PC-SUSIA MAY NOT BE SUED WITHOUT THE CONSENT OF THE STATE. — The State may
not be sued without its consent (Article XVI, Section 3, of the 1987 Constitution). Invoking this rule, the PC Chief and PC-SUSIA contend that, being instrumentalities of the
national government exercising a primarily governmental function of regulating the organization and operation of private detective, watchmen, or security guard agencies, said
official (the PC Chief) and agency (PC-SUSIA) may not be sued without the Government's consent, especially in this case because VMPSI's complaint seeks not only to compel the
public respondents to act in a certain way, but worse, because VMPSI seeks actual and compensatory damages in the sum of P1,000,000.00, exemplary damages in the same
amount, and P200,000.00 as attorney's fees from said public respondents. Even if its action prospers, the payment of its monetary claims may not be enforced because the State
did not consent to appropriate the necessary funds for that purpose.

2. ID.; ID.; PUBLIC OFFICIAL MAY BE SUED IN HIS PERSONAL CAPACITY IF HE ACTS, AMONG OTHERS BEYOND THE SCOPE OF HIS AUTHORITY; CASE AT BAR. — A public official may
sometimes be held liable in his personal or private capacity if he acts in bad faith, or beyond the scope of his authority or jurisdiction (Shauf vs. Court of Appeals, supra),
however, since the acts for which the PC Chief and PC-SUSIA are being called to account in this case, were performed by them as part of their official duties, without malice,
gross negligence, or bad faith, no recovery may be had against them in their private capacities.

3. ID.; ID.; CONSENT TO BE SUED MUST EMANATE FROM A LEGISLATIVE ACT. — Waiver of the State's immunity from suit, being a derogation of sovereignty, will not be lightly
inferred, but must be construed strictissimi juris (Republic vs. Feliciano, 148 SCRA 424). The consent of the State to be sued must emanate from statutory authority, hence,
from a legislative act, not from a mere memorandum. Without such consent, the trial court did not acquire jurisdiction over the public respondents.

4. ID.; ID.; REASONS BEHIND. — The state immunity doctrine rests upon reasons of public policy and the inconvenience and danger which would flow from a different rule. "It is
obvious that public service would be hindered, and public safety endangered, if the supreme authority could be subjected to suits at the instance of every citizen, and,
consequently, controlled in the use and disposition of the means required for the proper administration of the government" (Siren vs. U.S. Wall, 152, 19 L. ed. 129, as cited in 78
SCRA 477).

DECISION

GRIÑO-AQUINO, J p:

This is a petition for review on certiorari of the decision dated August 11, 1989, of the Court of Appeals in CA-G.R. SP No. 15990, entitled "The Chief of Philippine Constabulary
(PC) and Philippine Constabulary Supervisor Unit for Security and Investigation Agencies (PC-SUSIA) vs. Hon. Omar U. Amin and Veterans Manpower and Protective Services, Inc.
(VMPSI)," lifting the writ of preliminary injunction which the Regional Trial Court had issued to the PC-SUSIA enjoining them from committing acts that would result in the
cancellation or non-renewal of the license of VMPSI to operate as a security agency. Cdpr
On March 28, 1988, VMPSI filed a complaint in the Regional Trial Court at Makati, Metro Manila, praying the court to:

"A. Forthwith issue a temporary restraining order to preserve the status quo, enjoining the defendants, or any one acting in their place or stead, to refrain
from committing acts that would result in the cancellation or non-renewal of VMPSI's license;
 "B. In due time, issue a writ of preliminary injunction to the same effect;

"C. Render decision and judgment declaring null and void the amendment of Section 4 of R.A. No. 5487, by PD No. 11 exempting organizations like PADPAO
from the prohibition that no person shall organize or have an interest in more than one agency, declaring PADPAO as an illegal organization existing in
violation of said prohibition, without the illegal exemption provided in PD No. 11; declaring null and void Section 17 of R.A. No. 5487 which provides for the
issuance of rules and regulations in consultation with PADPAO, declaring null and void the February 1, 1982 directive of Col. Sabas V. Edadas, in the name of
the then PC Chief, requiring all private security agencies/security forces such as VMPSI to join PADPAO as a prerequisite to secure/renew their licenses,
declaring that VMPSI did not engage in 'cut-throat competition' in its contract with MWSS, ordering defendants PC Chief and PC-SUSIA to renew the license of
VMPSI; ordering the defendants to refrain from further harassing VMPSI and from threatening VMPSI with cancellations or non-renewal of license, without
legal and justifiable cause; ordering the defendants to pay to VMPSI the sum of P1,000,000.00 as actual and compensatory damages, P1,000,000.00 as
exemplary damages, and P200,000.00 as attorney's fees and expenses of litigation; and granting such further or other reliefs to VMPSI as may be deemed
lawful, equitable and just." (pp. 55-56, Rollo.)

The constitutionality of the following provisions of R.A. 5487 (otherwise known as the "Private Security Agency Law"), as amended, is questioned by VMPSI in its complaint: prLL

"SECTION 4. Who may Organize a Security or Watchman Agency. — Any Filipino citizen or a corporation, partnership, or association, with a minimum capital
of five thousand pesos, one hundred per cent of which is owned and controlled by Filipino citizens may organize a security or watchman agency: Provided,
That no person shall organize or have an interest in, more than one such agency except those which are already existing at the promulgation of this
Decree: . . ." (As amended by P.D. Nos. 11 and 100.)

"SECTION 17. Rules and Regulations by Chief, Philippine Constabulary. — The Chief of the Philippine Constabulary, in consultation with the Philippine
Association of Detective and Protective Agency Operators, Inc. and subject to the provision of existing laws, is hereby authorized to issue the rules and
regulations necessary to carry out the purpose of this Act."

VMPSI alleges that the above provisions of R.A. No. 5487 violate the provisions of the 1987 Constitution against monopolies, unfair competition and combinations in restraint of
trade, and tend to favor and institutionalize the Philippine Association of Detective and Protective Agency Operators, Inc. (PADPAO) which is monopolistic because it has an
interest in more than one security agency.

Respondent VMPSI likewise questions the validity of paragraph 3, subparagraph (g) of the Modifying Regulations on the Issuance of License to Operate and Private Security
Licenses and Specifying Regulations for the Operation of PADPAO issued by then PC Chief Lt. Gen. Fidel V. Ramos, through Col. Sabas V. Edades, requiring that "all private
security agencies/company security forces must register as members of any PADPAO Chapter organized within the Region where their main offices are located . . ." (pp. 5-6,
Complaint in Civil Case No. 88-471). As such membership requirement in PADPAO is compulsory in nature, it allegedly violates legal and constitutional provisions against
monopolies, unfair competition and combinations in restraint of trade. prcd

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
security service per day at P2,255.00 within Metro Manila and P2,215.00 outside of Metro Manila (Annex B, Petition).

On June 29, 1987, Odin Security Agency (Odin) filed a complaint with PADPAO accusing VMPSI of cut-throat competition by undercutting its contract rate for security services
rendered to the Metropolitan Waterworks and Sewerage System (MWSS), charging said customer lower than the standard minimum rates provided in the Memorandum of
Agreement dated May 12, 1986.

PADPAO found VMPSI guilty of cut-throat competition, hence, the PADPAO Committee on Discipline recommended the expulsion of VMPSI from PADPAO and the cancellation of
its license to operate a security agency (Annex D, Petition).

The PC-SUSIA made similar findings and likewise recommended the cancellation of VMPSI's license (Annex E, Petition).
As a result, PADPAO refused to issue a clearance/certificate of membership to VMPSI when it requested one.

VMPSI wrote the PC Chief on March 10, 1988, requesting him to set aside or disregard the findings of PADPAO and consider VMPSI's application for renewal of its license, even
without a certificate of membership from PADPAO (Annex F, Petition).

As the PC Chief did not reply, and VMPSI's license was expiring on March 31, 1988, VMPSI filed Civil Case No. 88-471 in the RTC-Makati, Branch 135, on March 28, 1988 against the
PC Chief and PC-SUSIA. On the same date, the court issued a restraining order enjoining the PC Chief and PC-SUSIA "from committing acts that would result in the cancellation or
non-renewal of VMPSI's license" (Annex G, Petition).
The PC chief and PC-SUSIA filed a "Motion to Dismiss, Opposition to the Issuance of Writ of Preliminary Injunction, and Motion to Quash the Temporary Restraining Order," on the
grounds that the case is against the State which had not given consent thereto and that VMPSI's license already expired on March 31, 1988, hence, the restraining order or
preliminary injunction would not serve any purpose because there was no more license to be cancelled (Annex H, Petition). Respondent VMPSI opposed the motion.

On April 18, 1988, the lower court denied VMPSI's application for a writ of preliminary injunction for being premature because it "has up to May 31, 1988 within which to file its
application for renewal pursuant to Section 2 (e) of Presidential Decree No. 199, . . ." (p. 140, Rollo.). prcd

On May 23, 1988, VMPSI reiterated its application for the issuance of a writ of preliminary injunction because PC-SUSIA had rejected payment of the penalty for its failure to
submit its application for renewal of its license and the requirements therefor within the prescribed period in Section 2(e) of the Revised Rules and Regulations
Implementing R.A. 5487, as amended by P.D. 1919 (Annex M, Petition).

On June 10, 1998, the RTC-Makati issued a writ of preliminary injunction upon a bond of P100,000.00, restraining the defendants, or any one acting in their behalf, from
cancelling or denying renewal of VMPSI's license, until further orders from the court.
The PC Chief and PC-SUSIA filed a Motion for Reconsideration of the above order, but it was denied by the court in its Order of August 10, 1988 (Annex R, Petition).

On November 3, 1988, the PC Chief and PC-SUSIA sought relief by a petition for certiorari in the Court of Appeals.

On August 11, 1989, the Court of Appeals granted the petition. The dispositive portion of its decision reads:

"WHEREFORE, the petition for certiorari filed by petitioners PC Chief and PC-SUSIA is hereby GRANTED, and the RTC-Makati, Branch 135, is ordered to
dismiss the complaint filed by respondent VMPSI in Civil Case No. 88-471, insofar as petitioners PC Chief and PC-SUSIA are concerned, for lack of jurisdiction.
The writ of preliminary injunction issued on June 10, 1988, is dissolved." (pp. 295-296, Rollo.)

VMPSI came to us with this petition for review.

The primary issue in this case is whether or not VMPSI's complaint against the PC Chief and PC-SUSIA is a suit against the State without its consent.
The answer is yes.

The State may not be sued without its consent (Article XVI, Section 3, of the 1987 Constitution). Invoking this rule, the PC Chief and PC-SUSIA contend that, being
instrumentalities of the national government exercising a primarily governmental function of regulating the organization and operation of private detective, watchmen, or
security guard agencies, said official (the PC Chief) and agency (PC-SUSIA) may not be sued without the Government's consent, especially in this case because VMPSI's complaint
seeks not only to compel the public respondents to act in a certain way, but worse, because VMPSI seeks actual and compensatory damages in the sum of P1,000,000.00,
exemplary damages in the same amount, and P200,000.00 as attorney's fees from said public respondents. Even if its action prospers, the payment of its monetary claims may
not be enforced because the State did not consent to appropriate the necessary funds for that purpose. cdll

Thus did we hold in Shauf vs. Court of Appeals, 191 SCRA 713:

"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." (Emphasis supplied.)

A public official may sometimes be held liable in his personal or private capacity if he acts in bad faith, or beyond the scope of his authority or jurisdiction (Shauf vs. Court of
Appeals, supra), however, since the acts for which the PC Chief and PC-SUSIA are being called to account in this case, were performed by them as part of their official duties,
without malice, gross negligence, or bad faith, no recovery may be had against them in their private capacities.
We agree with the observation of the Court of Appeals that the Memorandum of Agreement dated May 12, 1986 does not constitute an implied consent by the State to be sued:

"The Memorandum of Agreement dated May 12, 1986 was entered into by the PC Chief in relation to the exercise of a function sovereign in nature. The
correct test for the application of state immunity is not the conclusion of a contract by the State but the legal nature of the act. This was clearly
enunciated in the case of United States of America vs. Ruiz where the Hon. Supreme Court held:
 "'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 a business contract. It does not apply where the contract
relates to the exercise of its functions.' (136 SCRA 487, 492.)

"In the instant case, the Memorandum of Agreement entered into by the PC Chief and PADPAO was intended to professionalize the industry and to
standardize the salaries of security guards as well as the current rates of security services, clearly, a governmental function. The execution of the said
agreement is incidental to the purpose of R.A. 5487, as amended, which is to regulate the organization and operation of private detective, watchmen or
security guard agencies. (Emphasis Ours.)" (pp. 258-259, Rollo.)

Waiver of the State's immunity from suit, being a derogation of sovereignty, will not be lightly inferred, but must be construed strictissimi juris (Republic vs. Feliciano, 148
SCRA 424). The consent of the State to be sued must emanate from statutory authority, hence, from a legislative act, not from a mere memorandum. Without such consent, the
trial court did not acquire jurisdiction over the public respondents.

The state immunity doctrine rests upon reasons of public policy and the inconvenience and danger which would flow from a different rule. "It is obvious that public service
would be hindered, and public safety endangered, if the supreme authority could be subjected to suits at the instance of every citizen, and, consequently, controlled in the use
and disposition of the means required for the proper administration of the government" (Siren vs. U.S. Wall, 152, 19 L. ed. 129, as cited in 78 SCRA 477). In the same vein, this
Court in Republic vs. Purisima (78 SCRA 470, 473) rationalized:

"Nonetheless, a continued adherence to the doctrine of nonsuability is not to be deplored for as against the inconvenience that may be cause [by] private
parties, the loss of governmental efficiency and the obstacle to the performance of its multifarious functions are far greater if such a fundamental principle
were abandoned and the availability of judicial remedy were not thus restricted. With the well known propensity on the part of our people to go to court, at
the least provocation, the loss of time and energy required to defend against law suits, in the absence of such a basic principle that constitutes such an
effective obstacles, could very well be imagined." (citing Providence Washington Insurance Co. vs. Republic, 29 SCRA 598.) LexLib
WHEREFORE, the petition for review is DENIED and the judgment appealed from is AFFIRMED in toto. No costs.

SO ORDERED.

||| (Veterans Manpower and Protective Services, Inc. v. Court of Appeals, G.R. No. 91359, [September 25, 1992], 288 PHIL 1067-1075)
 G.R. No. 11154. March 21, 1916.]

E. MERRITT, plaintiff-appellant, vs. GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.

Crossfield & O'Brien for plaintiff.

Attorney-General Avanceña for defendant.

SYLLABUS

1. DAMAGES; MEASURE OF. — Where the evidence shows that the plaintiff was wholly incapacitated for six months it is an error to restrict the damages to a shorter
period during which he was confined in the hospital.
2. SPECIAL STATUTES; CONSENT OF THE STATE TO BE SUED; CONSTRUCTION. — The Government of the Philippine Islands having been "modeled after the federal
and state governments of the United States' the decisions of the high courts of that country may be used in determining the scope and purpose of a special statute.
3. ID.; ID.; ID. — The state not being liable to suit except by its express consent, an act abrogating that immunity will be strictly construed.
4. ID.; ID.; ID. — An act permitting a suit against the state gives rise to no liability not previously existing unless it is clearly expressed in the act.
5. GOVERNMENT OF THE PHILIPPINE ISLANDS; LIABILITY FOR THE NEGLIGENT ACTS OF ITS OFFICERS, AGENTS, AND EMPLOYEES. — The Government of the Philippine
Islands in only liable for the negligent acts of its officers, agents, and employees when they are acting as special agents within the meaning of paragraph 5 of article 1903 of
the Civil code, and a chauffeur of the General Hospital is not such a special agent.

DECISION

TRENT, J p:

This is an appeal by both partied from a judgment of the Court of First Instance of the city of Manila in favor of the plaintiff for the sum of P14,741, together with
the costs of the cause.
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages which the plaintiff suffered to P5,000, instead of P25,000 as claimed in
the complaint," and (2) "in limiting the time when plaintiff was entirely disabled to two months and twenty-one days and fixing the damage accordingly in the sum of
P2,666, instead of P6,000 as claimed by plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding that the collision between the plaintiff's motorcycle and the
ambulance of the General Hospital was due to the negligence of the chauffeur; (b) in holding that the Government of the Philippine Islands is liable for the damages
sustained by the plaintiff as a result of the collision, even if it be true that collision was due to the negligence of the chauffeur; and (c) in rendering judgment against the
defendant for the sum of P14,741.
The trial court's findings of fact, which are fully supported by the record, are as follows:
"It is a fact not disputed by counsel for the defendant that 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 twelve miles and hour, upon crossing Taft Avenue and when he was ten feet from the
southwestern intersection of said streets, the General Hospital ambulance, upon reaching said avenue, instead of turning toward the south, after passing the
center thereof, so that it would be on the left side of said avenue, as is prescribed by the ordinance 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, without having 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 placed 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 taken to the General Hospital, he was suffering from a depression in the left parietal region, a wound in the same place and in beck part of his
head, while blood issued from his nose and he was entirely unconscious.
"The marks revealed that he had one or more fractures of the skull and that the grey matter and brain mass had suffered material injury. At ten
o'clock of the night in question, which was the time set for performing the operation, his pulse was so weak and so irregular that, in his opinion, there was
little hope that he would live. His right leg was broken in such a way that the fracture extended to the outer skin in such manner that it might be regarded
as double and the wound would be expose to infection, for which reason it was of the most serious nature.
"At another examination six days before the day of the trial, Dr. Saleeby notice that the plaintiff's leg showed a contraction of an inch and a half
and a curvature that made his leg very weak and painful at the point of the fracture. Examination of his head revealed a notable re-adjustment of the
functions of the brain and nerves. The patient apparently was slightly deaf, had a slight weakness in his eyes and in his mental condition. This latter
weakness was always noticed when the plaintiff had to do any difficult mental labor, especially when he attempted to use his memory for mathematical
calculations.
"According to the various merchants who testified as witnesses, the plaintiff's mental and physical condition prior to the accident was excellent,
and that after having received the injuries that have been discussed, his physical condition had undergone a noticeable depreciation, for he had lost the
agility, energy, and ability that he had constantly displayed before the accident as one of the best constructors of wooden buildings and he could not now
earn even a half of the income that he had secured for his work because he had lost 50 per cent of his efficiency. As a contractor, he could no longer, as he
had before done, climb up ladders and scaffoldings to reach the highest parts of the building.
"As a consequence of the loss the plaintiff suffered in the efficiency of his work as a contractor, he had to dissolve the partnership he had formed
with the engineer, Wilson, because he was incapacitated from making mathematical calculations on account of the condition of his leg and of his mental
faculties, and he had to give up a contract he had for the construction of the Uy Chaco building."
We may say at the outset that we are in full accord with the trial court to the effect that the collision between the plaintiff's motorcycle and the ambulance of the
General Hospital was due solely to the negligence of the chauffeur.
The two items which constitute a part of the P14,741 and which are drawn in question by the plaintiff are (a) P5,000, the amount awarded for permanent injuries,
and (b) the P2,666, the amount allowed for the loss of wages during the time the plaintiff was incapacitated from pursuing his occupation. We fund nothing in the record
which would justify us in increasing the amount of the first. as to the second, the record shows, and the trial court so found, that the plaintiff's services as a contractor
were worth P1,000 per month. The court, however, limited the time to two months and twenty-one days, which the plaintiff was actually confined in the hospital. In this
we think there was error, because it was clearly established that the plaintiff was wholly incapacitated for a period of sex months. The mere fact that he remained in the
hospital only two months and twenty-one days while the remainder of the six months was spent in his home, would not prevent recovery for the whole time. We, therefore,
find that the amount of damages sustained by the plaintiff, without any fault on his part, is P18,075.
As the negligence which caused the collision is a tort committed by an agent or employee of the Government, the inquiry at once arises whether the Government is
legally liable for the damages resulting therefrom.
Act No. 2457, effective February 3, 1915, reads:
"An act authorizing E. Merritt to bring suit against the Government of the Philippine Islands and authorizing the Attorney-General of said Islands to
appear in said suit.
"Whereas a claim has been filed against the Government of the Philippine Islands by Mr. E. Merritt, of Manila, for damages resulting from a collision
between his motorcycle and the ambulance of the General Hospital on March twenty-fifth, nineteen hundred and thirteen;
"Whereas it is not known who is responsible for the accident nor is it possible to determine the amount of damages, if any , to which the claimant is
entitled; and
"Whereas the Director of Public Works and the Attorney-General recommend that an act be passed by the Legislature authorizing Mr. E. Merritt to
bring suit in the courts against the Government, in order that said questions may be decided: Now, therefore,
"By authority of the United States, be it enacted by the Philippine Legislature, that:
"SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of the city of Manila against the Government of the Philippine
Islands in order to fix the responsibility for the collision between his motorcycle and the ambulance of the General Hospital, and to determine the amount of
 the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, and the attorney-General of the Philippine Islands is hereby authorized
and directed to appear at the trial on the behalf of the Government of said Islands, to defend said Government at the same.
"SEC. 2. This Act shall take effect on its passage.
"Enacted, February 3, 1915."
Did the defendant, in enacting the above quoted act, simply waive its immunity from suit or did it also concede its liability to the plaintiff? If only the former, then
it cannot be held that the Act created any new cause of action in favor of the plaintiff or extended the defendant's liability to any case not previously recognized.
All admit that the Insular Government (the defendant) cannot be sued by an individual without its consent. It is also admitted that the instant case is one against
the Government. As the consent of the Government to be sued by the plaintiff was entirely voluntary on its part, it is our duty to look carefully into the terms of the
consent, and render judgment accordingly.

The plaintiff was authorized to bring this action against the Government "in order to fix the responsibility for the collision between his motorcycle and the
ambulance of the General Hospital and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, . . . ." These were
the two questions submitted to the court for determination. The Act was passed "in order that said questions may be decided." We have "decided" that the accident was due
solely to the negligence of the chauffeur, who was at the time an employee of the defendant, and we have also fixed the amount of damages sustained by the plaintiff as a
result of the collision. Does the Act authorize us to hold that the Government is legally liable for that amount? If not, we must look elsewhere for such authority, if it exists.
The Government of the Philippine Islands having been "modeled after the Federal and state Governments in the United States," we may look to the decisions of the
high courts of that country for aid in determining the purpose and scope of Act No. 2457.
In the United States the rule that the state is not liable for the torts committed by its officers or agents whom it employs, except when expressly made so by
legislative enactment, is well settled. "The Government," says Justice Story, "does not undertake to guarantee to any person the fidelity of the officers or agents whom it
employs, since that would involve it in all its operations in endless embarrassments, difficulties and losses, which would be subversive of the public interest."
(Claussen vs. City of Luverne, 103 Minn., 491, citing U.S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and Beers vs. State, 20 How., 527; 15 L. Ed., 991.)
In the case of Melvin vs. State ( 121 Cal., 16), the plaintiff sought to recover damages from the state for personal injuries received on account of the negligence of
the state officers at the state fair, a state institution created by the legislature for the purpose of improving agricultural and kindred industries; to disseminate information
calculated to educate and benefit the industrial classes; and to advance to educate and benefit the industrial classes; and to advance by such means the material interests
of the state, being objects similar to those sought by the public school system. In passing upon the question of the state's liability for the negligent acts of its officers or
agents, the court said:
"No claim arises against any government in favor of an individual, by reason of the misfeasance, laces, or unauthorized exercise of powers by its
officers or agents." (Citing Gibbons vs. U.S., 8 Wall., 269; Clodfelter vs. State, 86 N.C., 51, 53; 41 Am. Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am.
St. Rep., 158; Green vs. State, 73 Cal., 29; Bourn vs.Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency, sec. 319.)
As to the scope of legislative enactments permitting individuals to sue the state where the cause of action arises out of either tort or contract, the rule is stated in
36 Cyc., 915, thus:
"By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its liability to plaintiff, or create any cause of
action in his favor, or extend its liability to any cause not previously recognized. It merely gives a remedy to enforce a preexisting liability and submits itself
to the jurisdiction of the court, subject to its right to interpose any lawful defense."
In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of 1913, which authorized the bringing of this suit, read:
"SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit, Waukesha County, Wisconsin, to bring suit in such court or
courts and in such form or forms as he may be advised for the purpose of settling and determining all controversies which he may now have with the State of
Wisconsin, or its duly authorizes officers and agents, relative to the mill property of said George Apfelbacher, the fish hatchery of the State Wisconsin on the
Bark River, and the mill property of Evan Humphrey at the lower end of Nagawicka Lake, and relative to the use of the waters of said Bark River and
Nagawicka Lake, all in the county of Waukesha, Wisconsin."
In determining the scope of this act, the court said;
"Plaintiff claims that by the enactment of this law the legislature admitted liability on the part of the state for the acts of its officers, and that the
suit now stands just as it would stand between private parties. It is difficult to see how the act does, or was intended to do, more than remove the state's
immunity from suit. It simply gives authority commence suit for the purpose of settling plaintiff's controversies with the state. Nowhere in the act is there a
 whisper or suggestion that the court or courts in the disposition of the suit shall depart from well established principles of law, or that the amount of
damages is the only question to be settled. The act opened the door of the court to the plaintiff. It did not pass upon the question of liability, but left the
suit just where it would be in the absence of the state's immunity from suit. If the Legislature had intended to change the rule that obtained in this state so
long and to declare liability on the part of the state, it would not have left so important a matter to mere inference but would have done so in express
terms. (Murdoc Grate Co. vs. Commonwealth, 152 Mass., 28; 24 N. E., 854; 8 L. R.A., 399)"
In Denning vs. state (123 Cal., 316), the provisions of the Act of 1893, relied upon and considered, are as follows:
"All persons who have, or shall hereafter have claims on contract or for negligence against the state not allowed by the state board of examiners,
are hereby authorized, on the terms and conditions herein contained, to bring suit thereon against the state in any of the courts of this state of competent
jurisdiction, and prosecute the same to final judgment. The rules of practice in civil cases shall apply to such suits, except as herein otherwise provided."
And the court said:
"This statute has been considered by this court in at least two cases, arising under different facts, and in both it was held that said statute did not
create any liability or cause of action against the state where none existed before, but merely gave an additional remedy to enforce such liability as would
have existed if the statute had not been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs. State, 121 Cal., 16.)"
A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims against the commonwealth, whether at law or in equity," with an
exception not necessary to be here mentioned. In construing this statute the court, in Murdock Grate Co. vs. Commonwealth (152 Mass., 28), said:
"The statute we are discussing discloses no intention to create against the state a new and heretofore unrecognized class of liabilities, but only an
intention to provide a judicial tribunal where well recognized existing liabilities can be adjudicated."
In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the statute of New York, jurisdiction of claims for damages for injuries
in the management of the canals such as the plaintiff had sustained, Chief Justice Ruger remarks; "It must be conceded
that the state can be made liable for injuries arising from the negligence of its agents or servants, only by force of some positive statute assuming such liability."
It being quite clear that Act No. 2457 does not operate to extend the Government's liability to any cause not previously recognized, we will now examine the
substantive law touching the defendant's liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of article 1903 of the civil Code reads:
"The state is liable in this sense when it acts through a special agent, but not when the damage should have been caused by the official to whom
properly it pertained to do the act performed, in which case the provisions of the preceding article shall be applicable."
The supreme court of Spain in defining the scope of this paragraph said:
"That the obligation to indemnify for damages which a third person causes another by his fault or negligence is based, as is evidenced by the same
Law 3, Title 15, Partida 7, on that the person obligated, by his own fault or negligence, takes part in the act or omission of the third party who caused the
damage. It follows therefrom that the state by virtue of such provision of law, is not responsible for the damages suffered by private individuals in
consequence of acts performed by its employees in the discharge of the functions pertaining to their office, because neither fault nor even negligence can
be presumed on the part of the state in the organization of branches of the public service and in the appointment of its agents; on the contrary, we must
presuppose all foresight humanly possible on its part in order that each branch of service serves the general weal and that of private persons interested in its
operation. Between these latter and the state therefore, no relations of a private nature governed by the civil law can arise except in a case where the state
acts as a judicial person capable of acquiring rights and contracting obligations." (Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)
"That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out of fault or negligence; and whereas in the first articles
thereof, No. 1902, where the general principle is laid down that where a person who by an act or omission causes damage to another through fault or
negligence, shall be obliged to repair the damage so done, reference is made to acts or omissions of the persons who directly or indirectly cause the
damage, the following article refers to third persons and imposes an identical obligation upon those who maintain fixed relations of authority and superiority
over the authors of the damage, because the law presumes that in consequence of such relations the evil caused by their own fault or negligence is
imputable to them. This legal presumption gives way to proof, however, because, as held in the last paragraph of article 1903, responsibility for acts of third
persons ceases when the persons mentioned in said article prove that they employed all the diligence of a good father of a family to avoid the damage, and
among these persons, called up[on to answer in a direct and not a subsidiary manner, are found, in addition to the mother or the father in a proper case,
guardians and owners or director of an establishment or enterprise, the state, but not always, except when it acts through the agency of a special agent,
doubtless because and only in this case, the fault or negligence, which is the original basis of this kind of objections, must be presumed to lie with the state.
 "That although in some cases the state might by virtue of the general principle set forth in article 1902 respond for all the damage that is
occasioned to private parties by orders or resolutions which by fault or negligence are made by branches of the central administration acting in the name
and representation of the state itself and as an external expression of its sovereignty in the exercise of its executive powers, yet said article is not
applicable in the case of damages said to have been occasioned to the petitioners by an executive official, acting in the exercise of his powers, in
proceedings to enforce the collections of certain property taxes owing by the owner of the property which they hold in sublease.
"That the responsibility of the state is limited by article 1903 to the case wherein it acts through a special agent (and a special agent, in the sense in which these
words are employed, is one who receives a definite and fixed order or commission, foreign to the exercise of the duties of his office if he is a special official) so that in
representation of the state and being bound to act as an agent thereof he executed the trust confided to him. this concept does not apply to any executive agent who is an
employee of the active administration and who in his own responsibility performs the functions which are inherent in and naturally pertain to his office and which are
regulated by law and the regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)
"That according to paragraph 5 of article 1903 of the Civil Code and the principle laid down in a decision, among others, of the 18th of May, 1904, in
a damage case, the responsibility of the state is limited to that which it contracts through a special agent, duly empowered by a definite order or
commission to perform some act or charged with some definite purpose which gives rise to the claim, and not where the claim is based on acts or omissions
imputable to a public official charge with some administrative or technical office who can be held to the proper responsibility in the manner laid down by
the law of civil responsibility. Consequently, the trial court in not so deciding and in sentencing the said entity to the payment of damages, caused by an
official of the second class referred to, has by erroneous interpretation infringed the provisions of articles 1902 and 1903 of the Civil Code." (Supreme Court
of Spain, July 30, 1911; 122 Jur. Civ., 146)
It is, therefore, evident that the State (the Government of the Philippine Islands) is only 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.
For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance. Whether the Government intends to make itself legally
liable for the amount of damages above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, by legislative enactment and by
appropriating sufficient funds therefor, we are not called upon to determine. This matter rests solely with the Legislature and not with the courts.
||| (Merritt v. Government of the Philippine Islands, G.R. No. 11154, [March 21, 1916], 34 PHIL 311-323)
 [G.R. No. L-26400. February 29, 1972.]

VICTORIA AMIGABLE, plaintiff-appellant, vs. NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE PHILIPPINES, defendants-
appellees.

Quirico del Mar, Domingo Antigua, Antonio Paulin and N. Capangpangan for plaintiff and appellant.
Assistant Solicitor General Guillermo Torres and Solicitor Dominador L. Quiroz for defendants and appellees.

SYLLABUS

1. POLITICAL LAW; EMINENT DOMAIN; PROJECT USED BY GOVERNMENT FOR ROAD PURPOSES; RIGHTS OR REGISTERED OWNER TO DUE COMPENSATION ANYTIME. —
Considering that no annotation in favor of the government appears at the back of her certificate of title and that she has not executed any deed of conveyance of any portion
of her lot to the government, the appellant remains the owner of the whole lot. As registered owner, she could bring an action to recover possession of the portion of land in
question at anytime because possession is one of the attributes of ownership. However, since restoration of possession of said portion by the government is neither convenient
nor feasible at this time because it has been and is now being used for road purposes, the only relief available is for the government to make due compensation which it could
and should have done years ago.
2. ID.; ID.; ID.; ID.; RIGHT TO DAMAGES. — The owner of the land is entitled to damages in the form of legal interest on the price of the land from the time it was
taken up to the time that payment is made by the government. In addition, the government should pay for attorney's fees, the amount of which should be fixed by the trial
court after hearing.
3. ID.; ID.; BASIS FOR DUE COMPENSATION. — To determine the due compensation for the land appropriated by the Government, the basis should be the price or
value thereof at the time of the taking.

DECISION

MAKALINTAL, J p:

This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No. R-5977, dismissing the plaintiff's complaint.
Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad Estate in Cebu City as shown by Transfer Certificate of Title No. T-
18060, which superseded Transfer Certificate of Title No. RT-3272 (T-3435) issued to her by the Register of Deeds of Cebu on February 1, 1924. No annotation in favor of the
government of any right or interest in the property appears at the back of the certificate. Without prior expropriation or negotiated sale, the government used a portion of
said lot, with an area of 6,167 square meters, for the construction of the Mango and Gorordo Avenues.
It appears that said avenues were already existing in 1921 although "they were in bad condition and very narrow, unlike the wide and beautiful avenues that they are now,"
and "that the tracing of said roads was begun in 1924, and the formal construction in 1925." *
On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting payment of the portion of her lot which had been appropriated by the
government. The claim was indorsed to the Auditor General, who disallowed it in his 9th Indorsement dated December 9, 1958. A copy of said indorsement was transmitted
to Amigable's counsel by the Office of the President on January 7, 1959.
On February 6, 1959 Amigable filed in the court a quo a complaint, which was later amended on April 17, 1959 upon motion of the defendants, against the Republic
of the Philippines and Nicolas Cuenca, in his capacity as Commissioner of Public Highways for the recovery of ownership and possession of the 6,167 square meters of land
 traversed by the Mango and Gorordo Avenues. She also sought the payment of compensatory damages in the sum of P50,000.00 for the illegal occupation of her land, moral
damages in the sum of P25,000.00, attorney's fees in the sum of P5,000.00 and the costs of the suit.
Within the reglementary period the defendants filed a joint answer denying the material allegations of the complaint and interposing the following affirmative
defenses, to wit: (1) that the action was premature, the claim not having been filed first with the Office of the Auditor General; (2) that the right of action for the recovery
of any amount which might be due the plaintiff, if any, had already prescribed; (3) that the action being a suit against the Government, the claim for moral damages,
attorney's fees and costs had no valid basis since as to these items the Government had not given its consent to be sued; and (4) that inasmuch as it was the province of Cebu
that appropriated and used the area involved in the construction of Mango Avenue, plaintiff had no cause of action against the defendants.
During the scheduled hearings nobody appeared for the defendants notwithstanding due notice, so the trial court proceeded to receive the plaintiff's evidence ex
parte. On July 29, 1959 said court rendered its decision holding that it had no jurisdiction over the plaintiff's cause of action for the recovery of possession and ownership of
the portion of her lot in question on the ground that the government cannot be sued without its consent; that it had neither original nor appellate jurisdiction to hear, try
and decide plaintiff's claim for compensatory damages in the sum of P50,000.00, the same being a money claim against the government; and that the claim for moral damages
had long prescribed, nor did it have jurisdiction over said claim because the government had not given its consent to be sued. Accordingly, the complaint was dismissed.
Unable to secure a reconsideration, the plaintiff appealed to the Court of Appeals, which subsequently certified the case to Us, there being no question of fact involved.
The issue here is whether or not the appellant may properly sue the government under the facts of the case.
In the case of Ministerio vs. Court of First Instance of Cebu, 1 involving a claim for payment of the value of a portion of land used for the widening of the Gorordo
Avenue in Cebu City, this Court, through Mr. Justice Enrique M. Fernando, held that where the government takes away property from a private landowner for public use
without going through the legal process of expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the government without thereby violating
the doctrine of governmental immunity from suit without its consent. We there said:
". . . If the constitutional mandate that the owner be compensated for property taken for public use were to be respected, as it should, then
a suit of this character should not be summarily dismissed. 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 sad 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 is just as important, if not more
so, that there be fidelity to legal norms on the part of 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."

Considering that no annotation in favor of the government appears at the back of her certificate of title and that she has not executed any deed of conveyance of
any portion of her lot to the government, the appellant remains the owner of the whole lot. As registered owner, she could bring an action to recover possession of the portion
of land in question at anytime because possession is one of the attributes of ownership. However, since restoration of possession of said portion by the government is neither
convenient nor feasible at this time because it is now and has been used for road purposes, the only relief available is for the government to make due compensation which
it could and should have done years ago. To determine the due compensation for the land, the basis should be the price or value thereof at the time of the taking. 2
As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the price of the land from the time it was taken up to the time that
payment is made by the government. 3 In addition, the government should pay for attorney's fees, the amount of which should be fixed by the trial court after hearing.
WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the court a quo for the determination of compensation, including attorney's
fees, to which the appellant is entitled as above indicated. No pronouncement as to costs.
||| (Amigable v. Cuenca, G.R. No. L-26400, [February 29, 1972], 150 PHIL 422-427)
 [G.R. No. 90478. November 21, 1991.]

REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT), petitioner, vs. SANDIGANBAYAN, BIENVENIDO R. TANTOCO, JR.
and DOMINADOR R. SANTIAGO, respondents.

Dominador R. Santiago for and in his own behalf and as counsel for respondent Tantoco, Jr.

SYLLABUS

1. REMEDIAL LAW; COURTS; RAISON D'ETRE. — The resolution of controversies is, as everyone knows, the raison d'etre of courts. This essential function is accomplished by first,
the ascertainment of all the material and relevant facts from the pleadings and from the evidence adduced by the parties, and second, after that determination of the facts has
been completed, by the application of the law thereto to the end that the controversy may be settled authoritatively, definitely and finally.

2. ID.; ACTIONS; NATURE AND OBJECT OF LITIGATIONS. — Seventy-one years ago, in Alonso v. Villamor, this Court described the nature and object of litigation and in the
process laid down the standards by which judicial contests are to be conducted in this jurisdiction. It said: "A litigation is not a game of technicalities in which one, more deeply
schooled and skilled in the subtle art of movement and position, entraps and destroys the other. It is, rather a contest in which each contending party fully and fairly lays
before the court the facts in issue and then brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done
on the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance
and chief enemy, deserves scant consideration from courts. There should be no vested right in technicalities. . . ."

3. ID.; ID.; PLEADINGS; ULTIMATE FACTS MUST BE CONTAINED THEREIN. — Every pleading "shall contain in a methodical and logical form, a plain, concise and direct statement of
the ultimate facts on which the party pleading relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts."

4. ID.; ID.; ID.; BILL OF PARTICULARS, RESORTED TO IF ULTIMATE FACTS ALLEGED ARE TOO GENERAL. — Parenthetically, if this requirement is not observed, i.e., the ultimate
facts are alleged too generally or "not averred with sufficient definiteness or particularity to enable . . . (an adverse party) properly to prepare his responsive pleading or to
prepare for trial," a bill of particulars seeking a "more definite statement" may be ordered by the court on motion of a party. The office of a bill of particulars is, however,
limited to making more particular or definite the ultimate facts in a pleading. It is not its office to supply evidentiary matters. And the common perception is that said
evidentiary details are made known to the parties and the court only during the trial, when proof is adduced on the issues of fact arising from the pleadings.

5. ID.; ID.; PARTIES SHOULD DISCOVER OR INFORM THEMSELVES OF ALL THE FACTS RELEVANT TO THE ACTION; MADE POSSIBLE THROUGH THE DEPOSITION-DISCOVERY MECHANISM
SET FORTH IN RULES 24 TO 29 OF THE RULES OF COURT. — The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial. Indeed, it is
the purpose and policy of the law that the parties — before the trial if not indeed even before the pre-trial — should discover or inform themselves of all the facts relevant to
the action, not only those known to them individually, but also those known to their adversaries; in other words, the desideratum is that civil trials should not be carried on in
the dark; and the Rules of Court make this ideal possible through the deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been
that ample discovery before trial, under proper regulation, accomplished one of the most necessary ends of modern procedure: it not only eliminates unessential issues from
trials thereby shortening them considerably, but also requires parties to play the game with the cards on the table so that the possibility of fair settlement before trial is
measurably increased."

6. ID.; ID.; MODES OF DISCOVERY; PURPOSE. — The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20,
to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable the
parties, consistent with recognized privileges, to obtain the fullest possible knowledge of the issues and facts before civil trials and thus prevent that said trials are carried on in
the dark.
7. ID.; ID.; ID.; FIELD OF INQUIRY. — To this end, the field of inquiry that may be covered by depositions or interrogatories is as broad as when the interrogated party is called as
a witness to testify orally at trial. The inquiry extends to all facts which are relevant, whether they be ultimate or evidentiary, excepting only those matters which are
privileged. The objective is as much to give every party the fullest possible information of all the relevant facts before the trial as to obtain evidence for use upon said trial. The
principle is reflected in Section 2, Rule 24 (governing depositions) of the Revised Rules of Court.
8. ID.; ID.; ID.; ACCORDED A BROAD AND LIBERAL TREATMENT AND AVAILABLE TO BOTH PARTIES. — What is chiefly contemplated is the discovery of every bit of information
which may be useful in the preparation for trial, such as the identity and location of persons having knowledge of relevant facts; those relevant facts themselves; and the
existence, description, nature, custody, condition, and location of any books, documents, or other tangible things. Hence, "the deposition-discovery rules are to be accorded a
broad and liberal treatment. No longer can the time-honored cry of 'fishing expedition' serve to preclude a party from inquiring into the facts underlying his opponent's case.
Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts
he has in his possession. The deposition-discovery procedure simply advances the stage at which the disclosure can be compelled from the time of trial to the period preceding
it, thus reducing the possibility of surprise."

9. ID.; ID.; ID.; ID.; MAY BE AVAILED OF WITHOUT LEAVE OF COURT AND GENERALLY WITHOUT COURT INTERVENTION. — In line with this principle of according liberal treatment
to the deposition-discovery mechanism, such modes of discovery as (a) depositions (whether by oral examination or written interrogatories) under Rule 24, (b) interrogatories to
parties under Rule 25, and (c) requests for admissions under Rule 26, may be availed of without leave of court, and generally, without court intervention.

10. ID.; ID.; ID.; ID.; ID.; EXCEPTION. — The Rules of Court explicitly provide that leave of court is not necessary to avail of said modes of discovery after an answer to the
complaint has been served. It is only when an answer has not yet been filed (but after jurisdiction has been obtained over the defendant or property subject of the action) that
prior leave of court is needed to avail of these modes of discovery, the reason being that at that time the issues are not yet joined and the disputed facts are not clear. On the
other hand, leave of court is required as regards discovery by (a) production or inspection of documents or things in accordance with Rule 27, or (b) physical and mental
examination of persons under Rule 28, which may be granted upon due application and a showing of due cause.

11. ID.; ID.; ID.; LIMITATIONS. — Of course, there are limitations to discovery, even when permitted to be undertaken without leave and without judicial intervention. "As
indicated by (the) Rules . . ., limitations inevitably arise when it can be shown that the examination is being conducted in bad faith or in such a manner as to annoy, embarrass,
or oppress the person subject to the inquiry. And . . . further limitations come into existence when the inquiry touches upon the irrelevant or encroaches upon the recognized
domains of privilege" In fine, the liberty of a party to make discovery is well nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the
inquiry is made in good faith and within the bounds of the law.

12. ID.; ID.; ID.; INTERROGATORIES; MAY BE AVAILED OF WITHOUT LEAVE OF COURT AFTER ANSWER HAD BEEN SERVED; LEAVE OF COURT NECESSARY BEFORE FILING OF ANSWER.
— It should initially be pointed out — as regards the private respondents "Motion for Leave to File Interrogatories" dated February 1, 1988 — that it was correct for them to seek
leave to serve interrogatories, because discovery was being availed of before an answer had been served. In such a situation, i.e., "after jurisdiction has been obtained over any
defendant or over property subject of the action" but before answer, Section 1 of Rule 24 (treating of depositions), in relation to Section 1 of Rule 25 (dealing with
interrogatories to parties) explicitly requires "leave of court." But there was no need for the private respondents to seek such leave to serve their "Amended Interrogatories to
Plaintiffs (dated August 2, 1989) after they had filed their answer to the PCGG's complaint, just as there was no need for the Sandiganbayan to act thereon.

13. ID.; ID.; ID.; ID.; IF A PARTY SERVED WITH INTERROGATORIES IS A JURIDICAL ENTITY, THE SAME MAY BE ANSWERED BY ANY COMPETENT OFFICER; RULE APPLIED BY ANALOGY
TO THE PCGG. — The petitioner's first contention — that the interrogatories in question are defective because they (a) do not name the particular individuals to whom they are
propounded, being addressed only to the PCGG, and (b) are "fundamentally the same matters . . . (private respondents) sought to be clarified through their aborted Motion . . .
for Bill of Particulars" — are untenable and quickly disposed of. The first part of petitioner's submission is adequately confuted by Section 1, Rule 25 which states that if the
party served with interrogatories is a juridical entity such as "a public or private corporation or a partnership or association," the same shall be "answered . . . by any officer
thereof competent to testify in its behalf." There is absolutely no reason why this proposition should not be applied by analogy to the interrogatories served on the PCGG. That
the interrogatories are addressed only to the PCGG, without naming any specific commissioner or officer thereof, is utterly of no consequence, and may not be invoked as a
reason to refuse to answer. As the rule states, the interrogatories shall be answered "by any officer thereof competent to testify in its behalf."

14. ID.; ID.; ID.; SUBJECT OF DISCOVERY DIFFERENTIATED FROM SUBJECT OF BILL OF PARTICULARS. — That the matters on which discovery is desired are the same matters
subject of a prior motion for bill of particulars addressed to the PCGG's amended complaint — and denied for lack of merit — is beside the point. Indeed, as already pointed out
above, a bill of particulars may elicit only ultimate facts, not so-called evidentiary facts. The latter are without doubt proper subject of discovery.

15. ID.; ID.; ID.; INTERROGATORIES; GROUNDS FOR OBJECTION. — Neither may it be validly argued that the amended interrogatories lack specificity. The merest glance at them
disproves the argument. The interrogatories are made to relate to individual paragraphs of the PCGG's expanded complaint and inquire about details of the ultimate facts
therein alleged. What the PCGG may properly do is to object to specific items of the interrogatories, on the ground of lack of relevancy, or privilege, or that the inquiries are
being made in bad faith, or simply to embarass or oppress it. But until such an objection is presented and sustained, the obligation to answer subsists.

16. ID.; ID.; ID.; ID.; ID.; INQUIRY ON FACTUAL MATTERS, NOT A GROUND. — That the interrogatories deal with factual matters which will be part of the PCGG's proof upon trial,
is not ground for suppressing them either. As already pointed out, it is the precise purpose of discovery to ensure mutual knowledge of all the relevant facts on the part of all
parties even before trial, this being deemed essential to proper litigation. This is why either party may compel the other to disgorge whatever facts he has in his possession; and
the stage at which disclosure of evidence is made is advanced from the time of trial to the period preceding it.

17. ID.; EVIDENCE; A PARTY MAY MAKE HIS ADVERSARY HIS WITNESS; RULE APPLIED IN CASE AT BAR. — Also unmeritorious is the objection that the interrogatories would make
PCGG Commissioners and officers witnesses, in contravention of Executive Order No. 14 and related issuances. In the first place, there is nothing at all wrong in a party's making
his adversary his witness. This is expressly allowed by Section 6, Rule 132 of the Rules of Court.
18. ID.; ACTIONS; MODES OF DISCOVERY; INTERROGATORIES; PERMIT PARTIES TO ENGAGE ON A "FISHING EXPEDITION". — The PCGG insinuates that the private respondents are
engaged on a "fishing expedition," apart from the fact that the information sought is immaterial since they are evidently meant to establish a claim against PCGG officers who
are not parties to the action. It suffices to point out that "fishing expeditions" are precisely permitted through the modes of discovery.

19. ID.; ID.; COUNTERCLAIM; A DEFENDANT WHO FILES A COUNTERCLAIM CAN IMPLEAD PERSONS STRANGERS TO THE ACTION. — A defendant who files a counterclaim against the
plaintiff is allowed by the Rules to implead persons (therefore strangers to the action) as additional defendants on said counterclaim. This may be done pursuant to Section 14,
Rule 6 of the Rules.

20. REMEDIAL LAW; ACTIONS; MODES OF DISCOVERY; INTERROGATORIES; PCGG'S IMMUNITY FROM SUIT; NOT A GROUND TO REFUSE TO ANSWER THE INTERROGATORIES. — The
PCGG's assertion that it or its members are not amenable to any civil action "for anything done or omitted in the discharge of the task contemplated by . . . (Executive) Order
(No. 1)," is not a ground to refuse to answer the interrogatories. The disclosure of facts relevant to the action and which are not self-incriminatory or otherwise privileged is one
thing; the matter of whether or not liability may arise from the facts disclosed in light of Executive Order No. 1, is another. No doubt, the latter proposition may properly be set
up by way of defense in the action.

21. ID.; ID.; ID.; ID.; ANSWER THERETO MAY BE UTILIZED AS FOUNDATION FOR A COUNTERCLAIM. — The apprehension has been expressed that the answers to the interrogatories
may be utilized as foundation for a counterclaim against the PCGG or its members and officers. They will be. The private respondents have made no secret that this is in fact
their intention. Withal, the Court is unable to uphold the proposition that while the PCGG obviously feels itself at liberty to bring actions on the basis of its study and
appreciation of the evidence in its possession, the parties sued should not be free to file counterclaims in the same actions against the PCGG or its officers for gross neglect or
ignorance, if not down right bad faith or malice in the commencement or initiation of such judicial proceedings, or that in the actions that it may bring, the PCGG may opt not
to be bound by rules applicable to the parties it has sued, e.g., the rules of discovery.

22. CONSTITUTIONAL LAW; STATE IMMUNITY FROM SUIT; MAY BE WAIVED BY FILING OF ACTIONS; THE PCGG CANNOT CLAIM A SUPERIOR STATUS TO THE STATE; IT MAY BE
REQUIRED TO TESTIFY OR PRODUCE EVIDENCE IN ANY JUDICIAL PROCEEDING IT HAS ITSELF INITIATED. — The PCGG's postulation that none of its members may be "required to
testify or produce evidence in any judicial . . . proceeding concerning matters within its official cognizance," has no application to a judicial proceeding it has itself initiated. As
just suggested, the act of bringing suit must entail a waiver of the exemption from giving evidence; by bringing suit it brings itself within the operation and scope of all the rules
governing civil actions, including the rights and duties under the rules of discovery. Otherwise, the absurd would have to be conceded, that while the parties it has impleaded as
defendants may be required to "disgorge all the facts" within their knowledge and in their possession, it may not itself be subject to a like compulsion. The State is, of course,
immune from suit in the sense that it cannot, as a rule, be sued without its consent. But it is axiomatic that in filing an action, it divests itself of its sovereign character and
sheds its immunity from suit, descending to the level of an ordinary litigant. The PCGG cannot claim a superior or preferred status to the State, even while assuming to
represent or act for the State.

23. ID.; ID.; CONSENT TO BE SUED MAY BE GIVEN EXPRESSLY OR IMPLIEDLY; WAIVER APPLIES EVEN IF STATE IS PERFORMING GOVERNMENTAL FUNCTION. — The suggestion that the
State makes no implied waiver of immunity by filing suit except when in so doing it acts in, or in matters concerning, its proprietary or non-governmental capacity, is
unacceptable; it attempts a distinction without support in principle or precedent. On the contrary — "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 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 the private parties, 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 . . .
(Sinco, Philippine Political Law, Tenth E., pp. 36-37, citing U.S. vs. Ringgold, 8 Pet. 150, 8 L.ed. 899)'" It can hardly be doubted that in exercising the right of eminent domain,
the State exercises its jus imperii, as distinguished from its proprietary rights or jus gestionis. Yet, even in that area, it has been held that where private property has been
taken in expropriation without just compensation being paid, the defense of immunity from suit cannot be set up by the State against an action for payment by the owner.

24. REMEDIAL LAW; ACTIONS; MODES OF DISCOVERY; PRODUCTION OR INSPECTION OF DOCUMENT; DISCLOSURE OF RELEVANT DOCUMENTS, MANDATORY; CASE AT BAR. — The
Court finally finds that, contrary to the petitioner's theory, there is good cause for the production and inspection of the documents subject of the motion dated August 3, 1989.
Some of the documents are, according to the verification of the amended complaint, the basis of several of the material allegations of said complaint. Others, admittedly, are
to be used in evidence by the plaintiff. It is matters such as these into which inquiry is precisely allowed by the rules of discovery, to the end that the parties may adequately
prepare for pre-trial and trial. The only other documents sought to be produced are needed in relation to the allegations of the counterclaim. Their relevance is indisputable;
their disclosure may not be opposed.

25. ID.; ID.; ID.; PROCEDURE. — Due no doubt to the deplorable unfamiliarity respecting the nature, purposes and operation of the modes of discovery earlier mentioned, there
also appears to be a widely entertained idea that application of said modes is a complicated matter, unduly expensive and dilatory. Nothing could be farther from the truth. For
example, as will already have been noted from the preceding discussion, all that is entailed to activate or put in motion the process of discovery by interrogatories to parties
under Rule 25 of the Rules of Court, is simply the delivery directly to a party of a letter setting forth a list of questions with the request that they be answered individually. That
is all. The service of such a communication on the party has the effect of imposing on him the obligation of answering the questions "separately and fully in writing under oath,"
and serving "a copy of the answers on the party submitting the interrogatories within fifteen (15) days after service of the interrogatories . . ." The sanctions for refusing to
make discovery have already been mentioned. So, too, discovery under Rule 26 is begun by nothing more complex than the service on a party of a letter or other written
communication containing a request that specific facts therein set forth and/or particular documents copies of which are thereto appended, be admitted in writing. That is all.
Again, the receipt of such a communication by the party has the effect of imposing on him the obligation of serving the party requesting admission with "a sworn statement
either denying specifically the matters of which an admission is requested or setting forth in detail the reasons why he cannot truthfully either admit or deny those matters,"
failing in which "(e)ach of the matters of which admission is requested shall be deemed admitted." The taking of depositions in accordance with Rule 24 (either on oral
examination or by written interrogatories) while somewhat less simple, is nonetheless by no means as complicated as seems to be the lamentably extensive notion.

DECISION

NARVASA, J p:

Private respondents Bienvenido R. Tantoco, Jr. and Dominador R. Santiago — together with Ferdinand E. Marcos, Imelda R. Marcos, Bienvenido R. Tantoco, Sr., Gliceria R.
Tantoco, and Maria Lourdes Tantoco-Pineda — are defendants in Civil Case No. 0008 of the Sandiganbayan. The case was commenced on July 21, 1987 by the Presidential
Commission on Good Government (PCGG) in behalf of the Republic of the Philippines. The complaint which initiated the action was denominated one "for reconveyance,
reversion, accounting, restitution and damages," and was avowedly filed pursuant to Executive Order No. 14 of President Corazon C. Aquino.

After having been served with summons, Tantoco, Jr. and Santiago, instead of filing their answer, jointly filed a "MOTION TO STRIKE OUT SOME PORTIONS OF THE COMPLAINT
AND FOR BILL OF PARTICULARS OF OTHER PORTIONS" dated Nov. 3, 1987. 1 The PCGG filed an opposition thereto, 2 and the movants, a reply to the opposition. 3 By order dated
January 29, 1988, the Sandiganbayan, in order to expedite proceedings and accommodate the defendants, gave the PCGG forty-five (45) days to expand its complaint to make
more specific certain allegations. 4

Tantoco and Santiago then presented a "motion for leave to file interrogatories under Rule 25 of the Rules of Court" dated February 1, 1988, and "Interrogatories under Rule
25." 5Basically, they sought an answer to the question: "Who were the Commissioners of the PCGG (aside from its Chairman, Hon. Ramon Diaz, who verified the complaint) who
approved or authorized the inclusion of Messrs. Bienvenido R. Tantoco, Jr. and Dominador R. Santiago as defendants in the . . . case?" 6 The PCGG responded by filing a motion
dated February 9, 1988 to strike out said motion and interrogatories as being impertinent, "queer," "weird," or "procedurally bizarre as the purpose thereof lacks merit as it is
improper, impertinent and irrelevant under any guise." 7

On March 18, 1988, in compliance with the Order of January 29, 1988, the PCGG filed an Expanded Complaint. 8 As regards this expanded complaint, Tantoco and Santiago
reiterated their motion for bill of particulars, through a Manifestation dated April 11, 1988. 9

Afterwards, by Resolution dated July 4, 1988, 10 the Sandiganbayan denied the motion to strike out, for bill of particulars, and for leave to file interrogatories, holding them to
be without legal and factual basis. Also denied was the PCGG's motion to strike out impertinent pleading dated February 9, 1988. The Sandiganbayan declared inter alia the
complaint to be "sufficiently definite and clear enough," there are adequate allegations . . . which clearly portray the supposed involvement and/or alleged participation of
defendants-movants in the transactions described in detail in said Complaint," and "the other matters sought for particularization are evidentiary in nature which should be
ventilated in the pre-trial or trial proper . . . ." It also opined that "(s)ervice of interrogatories before joinder of issue and without leave of court is premature . . . (absent) any
special or extraordinary circumstances . . . which would justify . . . (the same)." llcd
Tantoco and Santiago then filed an Answer with Compulsory Counterclaim under date of July 18, 1988. 11 In response, the PCGG presented a "Reply to Answer with Motion to
Dismiss Compulsory Counterclaim." 12

The case was set for pre-trial on July 31, 1989. 13 On July 25, 1989, the PCGG submitted its PRE-TRIAL BRIEF. 14 The pre-trial was however reset to September 11, 1989, and all
other parties were required to submit pre-trial briefs on or before that date. 15
On July 27, 1989 Tantoco and Santiago filed with the Sandiganbayan a pleading denominated "Interrogatories to Plaintiff," 16 and on August 2, 1989, an "Amended
Interrogatories to Plaintiff" 17 as well as a Motion for Production and Inspection of Documents. 1 8

The amended interrogatories chiefly sought factual details relative to specific averments of PCGG's amended complaint, through such questions, for instance, as —

"1. In connection with the allegations . . . in paragraph 1 . . ., what specific property or properties does the plaintiff claim it has the right to recover from
defendants Tantoco, Jr. and Santiago for being 'ill-gotten'?"

"3. In connection with the allegations . . . in paragraph 10 (a) . . ., what specific act or acts . . . were committed by defendants Tantoco, Jr. and Santiago in
'concert with' defendant Ferdinand Marcos and in furtherance or pursuit, of the alleged systematic plan of said defendant Marcos to accumulate ill-gotten
wealth?"

"5. In connection with . . . paragraph 13 . . ., what specific act or acts of the defendants Tantoco, Jr. and Santiago . . . were committed by said defendants
as part, or in furtherance, of the alleged plan to conceal assets of defendants Ferdinand and Imelda Marcos?"

"7. In connection with . . . paragraph 15 (c) . . . is it plaintiff's position or theory of the case that Tourist Duty Free Shops, Inc., including all the assets of
said corporation, are beneficially owned by either or both defendants Ferdinand and Imelda Marcos and that the defendants Tantoco, Jr. and Santiago, as
well as, the other stockholders of record of the same corporation are mere 'dummies' of said defendants Ferdinand and/or Imelda R. Marcos?"
On the other hand, the motion for production and inspection of documents prayed for examination and copying of —

1) the "official records and other evidence" on the basis of which the verification of the Amended Complaint asserted that the allegations thereof are "true
and correct; llcd

"2) the documents listed in PCGG's Pre-Trial Brief as those "intended to be presented and xx marked as exhibits for the plaintiff;" and

3) "the minutes of the meeting of the PCGG which chronicles the discussion (if any) and the decision (of the Chairman and members) to file the complaint" in
the case at bar.

By Resolutions dated August 21, 1989 and August 25, 1989, the Sandiganbayan admitted the Amended Interrogatories and granted the motion for production and inspection of
documents (production being scheduled on September 14 and 15, 1989), respectively.

On September 1, 1989, the PCGG filed a Motion for Reconsideration of the Resolution of August 25, 1989 (allowing production and inspection of documents). It argued that

1) since the documents subject thereof would be marked as exhibits during the pre-trial on September 11, 1989 anyway, the order for "their production and inspection on
September 14 and 15, are purposeless and unnecessary;"

2) movants already know of the existence and contents of the document which "are clearly described . . . (in) plaintiff's Pre-Trial Brief;"

3) the documents are "privileged in character" since they are intended to be used against the PCGG and/or its Commissioners in violation of Section 4, Executive Order No.
1, viz.:
"(a) 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.

(b) No member or staff of the Commission shall be required to testify or produce evidence in any judicial, legislative, or administrative proceeding
concerning matters within its official cognizance."

It also filed on September 4, 1989 an opposition to the Amended Interrogatories, 19 which the Sandiganbayan treated as a motion for reconsideration of the Resolution of August
21, 1989 (admitting the Amended Interrogatories). The opposition alleged that —
1) the interrogatories "are not specific and do not name the person to whom they are propounded . . .," or "who in the PCGG, in particular, . . . (should) answer the
interrogatories;" LibLex

2) the interrogatories delve into "factual matters which had already been decreed . . . as part of the proof of the Complaint upon trial . . .;"

3) the interrogatories "are frivolous" since they inquire about "matters of fact . . . which defendants . . . sought to . . . (extract) through their aborted Motion for Bill of
Particulars;"

4) the interrogatories "are really in the nature of a deposition, which is prematurely filed and irregularly utilized . . . (since) the order of trial calls for plaintiff to first present
its evidence."

Tantoco and Santiago filed a reply and opposition on September 18, 1989.

After hearing, the Sandiganbayan promulgated two (2) Resolutions on September 29, 1989, the first, denying reconsideration (of the Resolution allowing production of
documents), and the second, reiterating by implication the permission to serve the amended interrogatories on the plaintiff (PCGG). 20

Hence, this petition for certiorari.

The PCGG contends that said orders, both dated September 29, 1989, should be nullified because rendered with grave abuse of discretion amounting to excess of jurisdiction.
More particularly, it claims —
a) as regards the order allowing the amended interrogatories to the plaintiff PCGG:

1) that said interrogatories are not specific and do not name the particular individuals to whom they are propounded, being addressed only to the PCGG;

2) that the interrogatories deal with factual matters which the Sandiganbayan (in denying the movants' motion for bill of particulars) had already declared to
be part of the PCGG's proof upon trial; and

3) that the interrogatories would make PCGG Commissioners and officers witnesses, in contravention of Executive Order No. 14 and related issuances;

and
b) as regards the order granting the motion for production of documents:

1) that movants had not shown any good cause therefor;

2) that some documents sought to be produced and inspected had already been presented in Court and marked preliminarily as PCGG's exhibits, and the
movants had viewed, scrutinized and even offered objections thereto and made comments thereon; and

3) that the other documents sought to be produced are either —

(a) privileged in character or confidential in nature and their use is proscribed by the immunity provisions of Executive Order No. 1, or

(b) non-existent, or mere products of the movants' suspicion and fear.

This Court issued a temporary restraining order on October 27, 1989, directing the Sandiganbayan to desist from enforcing its questioned resolutions of September 29, 1989 in
Civil Case No. 0008. 21

After the issues were delineated and argued at no little length by the parties, the Solicitor General withdrew "as counsel for plaintiff . . . with the reservation, however,
conformably with Presidential Decree No. 478, the provisions of Executive Order No. 292, as well a the decisional law of 'Orbos v. Civil Service Commission, et al.,' (G.R. No.
92561, September 12, 1990) 22 to submit his comment/observation on incidents/matters pending with this . . Court if called for by circumstances in the interest of the
Government or if he is so required by the Court." 23 This, the Court allowed by Resolution dated January 21, 1991. 24

Subsequently, PCGG Commissioner Maximo A. Maceren advised the Court that the cases from which the Solicitor General had withdrawn would henceforth be under his
(Maceren's) charge "and/or any of the following private attorneys: Eliseo B. Alampay, Jr., Mario E. Ongkiko, Mario Jalandoni and such other attorneys as it may later
authorize." 25
The facts not being in dispute, and it appearing that the parties have fully ventilated their respective positions, the Court now proceeds to decide the case. prLL

Involved in the present proceedings are two of the modes of discovery provided in the Rules of Court: interrogatories to parties, 26 and production and inspection of document
and things. 27 Now, it appears to the Court that among far too many lawyers (and not a few judges), there is, if not a regrettable unfamiliarity and even outright ignorance
about the nature, purposes and operation of the modes of discovery, at least a strong yet unreasoned and unreasonable disinclination to resort to them— which is a great pity
for the intelligent and adequate use of the deposition-discovery mechanism, coupled with pre-trial procedure, could, as the experience of other jurisdictions convincingly
demonstrates, effectively shorten the period of litigation and speed up adjudication. 28 Hence, a few words about these remedies is not at all inappropriate.

The resolution of controversies is, as everyone knows, the raison d'etre of courts. This essential function is accomplished by first, the ascertainment of all the material and
relevant facts from the pleadings and from the evidence adduced by the parties, and second, after that determination of the facts has been completed, by the application of
the law thereto to the end that the controversy may be settled authoritatively, definitely and finally.

It is for this reason that a substantial part of the adjective law in this jurisdiction is occupied with assuring that all the facts are indeed presented to the Court; for obviously, to
the extent that adjudication is made on the basis of incomplete facts, to that extent there is faultiness in the approximation of objective justice. It is thus the obligation of
lawyers no less than of judges to see that this objective is attained; that is to say, that there be no suppression, obscuration, misrepresentation or distortion of the facts; and
that no party be unaware of any fact material and relevant to the action, or surprised by any factual detail suddenly brought to his attention during the trial. 29

Seventy-one years ago, in Alonso v. Villamor, 30 this Court described the nature and object of litigation and in the process laid down the standards by which judicial contests
are to be conducted in this jurisdiction. It said:

"A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and destroys
the other. It is, rather a contest in which each contending party fully and fairly lays before the court the facts in issue and then brushing aside as wholly
trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done on the merits. Lawsuits, unlike duels, are not to
be won by a rapier's thrust. Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves
scant consideration from courts. There should be no vested right in technicalities. . . ."

The message is plain. It is the duty of each contending party to lay before the court the facts in issue — fully and fairly; i.e., to present to the court all the material and
relevant facts known to him, suppressing or concealing nothing, nor preventing another party, by clever and adroit manipulation of the technical rules of pleading and evidence,
from also presenting all the facts within his knowledge.

Initially, that undertaking of laying the facts before the court is accomplished by the pleadings filed by the parties; but that, only in a very general way. Only "ultimate facts"
are set forth in the pleadings; hence, only the barest outline of the factual basis of a party's claims or defenses is limned in his pleadings. The law says that every pleading "shall
contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts on which the party pleading relies for his claim or defense, as the case may
be, omitting the statement of mere evidentiary facts." 31

Parenthetically, if this requirement is not observed, i.e., the ultimate facts are alleged too generally or "not averred with sufficient definiteness or particularity to enable . . .
(an adverse party) properly to prepare his responsive pleading or to prepare for trial," a bill of particulars seeking a "more definite statement" may be ordered by the court on
motion of a party. The office of a bill of particulars is, however, limited to making more particular or definite the ultimate facts in a pleading. It is not its office to supply
evidentiary matters. And the common perception is that said evidentiary details are made known to the parties and the court only during the trial, when proof is adduced on the
issues of fact arising from the pleadings. cdrep

The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial. Indeed, it is the purpose and policy of the law that the parties — before
the trial if not indeed even before the pre-trial — should discover or inform themselves of all the facts relevant to the action, not only those known to them individually, but
also those known to their adversaries; in other words, the desideratum is that civil trials should not be carried on in the dark; and the Rules of Court make this ideal possible
through the deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been that ample discovery before trial, under proper
regulation, accomplished one of the most necessary ends of modern procedure: it not only eliminates unessential issues from trials thereby shortening them considerably, but
also requires parties to play the game with the cards on the table so that the possibility of fair settlement before trial is measurably increased. . . ." 32
As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-trial functions of notice-giving, issue-
formulation and fact revelation theretofore performed primarily by the pleadings.

The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues between
the parties, and (2) as a device for ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable the parties, consistent with recognized privileges,
to obtain the fullest possible knowledge of the issues and facts before civil trials and thus prevent that said trials are carried on in the dark. 33
To this end, the field of inquiry that may be covered by depositions or interrogatories is as broad as when the interrogated party is called as a witness to testify orally at trial.
The inquiry extends to all facts which are relevant, whether they be ultimate or evidentiary, excepting only those matters which are privileged. The objective is as much to give
every party the fullest possible information of all the relevant facts before the trial as to obtain evidence for use upon said trial. The principle is reflected in Section 2, Rule 24
(governing depositions) 34 which generally allows the examination of a deponent —

1) "regarding any matter, not privileged, which is relevant to the subject of the pending action, whether relating to the claim or defense of any other party;"
2) as well as:

(a) "the existence, description, nature, custody, condition and location of any books, documents, or other tangible things" and

(b) "the identity and location of persons having knowledge of relevant facts."

What is chiefly contemplated is the discovery of every bit of information which may be useful in the preparation for trial, such as the identity and location of persons having
knowledge of relevant facts; those relevant facts themselves; and the existence, description, nature, custody, condition, and location of any books, documents, or other
tangible things. Hence, "the deposition-discovery rules are to be accorded a broad and liberal treatment. No longer can the time-honored cry of 'fishing expedition' serve to
preclude a party from inquiring into the facts underlying his opponent's case. Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation.
To that end, either party may compel the other to disgorge whatever facts he has ill his possession. The deposition-discovery procedure simply advances the stage at which the
disclosure can be compelled from the time of trial to the period preceding it, thus reducing the possibility, of surprise. . . ." 35

In line with this principle of according liberal treatment to the deposition-discovery mechanism, such modes of discovery as (a) depositions (whether by oral examination or
written interrogatories) under Rule 24, (b) interrogatories to parties under Rule 25, and (c) requests for admissions under Rule 26, may be availed of without leave of court, and
generally, without court intervention. The Rules of Court explicitly provide that leave of court is not necessary to avail of said modes of discovery after an answer to the
complaint has been served. 36 It is only when an answer has not yet been filed (but after jurisdiction has been obtained over the defendant or property subject of the action)
that prior leave of court is needed to avail of these modes of discovery, the reason being that at that time the issues are not yet joined and the disputed facts are not clear. 37

On the other hand, leave of court is required as regards discovery by (a) production or inspection of documents or things in accordance with Rule 27, or (b) physical and mental
examination of persons under Rule 28, which may be granted upon due application and a showing of due cause. cdll

To ensure that availment of the modes of discovery is otherwise untrammeled and efficacious, the law imposes serious sanctions on the party who refuses to makes discovery,
such as dismissing the action or proceeding or part thereof, or rendering judgment by default against the disobedient party; contempt of court, or arrest of the party or agent of
the party; payment of the amount of reasonable expenses incurred in obtaining a court order to compel discovery; taking the matters inquired into as established in accordance
with the claim of the party seeking discovery; refusal to allow the disobedient party support or oppose designated claims or defenses; striking out pleadings or parts thereof;
staying further proceedings. 38

Of course, there are limitations to discovery, even when permitted to be undertaken without leave and without judicial intervention. "As indicated by (the) Rules . . .,
limitations inevitably arise when it can be shown that the examination is being conducted in bad faith or in such a manner as to annoy, embarrass, or oppress the person subject
to the inquiry. 39 And . . . further limitations come into existence when the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege." 40

In fine, the liberty of a party to make discovery is well nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good
faith and within the bounds of the law.

It is in light of these broad principles underlying the deposition-discovery mechanism, in relation of course to the particular rules directly involved, that the issues in this case
will now be resolved.
The petitioner's objections to the interrogatories served on it in accordance with Rule 25 of the Rules of Court cannot be sustained.

It should initially be pointed out — as regards the private respondents "Motion for Leave to File Interrogatories" dated February 1, 1988 41 — that it was correct for them to seek
leave to serve interrogatories, because discovery was being availed of before an answer had been served. In such a situation, i.e., "after jurisdiction has been obtained over any
defendant or over property subject of the action" but before answer, Section 1 of Rule 24 (treating of depositions), in relation to Section 1 of Rule 25 (dealing with
interrogatories to parties) explicitly requires "leave of court." 42 But there was no need for the private respondents to seek such leave to serve their "Amended Interrogatories
to Plaintiffs (dated August 2, 1989 43 ) after they had filed their answer to the PCGG's complaint, just as there was no need for the Sandiganbayan to act thereon.
1. The petitioner's first contention — that the interrogatories in question are defective because they (a) do not name the particular individuals to whom they are propounded,
being addressed only to the PCGG, and (b) are "fundamentally the same matters . . . (private respondents) sought to be clarified through their aborted Motion . . . for Bill of
Particulars" — are untenable and quickly disposed of.

The first part of petitioner's submission is adequately confuted by Section 1, Rule 25 which states that if the party served with interrogatories is a juridical entity such as "a
public or private corporation or a partnership or association," the same shall be "answered . . . by any officer thereof competent to testify in its behalf." There is absolutely no
reason why this proposition should not be applied by analogy to the interrogatories served on the PCGG. That the interrogatories are addressed only to the PCGG, without
naming any specific commissioner or officer thereof, is utterly of no consequence, and may not be invoked as a reason to refuse to answer. As the rule states, the
interrogatories shall be answered "by any officer thereof competent to testify in its behalf."

That the matters on which discovery is desired are the same matters subject of a prior motion for bill of particulars addressed to the PCGG's amended complaint — and denied
for lack of merit — is beside the point. Indeed, as already pointed out above, a bill of particulars may elicit only ultimate facts, not so-called evidentiary facts. The latter are
without doubt proper subject of discovery. 44

Neither may it be validly argued that the amended interrogatories lack specificity. The merest glance at them disproves the argument. The interrogatories are made to relate to
individual paragraphs of the PCGG's expanded complaint and inquire about details of the ultimate facts therein alleged. What the PCGG may properly do is to object to specific
items of the interrogatories, on the ground of lack of relevancy, or privilege, or that the inquiries are being made in bad faith, or simply to embarass or oppress it. 45 But until
such an objection is presented and sustained, the obligation to answer subsists.

2. That the interrogatories deal with factual matters which will be part of the PCGG's proof upon trial, is not ground for suppressing them either. As already pointed out, it is
the precise purpose of discovery to ensure mutual knowledge of all the relevant facts on the part of all parties even before trial, this being deemed essential to proper
litigation. This is why either party may compel the other to disgorge whatever facts he has in his possession; and the stage at which disclosure of evidence is made is advanced
from the time of trial to the period preceding it. LLjur

3. Also unmeritorious is the objection that the interrogatories would make PCGG Commissioners and officers witnesses, in contravention of Executive Order No. 14 and related
issuances. In the first place, there is nothing at all wrong in a party's making his adversary his witness. 46 This is expressly allowed by Section 6, Rule 132 of the Rules of
Court, viz.:

"SECTION 6. Direct examination of unwilling or hostile witnesses. — A party may . . . call an adverse party or an officer, director, or managing agent of a
public or private corporation or of a partnership or association which is an adverse party, and interrogate him by leading questions and contradict and
impeach him in all respects as if he had been called by the adverse party, and the witness thus called may be contradicted and impeached by or on behalf of
the adverse party also, and may be cross-examined by the adverse party only upon the subject-matter of his examination in chief."

The PCGG insinuates that the private respondents are engaged on a "fishing expedition," apart from the fact that the information sought is immaterial since they are evidently
meant to establish a claim against PCGG officers who are not parties to the action It suffices to point out that "fishing expeditions" are precisely permitted through the modes of
discovery. 47 Moreover, a defendant who files a counterclaim against the plaintiff is allowed by the Rules to implead persons (therefore strangers to the action) as additional
defendants on said counterclaim. This may be done pursuant to Section 14, Rule 6 of the Rules, to wit:

"SECTION 14. Bringing new parties. — When the presence of parties other than those to the original action is required for the granting of complete relief in
the determination of a counterclaim or cross claim, the court shall order them to be brought in as defendants, if jurisdiction over them can be obtained."

The PCGG's assertion that it or its members are not amenable to any civil action "for anything done or omitted in the discharge of the task contemplated by . . . (Executive)
Order (No. 1)," is not a ground to refuse to answer the interrogatories. The disclosure of facts relevant to the action and which are not self-incriminatory or otherwise privileged
is one thing; the matter of whether or not liability may arise from the facts disclosed in light of Executive Order No. 1, is another. No doubt, the latter proposition may properly
be set up by way of defense in the action.

The apprehension has been expressed that the answers to the interrogatories may be utilized as foundation for a counterclaim against the PCGG or its members and officers.
They will be. The private respondents have made no secret that this is in fact their intention. Withal, the Court is unable to uphold the proposition that while the PCGG
obviously feels itself at liberty to bring actions on the basis of its study and appreciation of the evidence in its possession, the parties sued should not be free to file
counterclaims in the same actions against the PCGG or its officers for gross neglect or ignorance, if not down right bad faith or malice in the commencement or initiation of such
judicial proceedings, or that in the actions that it may bring, the PCGG may opt not to be bound by rules applicable to the parties it has sued, e.g., the rules of discovery.
So, too, the PCGG's postulation that none of its members may be "required to testify or produce evidence in any judicial . . . proceeding concerning matters within its official
cognizance," has no application to a judicial proceeding it has itself initiated. As just suggested, the act of bringing suit must entail a waiver of the exemption from giving
evidence; by bringing suit it brings itself within the operation and scope of all the rules governing civil actions, including the rights and duties under the rules of discovery.
Otherwise, the absurd would have to be conceded, that while the parties it has impleaded as defendants may be required to "disgorge all the facts" within their knowledge and
in their possession, it may not itself be subject to a like compulsion.

The State is, of course, immune from suit in the sense that it cannot, as a rule, be sued without its consent. But it is axiomatic that in filing an action, it divests itself of its
sovereign character and sheds its immunity from suit, descending to the level of an ordinary litigant. The PCGG cannot claim a superior or preferred status to the State, even
while assuming to represent or act for the State. 48

The suggestion 49 that the State makes no implied waiver of immunity by filing suit except when in so doing it acts in, or in matters concerning, its proprietary or non-
governmental capacity, is unacceptable; it attempts a distinction without support in principle or precedent. On the contrary —

"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." 50

"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 the private parties, 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. . . . (Sinco, Philippine Political Law, Tenth E., pp. 36-37, citing U.S. vs. Ringgold, 8 Pet. 150, 8
L.ed. 899)'" 51

It can hardly be doubted that in exercising the right of eminent domain, the State exercises its jus imperii, as distinguished from its proprietary rights or jus gestionis. Yet, even
in that area, it has been held that where private property has been taken in expropriation without just compensation being paid, the defense of immunity from suit cannot be
set up by the State against an action for payment by the owner. 52

The Court also finds itself unable to sustain the PCGG's other principal contention, of the nullity of the Sandiganbayan's Order for the production and inspection of specified
documents and things allegedly in its possession.

The Court gives short shrift to the argument that some documents sought to be produced and inspected had already been presented in Court and marked preliminarily as PCGG's
exhibits, the movants having in fact viewed, scrutinized and even offered objections thereto and made comments thereon. Obviously, there is nothing secret or confidential
about these documents. No serious objection can therefore be presented to the desire of the private respondents to have copies of those documents in order to study them
some more or otherwise use them during the trial for any purpose allowed by law.

The PCGG says that some of the documents are non-existent. This it can allege in response to the corresponding question in the interrogatories, and it will incur no sanction for
doing so unless it is subsequently established that the denial is false. cdphil

The claim that use of the documents is prescribed by Executive Order No. 1 has already been dealt with. The PCGG is however at liberty to allege and prove that said documents
fall within some other privilege, constitutional or statutory.

The Court finally finds that, contrary to the petitioner's theory, there is good cause for the production and inspection of the documents subject of the motion dated August 3,
1989. 53Some of the documents are, according to the verification of the amended complaint, the basis of several of the material allegations of said complaint. Others,
admittedly, are to be used in evidence by the plaintiff. It is matters such as these into which inquiry is precisely allowed by the rules of discovery, to the end that the parties
may adequately prepare for pre-trial and trial. The only other documents sought to be produced are needed in relation to the allegations of the counterclaim. Their relevance is
indisputable; their disclosure may not be opposed.

One last word. Due no doubt to the deplorable unfamiliarity respecting the nature, purposes and operation of the modes of discovery earlier mentioned, 54 there also appears
to be a widely entertained idea that application of said modes is a complicated matter, unduly expensive and dilatory. Nothing could be farther from the truth. For example, as
will already have been noted from the preceding discussion, all that is entailed to activate or put in motion the process of discovery by interrogatories to parties under Rule 25
of the Rules of Court, is simply the delivery directly to a party of a letter setting forth a list of questions with the request that they be answered individually. 55 That is all. The
service of such a communication on the party has the effect of imposing on him the obligation of answering the questions "separately and fully in writing under oath," and
serving "a copy of the answers on the party submitting the interrogatories within fifteen (15) days after service of the interrogatories . . ." 56 The sanctions for refusing to make
discovery have already been mentioned. 57 So, too, discovery under rule 26 is begun by nothing more complex than the service on a party of a letter or other written
communication containing a request that specific facts therein set forth and/or particular documents copies of which are thereto appended, be admitted in writing. 58 That is
all. Again, the receipt of such a communication by the party has the effect of imposing on him the obligation of serving the party requesting admission with "a sworn statement
either denying specifically the matters of which an admission is requested or setting forth in detail the reasons why he cannot truthfully either admit or deny those matters,"
failing in which "(e)ach of the matters of which admission is requested shall be deemed admitted." 59 The taking of depositions in accordance with Rule 24 (either on oral
examination or by written interrogatories) while somewhat less simple, is nonetheless by no means as complicated as seems to be the lamentably extensive notion.

WHEREFORE, The petition is DENIED, without pronouncement as to costs. The temporary restraining order issued on October 27, 1989 is hereby LIFTED AND SET ASIDE.
SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Paras, Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

Romero, J., took no part.

Separate Opinions

CRUZ, J ., concurring:

I am delighted to concur with Mr. Justice Andres R. Narvasa in his scholarly ponencia which, besides reaching a conclusion sustained by the applicable law and jurisprudence,
makes for reading both pleasurable and instructive. One function of the Court not generally appreciated is to educate the reader on the intricacies and even the mystique of the
law. The opinion performs this function with impressive expertise and makes the modes of discovery less esoteric or inaccessible to many members of the bar.

||| (Republic v. Sandiganbayan, G.R. No. 90478, [November 21, 1991], 281 PHIL 234-265)
 [G.R. No. 185572. February 7, 2012.]

CHINA NATIONAL MACHINERY & EQUIPMENT CORP. (GROUP), petitioner, vs. HON. CESAR D. SANTAMARIA, in his official capacity as Presiding Judge of
Branch 145, Regional Trial Court of Makati City, HERMINIO HARRY L. ROQUE, JR., JOEL R. BUTUYAN, ROGER R. RAYEL, ROMEL R. BAGARES, CHRISTOPHER
FRANCISCO C. BOLASTIG, LEAGUE OF URBAN POOR FOR ACTION (LUPA), KILUSAN NG MARALITA SA MEYCAUAYAN (KMM-LUPA CHAPTER), DANILO M.
CALDERON, VICENTE C. ALBAN, MERLYN M. VAAL, LOLITA S. QUINONES, RICARDO D. LANOZO, JR., CONCHITA G. GOZO, MA. TERESA D. ZEPEDA, JOSEFINA
A. LANOZO, and SERGIO C. LEGASPI, JR., KALIPUNAN NG DAMAYANG MAHIHIRAP (KADAMAY), EDY CLERIGO, RAMMIL DINGAL, NELSON B. TERRADO, CARMEN
DEUNIDA, and EDUARDO LEGSON, respondents.

DECISION

SERENO, J p:

This is a Petition for Review on Certiorari with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or Preliminary Injunction assailing the 30
September 2008 Decision and 5 December 2008 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 103351. 1
On 14 September 2002, petitioner China National Machinery & Equipment Corp. (Group) (CNMEG), represented by its chairperson, Ren Hongbin, entered into a
Memorandum of Understanding with the North Luzon Railways Corporation (Northrail), represented by its president, Jose L. Cortes, Jr. for the conduct of a feasibility study
on a possible railway line from Manila to San Fernando, La Union (the Northrail Project). 2
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
(Aug 30 MOU), wherein China agreed to extend Preferential Buyer's Credit to the Philippine government to finance the Northrail Project. 3 The Chinese government designated
EXIM Bank as the lender, while the Philippine government named the DOF as the borrower. 4 Under the Aug 30 MOU, EXIM Bank agreed to extend an amount not exceeding
USD400,000,000 in favor of the DOF, payable in 20 years, with a 5-year grace period, and at the rate of 3% per annum. 5
On 1 October 2003, the Chinese Ambassador to the Philippines, Wang Chungui (Amb. Wang), wrote a letter to DOF Secretary Jose Isidro Camacho (Sec. Camacho)
informing him of CNMEG's designation as the Prime Contractor for the Northrail Project. 6 SIcEHD
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). 7 The contract price for the Northrail Project was pegged at USD421,050,000. 8
On 26 February 2004, the Philippine government and EXIM Bank entered into a counterpart financial agreement — Buyer Credit Loan Agreement No. BLA 04055 (the
Loan Agreement). 9 In the Loan Agreement, EXIM Bank agreed to extend Preferential Buyer's Credit in the amount of USD400,000,000 in favor of the Philippine government in
order to finance the construction of Phase I of the Northrail Project. 10
On 13 February 2006, respondents filed a Complaint for Annulment of Contract and Injunction with Urgent Motion for Summary Hearing to Determine the Existence
of Facts and Circumstances Justifying the Issuance of Writs of Preliminary Prohibitory and Mandatory Injunction and/or TRO against CNMEG, the Office of the Executive
Secretary, the DOF, the Department of Budget and Management, the National Economic Development Authority and Northrail. 11 The case was docketed as Civil Case No. 06-
203 before the Regional Trial Court, National Capital Judicial Region, Makati City, Branch 145 (RTC Br. 145). In the Complaint, respondents alleged that the Contract Agreement
and the Loan Agreement were void for being contrary to (a) the Constitution; (b) Republic Act No. 9184 (R.A. No. 9184), otherwise known as the Government Procurement
Reform Act; (c) Presidential Decree No. 1445, otherwise known as the Government Auditing Code; and (d) Executive Order No. 292, otherwise known as the Administrative
Code. 12
RTC Br. 145 issued an Order dated 17 March 2006 setting the case for hearing on the issuance of injunctive reliefs. 13 On 29 March 2006, CNMEG filed an Urgent
Motion for Reconsideration of this Order. 14 Before RTC Br. 145 could rule thereon, CNMEG filed a Motion to Dismiss dated 12 April 2006, arguing that the trial court did not
have jurisdiction over (a) its person, as it was an agent of the Chinese government, making it immune from suit, and (b) the subject matter, as the Northrail Project was a
product of an executive agreement. 15
 On 15 May 2007, RTC Br. 145 issued an Omnibus Order denying CNMEG's Motion to Dismiss and setting the case for summary hearing to determine whether the
injunctive reliefs prayed for should be issued. 16 CNMEG then filed a Motion for Reconsideration, 17 which was denied by the trial court in an Order dated 10 March
2008. 18 Thus, CNMEG filed before the CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or Writ of Preliminary Injunction dated 4 April 2008. 19 IASEca
In the assailed Decision dated 30 September 2008, the appellate court dismissed the Petition for Certiorari. 20 Subsequently, CNMEG filed a Motion for
Reconsideration, 21which was denied by the CA in a Resolution dated 5 December 2008. 22 Thus, CNMEG filed the instant Petition for Review on Certiorari dated 21 January
2009, raising the following issues: 23
Whether or not petitioner CNMEG is an agent of the sovereign People's Republic of China.
Whether or not the Northrail contracts are products of an executive agreement between two sovereign states.

Whether or not the certification from the Department of Foreign Affairs is necessary under the foregoing circumstances.
Whether or not the act being undertaken by petitioner CNMEG is an act jure imperii.

Whether or not the Court of Appeals failed to avoid a procedural limbo in the lower court. ECTSDa
Whether or not the Northrail Project is subject to competitive public bidding.

Whether or not the Court of Appeals ignored the ruling of this Honorable Court in the Neri case.

CNMEG prays for the dismissal of Civil Case No. 06-203 before RTC Br. 145 for lack of jurisdiction. It likewise requests this Court for the issuance of a TRO and, later
on, a writ of preliminary injunction to restrain public respondent from proceeding with the disposition of Civil Case No. 06-203.
The crux of this case boils down to two main issues, namely:
1. Whether CNMEG is entitled to immunity, precluding it from being sued before a local court.
2. Whether the Contract Agreement is an executive agreement, such that it cannot be questioned by or before a local court.

First issue: Whether CNMEG is

entitled to immunity
This Court explained the doctrine of sovereign immunity in Holy See v. Rosario, 24 to wit:
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 acts or acts jure gestionis.
(Emphasis supplied; citations omitted.)
xxx xxx xxx

The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with the discharge
of governmental functions. This is particularly true with respect to the Communist states which took control of nationalized business activities and international
trading. EcTDCI

In JUSMAG v. National Labor Relations Commission, 25 this Court affirmed the Philippines' adherence to the restrictive theory as follows:
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 restrictiveapplication of the doctrine.
xxx xxx xxx

As it stands now, the application of the doctrine of immunity from suit has been restricted to sovereign or governmental activities (jure imperii).
The mantle of state immunity cannot be extended to commercial, private and proprietary acts (jure gestionis). 26 (Emphasis supplied.)
 Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of the act involved — whether the entity claiming immunity performs
governmental, as opposed to proprietary, functions. As held in United States of America v. Ruiz — 27
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. 28

A. CNMEG is engaged in a
proprietary activity.
A threshold question that must be answered is whether CNMEG performs governmental or proprietary functions. A thorough examination of the basic facts of the
case would show that CNMEG is engaged in a proprietary activity.
The parties executed the Contract Agreement for the purpose of constructing the Luzon Railways, viz.: 29
WHEREAS the Employer (Northrail) desired to construct the railways from Caloocan to Malolos, section I, Phase I of Philippine North Luzon Railways
Project (hereinafter referred to as THE PROJECT); ScHAIT

AND WHEREAS the Contractor has offered to provide the Project on Turnkey basis, including design, manufacturing, supply, construction,
commissioning, and training of the Employer's personnel;

AND WHEREAS the Loan Agreement of the Preferential Buyer's Credit between Export-Import Bank of China and Department of Finance of Republic of
the Philippines;
NOW, THEREFORE, the parties agree to sign this Contract for the Implementation of the Project.

The above-cited portion of the Contract Agreement, however, does not on its own reveal whether the construction of the Luzon railways was meant to be a proprietary
endeavor. In order to fully understand the intention behind and the purpose of the entire undertaking, the Contract Agreement must not be read in isolation. Instead, it must
be construed in conjunction with three other documents executed in relation to the Northrail Project, namely: (a) the Memorandum of Understanding dated 14 September
2002 between Northrail and CNMEG; 30 (b) the letter of Amb. Wang dated 1 October 2003 addressed to Sec. Camacho; 31 and (c) the Loan Agreement. 32
1. Memorandum of Understanding
dated 14 September 2002
The Memorandum of Understanding dated 14 September 2002 shows that CNMEG sought the construction of the Luzon Railways as a proprietary venture. The relevant
parts thereof read:
WHEREAS, CNMEG has the financial capability, professional competence and technical expertise to assess the state of the [Main Line North (MLN)]
and recommend implementation plans as well as undertake its rehabilitation and/or modernization;

WHEREAS, CNMEG has expressed interest in the rehabilitation and/or modernization of the MLN from Metro Manila to San Fernando, La Union
passing through the provinces of Bulacan, Pampanga, Tarlac, Pangasinan and La Union (the 'Project');

WHEREAS, the NORTHRAIL CORP. welcomes CNMEG's proposal to undertake a Feasibility Study (the "Study") at no cost to NORTHRAIL CORP.; aDcHIS

WHEREAS, the NORTHRAIL CORP. also welcomes CNMEG's interest in undertaking the Project with Supplier's Credit and intends to employ CNMEG
as the Contractor for the Project subject to compliance with Philippine and Chinese laws, rules and regulations for the selection of a contractor;

WHEREAS, the NORTHRAIL CORP. considers CNMEG's proposal advantageous to the Government of the Republic of the Philippines and has therefore
agreed to assist CNMEG in the conduct of the aforesaid Study;
xxx xxx xxx

II. APPROVAL PROCESS

2.1 As soon as possible after completion and presentation of the Study in accordance with Paragraphs 1.3 and 1.4 above and in compliance with necessary
governmental laws, rules, regulations and procedures required from both parties, the parties shall commence the preparation and negotiation of the
 terms and conditions of the Contract (the "Contract") to be entered into between them on the implementation of the Project. The parties shall use
their best endeavors to formulate and finalize a Contract with a view to signing the Contract within one hundred twenty (120) days from
CNMEG's presentation of the Study. 33 (Emphasis supplied) TcCDIS

Clearly, it was CNMEG that initiated the undertaking, and not the Chinese government. The Feasibility Study was conducted not because of any diplomatic gratuity
from or exercise of sovereign functions by the Chinese government, but was plainly a business strategy employed by CNMEG with a view to securing this commercial enterprise.
2. Letter dated 1 October 2003
That CNMEG, and not the Chinese government, initiated the Northrail Project was confirmed by Amb. Wang in his letter dated 1 October 2003, thus:
1. CNMEG has the proven competence and capability to undertake the Project as evidenced by the ranking of 42 given by the ENR among 225 global
construction companies.

2. CNMEG already signed an MOU with the North Luzon Railways Corporation last September 14, 2000 during the visit of Chairman Li Peng. Such being
the case, they have already established an initial working relationship with your North Luzon Railways Corporation. This would categorize CNMEG as the state
corporation within the People's Republic of China which initiated our Government's involvement in the Project.

3. Among the various state corporations of the People's Republic of China, only CNMEG has the advantage of being fully familiar with the current
requirements of the Northrail Project having already accomplished a Feasibility Study which was used as inputs by the North Luzon Railways Corporation in
the approvals (sic) process required by the Republic of the Philippines. 34 (Emphasis supplied.)

Thus, the desire of CNMEG to secure the Northrail Project was in the ordinary or regular course of its business as a global construction company. The implementation
of the Northrail Project was intended to generate profit for CNMEG, with the Contract Agreement placing a contract price of USD421,050,000 for the venture. 35 The use of
the term "state corporation" to refer to CNMEG was only descriptive of its nature as a government-owned and/or -controlled corporation, and its assignment as the Primary
Contractor did not imply that it was acting on behalf of China in the performance of the latter's sovereign functions. To imply otherwise would result in an absurd situation,
in which all Chinese corporations owned by the state would be automatically considered as performing governmental activities, even if they are clearly engaged in commercial
or proprietary pursuits.
3. The Loan Agreement
CNMEG claims immunity on the ground that the Aug 30 MOU on the financing of the Northrail Project was signed by the Philippine and Chinese governments, and its
assignment as the Primary Contractor meant that it was bound to perform a governmental function on behalf of China. However, the Loan Agreement, which originated from
the same Aug 30 MOU, belies this reasoning, viz.: AScHCD
Article 11.. . . (j) Commercial Activity. The execution and delivery of this Agreement by the Borrower constitute, and the Borrower's performance of
and compliance with its obligations under this Agreement will constitute, private and commercial acts done and performed for commercial purposes under
the laws of the Republic of the Philippines and neither the Borrower nor any of its assets is entitled to any immunity or privilege (sovereign or otherwise)
from suit, execution or any other legal process with respect to its obligations under this Agreement, as the case may be, in any jurisdiction.
Notwithstanding the foregoing, the Borrower does not waive any immunity with respect of its assets which are (i) used by a diplomatic or consular mission of
the Borrower and (ii) assets of a military character and under control of a military authority or defense agency and (iii) located in the Philippines and dedicated
to public or governmental use (as distinguished from patrimonial assets or assets dedicated to commercial use). (Emphasis supplied.)

(k) Proceedings to Enforce Agreement. In any proceeding in the Republic of the Philippines to enforce this Agreement, the choice of the laws of the
People's Republic of China as the governing law hereof will be recognized and such law will be applied. The waiver of immunity by the Borrower, the irrevocable
submissions of the Borrower to the non-exclusive jurisdiction of the courts of the People's Republic of China and the appointment of the Borrower's Chinese
Process Agent is legal, valid, binding and enforceable and any judgment obtained in the People's Republic of China will be if introduced, evidence for
enforcement in any proceedings against the Borrower and its assets in the Republic of the Philippines provided that (a) the court rendering judgment had
jurisdiction over the subject matter of the action in accordance with its jurisdictional rules, (b) the Republic had notice of the proceedings, (c) the judgment
of the court was not obtained through collusion or fraud, and (d) such judgment was not based on a clear mistake of fact or law. 36

Further, the Loan Agreement likewise contains this express waiver of immunity:
15.5 Waiver of Immunity. The Borrower irrevocably and unconditionally waives, any immunity to which it or its property may at any time be or become
entitled, whether characterized as sovereign immunity or otherwise, from any suit, judgment, service of process upon it or any agent, execution on judgment,
set-off, attachment prior to judgment, attachment in aid of execution to which it or its assets may be entitled in any legal action or proceedings with respect
 to this Agreement or any of the transactions contemplated hereby or hereunder. Notwithstanding the foregoing, the Borrower does not waive any immunity in
respect of its assets which are (i) used by a diplomatic or consular mission of the Borrower, (ii) assets of a military character and under control of a military
authority or defense agency and (iii) located in the Philippines and dedicated to a public or governmental use (as distinguished from patrimonial assets or
assets dedicated to commercial use). 37

Thus, despite petitioner's claim that the EXIM Bank extended financial assistance to Northrail because the bank was mandated by the Chinese government, and not
because of any motivation to do business in the Philippines, 38 it is clear from the foregoing provisions that the Northrail Project was a purely commercial transaction. CTDAaE
Admittedly, the Loan Agreement was entered into between EXIM Bank and the Philippine government, while the Contract Agreement was between Northrail and
CNMEG. Although the Contract Agreement is silent on the classification of the legal nature of the transaction, the foregoing provisions of the Loan Agreement, which is an
inextricable part of the entire undertaking, nonetheless reveal the intention of the parties to the Northrail Project to classify the whole venture as commercial or proprietary
in character.
Thus, piecing together the content and tenor of the Contract Agreement, the Memorandum of Understanding dated 14 September 2002, Amb. Wang's letter dated 1
October 2003, and the Loan Agreement would reveal the desire of CNMEG to construct the Luzon Railways in pursuit of a purely commercial activity performed in the ordinary
course of its business.
B.CNMEG failed to adduce evidence
that it is immune from suit under
Chinese law.
Even assuming arguendo that CNMEG performs governmental functions, such claim does not automatically vest it with immunity. This view finds support in Malong
v. Philippine National Railways, in which this Court held that "(i)mmunity from suit is determined by the character of the objects for which the entity was organized." 39
In this regard, this Court's ruling in Deutsche Gesellschaft Für Technische Zusammenarbeit (GTZ) v. CA 40 must be examined. In Deutsche Gesellschaft, Germany and
the Philippines entered into a Technical Cooperation Agreement, pursuant to which both signed an arrangement promoting the Social Health Insurance-Networking and
Empowerment (SHINE) project. The two governments named their respective implementing organizations: the Department of Health (DOH) and the Philippine Health Insurance
Corporation (PHIC) for the Philippines, and GTZ for the implementation of Germany's contributions. In ruling that GTZ was not immune from suit, this Court held:
The arguments raised by GTZ and the [Office of the Solicitor General (OSG)] are rooted in several indisputable facts. The SHINE project was
implemented pursuant to the bilateral agreements between the Philippine and German governments. GTZ was tasked, under the 1991 agreement,
with the implementation of the contributions of the German government. The activities performed by GTZ pertaining to the SHINE project are
governmental in nature, related as they are to the promotion of health insurance in the Philippines. The fact that GTZ entered into employment contracts
with the private respondents did not disqualify it from invoking immunity from suit, as held in cases such as Holy See v. Rosario, Jr., which set forth what
remains valid doctrine: SETaHC

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.

Beyond dispute is the tenability of the comment points (sic) raised by GTZ and the OSG that GTZ was not performing proprietary
functions notwithstanding its entry into the particular employment contracts. Yet there is an equally fundamental premise which GTZ and the OSG fail to
address, namely: Is GTZ, by conception, able to enjoy the Federal Republic's immunity from suit?

The principle of state immunity from suit, whether a local state or a foreign state, is reflected in Section 9, Article XVI of the Constitution, which
states that "the State may not be sued without its consent." Who or what consists of "the State"? For one, the doctrine is available to foreign States insofar as
they are sought to be sued in the courts of the local State, necessary as it is to avoid "unduly vexing the peace of nations."

If the instant suit had been brought directly against the Federal Republic of Germany, there would be no doubt that it is a suit brought against a
State, and the only necessary inquiry is whether said State had consented to be sued. However, the present suit was brought against GTZ. It is necessary for
us to understand what precisely are the parameters of the legal personality of GTZ.
 Counsel for GTZ characterizes GTZ as "the implementing agency of the Government of the Federal Republic of Germany," a depiction similarly
adopted by the OSG. Assuming that the characterization is correct, it does not automatically invest GTZ with the ability to invoke State immunity from
suit. The distinction lies in whether the agency is incorporated or unincorporated.

xxx xxx xxx

State immunity from suit may be waived by general or special law. The special law can take the form of the original charter of the incorporated
government agency. Jurisprudence is replete with examples of incorporated government agencies which were ruled not entitled to invoke immunity from suit,
owing to provisions in their charters manifesting their consent to be sued.
xxx xxx xxx

It is useful to note that on the part of the Philippine government, it had designated two entities, the Department of Health and the Philippine Health
Insurance Corporation (PHIC), as the implementing agencies in behalf of the Philippines. The PHIC was established under Republic Act No. 7875, Section 16 (g)
of which grants the corporation the power "to sue and be sued in court." Applying the previously cited jurisprudence, PHIC would not enjoy immunity from suit
even in the performance of its functions connected with SHINE, however, (sic) governmental in nature as (sic) they may be. SCEDaT

Is GTZ an incorporated agency of the German government? There is some mystery surrounding that question. Neither GTZ nor the OSG go
beyond the claim that petitioner is "the implementing agency of the Government of the Federal Republic of Germany." On the other hand, private
respondents asserted before the Labor Arbiter that GTZ was "a private corporation engaged in the implementation of development projects." The Labor Arbiter
accepted that claim in his Order denying the Motion to Dismiss, though he was silent on that point in his Decision. Nevertheless, private respondents argue in
their Comment that the finding that GTZ was a private corporation "was never controverted, and is therefore deemed admitted." In its Reply, GTZ controverts
that finding, saying that it is a matter of public knowledge that the status of petitioner GTZ is that of the "implementing agency," and not that of a private
corporation.

In truth, private respondents were unable to adduce any evidence to substantiate their claim that GTZ was a "private corporation," and the Labor
Arbiter acted rashly in accepting such claim without explanation. But neither has GTZ supplied any evidence defining its legal nature beyond that of the
bare descriptive "implementing agency." There is no doubt that the 1991 Agreement designated GTZ as the "implementing agency" in behalf of the
German government. Yet the catch is that such term has no precise definition that is responsive to our concerns. Inherently, an agent acts in behalf of
a principal, and the GTZ can be said to act in behalf of the German state. But that is as far as "implementing agency" could take us. The term by itself
does not supply whether GTZ is incorporated or unincorporated, whether it is owned by the German state or by private interests, whether it has juridical
personality independent of the German government or none at all.

xxx xxx xxx

Again, we are uncertain of the corresponding legal implications under German law surrounding "a private company owned by the Federal
Republic of Germany." Yet taking the description on face value, the apparent equivalent under Philippine law is that of a corporation organized under
the Corporation Code but owned by the Philippine government, or a government-owned or controlled corporation without original charter. And it bears
notice that Section 36 of the Corporate Code states that "[e]very corporation incorporated under this Code has the power and capacity . . . to sue and
be sued in its corporate name." DCcIaE

It is entirely possible that under German law, an entity such as GTZ or particularly GTZ itself has not been vested or has been specifically deprived
the power and capacity to sue and/or be sued. Yet in the proceedings below and before this Court, GTZ has failed to establish that under German law, it
has not consented to be sued despite it being owned by the Federal Republic of Germany. We adhere to the rule that in the absence of evidence to the
contrary, foreign laws on a particular subject are presumed to be the same as those of the Philippines, and following the most intelligent assumption
we can gather, GTZ is akin to a governmental owned or controlled corporation without original charter which, by virtue of the Corporation Code, has
expressly consented to be sued. At the very least, like the Labor Arbiter and the Court of Appeals, this Court has no basis in fact to conclude or presume that
GTZ enjoys immunity from suit. 41 (Emphasis supplied.)
Applying the foregoing ruling to the case at bar, it is readily apparent that CNMEG cannot claim immunity from suit, even if it contends that it performs governmental
functions. Its designation as the Primary Contractor does not automatically grant it immunity, just as the term "implementing agency" has no precise definition for purposes
of ascertaining whether GTZ was immune from suit. Although CNMEG claims to be a government-owned corporation, it failed to adduce evidence that it has not consented to
be sued under Chinese law. Thus, following this Court's ruling in Deutsche Gesellschaft, in the absence of evidence to the contrary, CNMEG is to be presumed to be a
government-owned and -controlled corporation without an original charter. As a result, it has the capacity to sue and be sued under Section 36 of the Corporation Code.
C.CNMEG failed to present a
certification from the Department
of Foreign Affairs.
In Holy See, 42 this Court reiterated the oft-cited doctrine that the determination by the Executive that an entity is entitled to sovereign or diplomatic immunity is
a political question conclusive upon the courts, to wit:
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.
xxx xxx xxx

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 v. 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 v. Aquino, 48
SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v. 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. EHTISC

In some cases, the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private counsels (Raquiza
v. Bradford, 75 Phil. 50 [1945]; Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America v. 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. 43(Emphasis supplied.)

The question now is whether any agency of the Executive Branch can make a determination of immunity from suit, which may be considered as conclusive upon the
courts. This Court, in Department of Foreign Affairs (DFA) v. National Labor Relations Commission (NLRC), 44 emphasized the DFA's competence and authority to provide
such necessary determination, to wit:
The DFA's function includes, among its other mandates, the determination of persons and institutions covered by diplomatic immunities, a
determination which, when challenge, (sic) 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 of (sic) the DFA as being the highest
executive department with the competence and authority to so act in this aspect of the international arena. 45 (Emphasis supplied.)

Further, the fact that this authority is exclusive to the DFA was also emphasized in this Court's ruling in Deutsche Gesellschaft:
It is to be recalled that the Labor Arbiter, in both of his rulings, noted that it was imperative for petitioners to secure from the Department of Foreign
Affairs "a certification of respondents' diplomatic status and entitlement to diplomatic privileges including immunity from suits." The requirement might not
necessarily be imperative. However, had GTZ obtained such certification from the DFA, it would have provided factual basis for its claim of immunity that
would, at the very least, establish a disputable evidentiary presumption that the foreign party is indeed immune which the opposing party will have to
overcome with its own factual evidence. We do not see why GTZ could not have secured such certification or endorsement from the DFA for purposes
of this case. Certainly, it would have been highly prudential for GTZ to obtain the same after the Labor Arbiter had denied the motion to dismiss. Still, even
at this juncture, we do not see any evidence that the DFA, the office of the executive branch in charge of our diplomatic relations, has indeed endorsed
GTZ's claim of immunity. It may be possible that GTZ tried, but failed to secure such certification, due to the same concerns that we have discussed herein.

Would the fact that the Solicitor General has endorsed GTZ's claim of State's immunity from suit before this Court sufficiently substitute for the
DFA certification? Note that the rule in public international law quoted in Holy See referred to endorsement by the Foreign Office of the State where
the suit is filed, such foreign office in the Philippines being the Department of Foreign Affairs. Nowhere in the Comment of the OSG is it manifested that
the DFA has endorsed GTZ's claim, or that the OSG had solicited the DFA's views on the issue. The arguments raised by the OSG are virtually the same as
 the arguments raised by GTZ without any indication of any special and distinct perspective maintained by the Philippine government on the issue. The
Comment filed by the OSG does not inspire the same degree of confidence as a certification from the DFA would have elicited. 46 (Emphasis supplied.)

In the case at bar, CNMEG offers the Certification executed by the Economic and Commercial Office of the Embassy of the People's Republic of China, stating that
the Northrail Project is in pursuit of a sovereign activity. 47 Surely, this is not the kind of certification that can establish CNMEG's entitlement to immunity from suit, as Holy
See unequivocally refers to the determination of the "Foreign Office of the state where it is sued." CAcDTI
Further, CNMEG also claims that its immunity from suit has the executive endorsement of both the OSG and the Office of the Government Corporate Counsel (OGCC),
which must be respected by the courts. However, as expressly enunciated in Deutsche Gesellschaft, this determination by the OSG, or by the OGCC for that matter, does not
inspire the same degree of confidence as a DFA certification. Even with a DFA certification, however, it must be remembered that this Court is not precluded from making an
inquiry into the intrinsic correctness of such certification.
D.An agreement to submit any
dispute to arbitration may be
construed as an implicit waiver
of immunity from suit.
In the United States, the Foreign Sovereign Immunities Act of 1976 provides for a waiver by implication of state immunity. In the said law, the agreement to submit
disputes to arbitration in a foreign country is construed as an implicit waiver of immunity from suit. Although there is no similar law in the Philippines, there is reason to apply
the legal reasoning behind the waiver in this case.
The Conditions of Contract, 48 which is an integral part of the Contract Agreement, 49 states:
33. SETTLEMENT OF DISPUTES AND ARBITRATION

33.1. Amicable Settlement

Both parties shall attempt to amicably settle all disputes or controversies arising from this Contract before the commencement of arbitration.

33.2. Arbitration

All disputes or controversies arising from this Contract which cannot be settled between the Employer and the Contractor shall be submitted to
arbitration in accordance with the UNCITRAL Arbitration Rules at present in force and as may be amended by the rest of this Clause. The appointing authority
shall be Hong Kong International Arbitration Center. The place of arbitration shall be in Hong Kong at Hong Kong International Arbitration Center
(HKIAC). HAICET

Under the above provisions, if any dispute arises between Northrail and CNMEG, both parties are bound to submit the matter to the HKIAC for arbitration. In case
the HKIAC makes an arbitral award in favor of Northrail, its enforcement in the Philippines would be subject to the Special Rules on Alternative Dispute Resolution (Special
Rules). Rule 13 thereof provides for the Recognition and Enforcement of a Foreign Arbitral Award. Under Rules 13.2 and 13.3 of the Special Rules, the party to arbitration
wishing to have an arbitral award recognized and enforced in the Philippines must petition the proper regional trial court (a) where the assets to be attached or levied upon
is located; (b) where the acts to be enjoined are being performed; (c) in the principal place of business in the Philippines of any of the parties; (d) if any of the parties is an
individual, where any of those individuals resides; or (e) in the National Capital Judicial Region.
From all the foregoing, it is clear that CNMEG has agreed that it will not be afforded immunity from suit. Thus, the courts have the competence and jurisdiction to
ascertain the validity of the Contract Agreement.
Second issue: Whether the Contract
Agreement is an executive agreement
Article 2 (1) of the Vienna Convention on the Law of Treaties (Vienna Convention) defines a treaty as follows:
[A]n 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.

In Bayan Muna v. Romulo, this 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. 50
 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.
A.CNMEG is neither a government
nor a government agency.
The Contract Agreement was not concluded between the Philippines and China, but between Northrail and CNMEG. 51 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. 52 Thus,
both Northrail and CNMEG entered into the Contract Agreement as entities with personalities distinct and separate from the Philippine and Chinese governments,
respectively. cCTESa
Neither can it be said that CNMEG acted as agent of the Chinese government. As previously discussed, the fact that Amb. Wang, in his letter dated 1 October
2003, 53described 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.
B.The Contract Agreement is to
be governed by Philippine law.
Article 2 of the Conditions of Contract, 54 which under Article 1.1 of the Contract Agreement is an integral part of the latter, states:
APPLICABLE LAW AND GOVERNING LANGUAGE

The contract shall in all respects be read and construed in accordance with the laws of the Philippines.

The contract shall be written in English language. All correspondence and other documents pertaining to the Contract which are exchanged by the
parties shall be written in English language.

Since the Contract Agreement explicitly provides that Philippine law shall be applicable, the parties have effectively conceded that their rights and obligations
thereunder are not governed by international law.
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.
WHEREFORE, the instant Petition is DENIED. Petitioner China National Machinery & Equipment Corp. (Group) is not entitled to immunity from suit, and the Contract
Agreement is not an executive agreement. CNMEG's prayer for the issuance of a TRO and/or Writ of Preliminary Injunction is DENIED for being moot and academic. This case
is REMANDED to the Regional Trial Court of Makati, Branch 145, for further proceedings as regards the validity of the contracts subject of Civil Case No. 06-203.
No pronouncement on costs of suit. cHSTEA
SO ORDERED.
||| (China National Machinery & Equipment Corp. v. Santamaria, G.R. No. 185572, [February 7, 2012], 681 PHIL 198-227)
 [G.R. No. 70853. March 12, 1987.]

REPUBLIC OF THE PHILIPPINES, petitioner-appellee, vs. PABLO FELICIANO and INTERMEDIATE APPELLATE COURT, respondents-appellants.

DECISION

YAP, J p:

Petitioner seeks the review of the decision of the Intermediate Appellate Court dated April 30, 1985 reversing the order of the Court of First Instance of Camarines
Sur, Branch VI, dated August 21, 1980, which dismissed the complaint of respondent Pablo Feliciano for recovery of ownership and possession of a parcel of land on the ground
of non-suability of the State. LLpr
The background of the present controversy may be briefly summarized as follows:
On January 22, 1970, respondent Feliciano filed a complaint with the then Court of First Instance of Camarines Sur against the Republic of the Philippines, represented
by the Land Authority, for the recovery of ownership and possession of a parcel of land, consisting of four (4) lots with an aggregate area of 1,364.4177 hectares, situated in
the Barrio of Salvacion, Municipality of Tinambac, Camarines Sur. Plaintiff alleged that he bought the property in question from Victor Gardiola by virtue of a Contract of Sale
dated May 31, 1952, followed by a Deed of Absolute Sale on October 30, 1954; that Gardiola had acquired the property by purchase from the heirs of Francisco Abrazado
whose title to the said property was evidenced by an informacion posesoria; that upon plaintiff's purchase of the property, he took actual possession of the same, introduced
various improvements therein and caused it to be surveyed in July 1952, which survey was approved by the Director of Lands on October 24, 1954; that on November 1, 1954,
President Ramon Magsaysay issued Proclamation No. 90 reserving for settlement purposes, under the administration of the National Resettlement and Rehabilitation
Administration (NARRA), a tract of land situated in the Municipalities of Tinambac and Siruma, Camarines Sur, after which the NARRA and its successor agency, the Land
Authority, started subdividing and distributing the land to the settlers; that the property in question, while located within the reservation established under Proclamation No.
90, was the private property of plaintiff and should therefore be excluded therefrom. Plaintiff prayed that he be declared the rightful and true owner of the property in
question consisting of 1,364.4177 hectares; that his title of ownership based on informacion posesoria of his predecessor-in-interest be declared legal, valid and subsisting
and that defendant be ordered to cancel and nullify all awards to the settlers. LLphil
The defendant, represented by the Land Authority, filed an answer, raising by way of affirmative defenses lack of sufficient cause of action and prescription.
On August 29, 1970. the trial court, through Judge Rafael S. Sison, rendered a decision declaring Lot No. 1, with an area of 701.9064 hectares, to be the private
property of the plaintiff, "being covered by a possessory information title in the name of his predecessor-in-interest" and declaring said lot excluded from the NARRA settlement
reservation. The court declared the rest of the property claimed by plaintiff, i.e. Lots 2, 3 and 4, reverted to the public domain.
A motion to intervene and to set aside the decision of August 29, 1970 was filed by eighty-six (86) settlers, together with the barrio council of Pag-asay, alleging
among other things that intervenors had been in possession of the land in question for more than twenty (20) years under claim of ownership.
On January 25, 1971, the court a quo reconsidered its decision, reopened the case and directed the intervenors to file their corresponding pleadings and present
their evidence; all evidence already presented were to remain but plaintiff, as well as the Republic of the Philippines, could present additional evidence if they so desire.
The plaintiff presented additional evidence on July 30, 1971, and the case was set for hearing for the reception of intervenors' evidence on August 30 and August 31, 1971.
On August 30, 1971, the date set for the presentation of the evidence for intervenors, the latter did not appear but submitted a motion for postponement and
resetting of the hearing on the next day, August 31, 1971. The trial court denied the motion for postponement and allowed plaintiff to offer his evidence "en ausencia," after
which the case would be deemed submitted for decision. On the following day, August 31, 1971, Judge Sison rendered a decision reiterating his decision of August 29,
1970. prcd
A motion for reconsideration was immediately filed by the intervenors. But before this motion was acted upon, plaintiff filed a motion for execution, dated November
18, 1971. On December 10, 1971, the lower court, this time through Judge Miguel Navarro, issued an order denying the motion for execution and setting aside the order
denying intervenors' motion for postponement. The case was reopened to allow intervenors to present their evidence. Unable to secure a reconsideration of Judge Navarro's
order, the plaintiff went to the Intermediate Appellate Court on a petition for certiorari. Said petition was, however, denied by the Intermediate Appellate Court, and
petitioners brought the matter to this Court in G.R. No. 36163, which was denied on May 3, 1973 Consequently, the case was remanded to the court a quo for further
proceedings.
On August 31, 1970, intervenors filed a motion to dismiss, principally on the ground that the Republic of the Philippines cannot be sued without its consent and hence
the action cannot prosper. The motion was opposed by the plaintiff.
On August 21, 1980, the trial court, through Judge Esteban Lising, issued the questioned order dismissing the case for lack of jurisdiction. Respondent moved for
reconsideration, while the Solicitor General, on behalf of the Republic of the Philippines filed its opposition thereto, maintaining that the dismissal was proper on the ground
of non-suability of the State and also on the ground that the existence and or authenticity of the purported possessory information title of the respondents' predecessor-in-
interest had not been demonstrated and that at any rate, the same is not evidence of title, or if it is, its efficacy has been lost by prescription and laches. LexLib
Upon denial of the motion for reconsideration, plaintiff again went to the Intermediate Appellate Court on petition for certiorari. On April 30, 1985, the respondent
appellate court rendered its decision reversing the order of Judge Lising and remanding the case to the court a quo for further proceedings. Hence this petition.
We find the petition meritorious. The doctrine of non-suability of the State has proper application in this case. The plaintiff has impleaded the Republic of the
Philippines as defendant in an action for recovery of ownership and possession of a parcel of land, bringing the State to court just like any private person who is claimed to
be usurping a piece of property. A suit for the recovery of property is not an action in rem, but an action in personam. 1 It is an action directed against a specific party or
parties, and any judgment therein binds only such party or parties. The complaint filed by plaintiff, the private respondent herein, is directed against the Republic of the
Philippines, represented by the Land Authority, a governmental agency created by Republic Act No. 3844.
By its caption and its allegation and prayer, the complaint is clearly a suit against the State, which under settled jurisprudence is not permitted, except upon a
showing that the State has consented to be sued, either expressly or by implication through the use of statutory language too plain to be misinterpreted. 2 There is no such
showing in the instant case. Worse, the complaint itself fails to allege the existence of such consent. This is a fatal defect, 3 and on this basis alone, the complaint should
have been dismissed.
The failure of the petitioner to assert the defense of immunity from suit when the case was tried before the court a quo, as alleged by private respondent, is not
fatal. It is now settled that such defense "may be invoked by the courts sua sponte at any stage of the proceedings." 4
Private respondent contends that the consent of petitioner may be read from the Proclamation itself, when it established the reservation "subject to private rights,
if any there be." We do not agree. No such consent can be drawn from the language of the Proclamation. The exclusion of existing private rights from the reservation
established by Proclamation No. 90 can not be construed as a waiver of the immunity of the State from suit. Waiver of immunity, being a derogation of sovereignty, will not
be inferred lightly, but must be construed in strictissimi juris. 5 Moreover, the Proclamation is not a legislative act. The consent of the State to be sued must emanate from
statutory authority. Waiver of State immunity can only be made by an act of the legislative body. prcd
Neither is there merit in respondent's submission. which the respondent appellate court sustained, on the basis of our decision in the Begosa case, 6 that the present
action is not a suit against the State within the rule of State immunity from suit, because plaintiff does not seek to divest the Government of any of its lands or its funds. It
is contended that the complaint involves land not owned by the State, but private land belonging to the plaintiff, hence the Government is not being divested of any of its
properties. There is some sophistry involved in this argument, since the character of the land sought to be recovered still remains to be established, and the plaintiff's action
is directed against the State precisely to compel the latter to litigate the ownership and possession of the property. In other words, the plaintiff is out to establish that he is
the owner of the land in question based, incidentally, on an informacion posesoria of dubious value, and he seeks to establish his claim of ownership by suing the Republic of
the Philippines in an action in personam.
The inscription in the property registry of an informacion posesoria under the Spanish Mortgage Law was a means provided by the law then in force in the Philippines
prior to the transfer of sovereignty from Spain to the United States of America, to record a claimant's actual possession of a piece of land, established through an ex
parte proceeding conducted in accordance with prescribed rules. 7 Such inscription merely furnishes, at best, prima facie evidence of the fact that at the time the proceeding
was held, the claimant was in possession of the land under a claim of right as set forth in his application. 8 The possessory information could ripen into a record of ownership
after the lapse of 20 years (later reduced to 10 years), upon the fulfillment of the requisites prescribed in Article 393 of the Spanish Mortgage Law. 9
There is no showing in the case at bar that the informacion posesoria held by the respondent had been converted into a record of ownership. Such possessory
information, therefore, remained at best mere prima facie evidence of possession. Using this possessory information, the respondent could have applied for judicial
confirmation of imperfect title under the Public Land Act, which is an action in rem. However, having failed to do so, it is rather late for him to pursue this avenue at this
time. Respondent must also contend, as the records disclose, with the fact admitted by him and stated in the decision of the Court a quo that settlers have been occupying
and cultivating the land in question since even before the outbreak of the war, which puts in grave doubt his own claim of possession. cdll
Worthy of note is the fact, as pointed out by the Solicitor General, that the informacion posesoria registered in the Office of the Register of Deed of Camarines Sur
on September 23, 1952 was a "reconstituted" possessory information; it was "reconstituted from the duplicate presented to this office (Register of Deeds) by Dr. Pablo
 Feliciano," without the submission of proof that the alleged duplicate was authentic or that the original thereof was lost. Reconstitution can be validly made only in case of
loss of the original. 10 These circumstances raise grave doubts as to the authenticity and validity of the "informacion posesoria" relied upon by respondent Feliciano. Adding
to the dubiousness of said document is the fact that "possessory information calls for an area of only 100 hectares," 11 whereas the land claimed by respondent Feliciano
comprises 1,364.4177 hectares, later reduced to 701.9064 hectares. Courts should be wary in accepting "possessory information" documents, as well as other purportedly old
Spanish titles, as proof of alleged ownership of lands.
WHEREFORE, judgment is hereby rendered reversing and setting aside the appealed decision of the Intermediate Appellate Court, dated April 30, 1985, and affirming
the order of the court a quo, dated August 21, 1980, dismissing the complaint filed by respondent Pablo Feliciano against the Republic of the Philippines. No costs. cdphil
SO ORDERED.
||| (Republic v. Feliciano, G.R. No. 70853, [March 12, 1987], 232 PHIL 391-399)
 [G.R. No. L-35645. May 22, 1985.]

UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT GOHIER, petitioners, vs. HON. V.M. RUIZ, Presiding Judge of
Branch XV, Court of First Instance of Rizal and ELIGIO DE GUZMAN & CO., INC., respondents.

Sycip, Salazar, Luna & Manalo & Feliciano Law Office for petitioners.
Albert, Vergara, Benares, Perlas & Dominguez Law Office for respondents.

DECISION

ABAD SANTOS, J p:

This is a petition to review, set aside certain orders and restrain the respondent judge from trying Civil Case No. 779-M of the defunct Court of First Instance of Rizal.
The factual background is as follows:
At times material to this case, the United States of America had a naval base in Subic, Zambales. The base was one of those provided in the Military Bases Agreement
between the Philippines and the United States.
Sometime in May, 1972, the United States invited the submission of bids for the following projects:
1. Repair fender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to shoreline revetment, NAVBASE Subic; and repair to Leyte Wharf approach,
NAVBASE Subic Bay, Philippines. LLpr
Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequent thereto, the company received from the United States two telegrams
requesting it to confirm its price proposals and for the name of its bonding company. The company complied with the requests. [In its complaint, the company alleges that
the United States had accepted its bids because "A request to confirm a price proposal confirms the acceptance of a bid pursuant to defendant United States' bidding practices."
(Rollo, p. 30.) The truth of this allegation has not been tested because the case has not reached the trial stage.]
In June, 1972, the company received a letter which was signed by William I. Collins, Director, Contracts Division, Naval Facilities Engineering Command, Southwest
Pacific, Department of the Navy of the United States, who is one of the petitioners herein. The letter said that the company did not qualify to receive an award for the
projects because of its previous unsatisfactory performance rating on a repair contract for the sea wall at the boat landings of the U.S. Naval Station in Subic Bay. The letter
further said that the projects had been awarded to third parties.
In the abovementioned Civil Case No. 779-M, the company sued the United States of America and Messrs. James E. Galloway, William I. Collins and Robert Gohier all
members of the Engineering Command of the U.S. Navy. The complaint is to order the defendants to allow the plaintiff to perform the work on the projects and, in the event
that specific performance was no longer possible, to order the defendants to pay damages. The company also asked for the issuance of a writ of preliminary injunction to
restrain the defendants from entering into contracts with third parties for work on the projects.
The defendants entered their special appearance "for the purpose only of questioning the jurisdiction of this court over the subject matter of the complaint and the
persons of defendants, the subject matter of the complaint being acts and omissions of the individual defendants as agents of defendant United States of America, a foreign
sovereign which has not given her consent to this suit or any other suit for the causes of action asserted in the complaint." (Rollo, p. 50.)
Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the issuance of the writ of preliminary injunction. The company
opposed the motion. The trial court denied the motion and issued the writ. The defendants moved twice to reconsider but to no avail. Hence the instant petition which seeks
to restrain perpetually the proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the trial court.
 The petition is highly impressed with merit. LexLib
The traditional rule of State immunity exempts 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 now
the rule in the United States, the United Kingdom and other states in western Europe. (See Coquia and Defensor-Santiago, Public International Law, pp. 207-209
[1984].) 2006cdtai
The respondent judge recognized the restrictive doctrine of State immunity when he said in his Order denying the defendants' (now petitioners) motion: "A distinction
should be made between a strictly governmental function of the sovereign state from its private, proprietary or non-governmental acts." (Rollo, p. 20.) However, the
respondent judge also said: "It is the Court's considered opinion that entering into a contract for the repair of wharves or shoreline is certainly not a governmental function
altho it may partake of a public nature or character. As aptly pointed out by plaintiff's counsel in his reply citing the ruling in the case of Lyons, Inc., [104 Phil. 594 (1958)],
and which this Court quotes with approval, viz.:
'It is however contended that when a sovereign state enters into a contract with a private person, the state can be sued upon the theory that it has
descended to the level of an individual from which it can be implied that it has given its consent to be sued under the contract. . . .

xxx xxx xxx

'We agree to the above contention, and considering that the United States government, through its agency at Subic Bay, entered into a contract
with appellant for stevedoring and miscellaneous labor services within the Subic Bay Area, a U.S. Naval Reservation, it is evident that it can bring an action
before our courts for any contractual liability that political entity may assume under the contract. The trial court, therefore, has jurisdiction to entertain
this case . . .'" (Rollo, pp. 20-21.)

The reliance placed on Lyons by the respondent judge is misplaced for the following reasons:
In Harry Lyons, Inc. vs. The United States of America supra, plaintiff brought suit in the Court of First Instance of Manila to collect several sums of money on account
of a contract between plaintiff and defendant. The defendant filed a motion to dismiss on the ground that the court had no jurisdiction over defendant and over the subject
matter of the action. The court granted the motion on the grounds that: (a) it had no jurisdiction over the defendant who did not give its consent to the suit; and (b) plaintiff
failed to exhaust the administrative remedies provided in the contract. The order of dismissal was elevated to this Court for review. cdrep
In sustaining the action of the lower court, this Court said:
"It appearing in the complaint that appellant has not complied with the procedure laid down in Article XXI of the contract regarding the prosecution
of its claim against the United States Government, or, stated differently, it has failed to first exhaust its administrative remedies against said Government,
the lower court acted properly in dismissing this case." (At p. 598.)

It can thus be seen that the statement in respect of the waiver of State immunity from suit was purely gratuitous and, therefore, obiter so that it has no value as an
imperative authority.
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. In this case the projects are an
integral part of the naval base which is devoted to the defense of both the United States and the Philippines, indisputably a function of the government of the highest order;
they are not utilized for nor dedicated to commercial or business purposes.
That the correct test for the application of State immunity is not the conclusion of a contract by a State but the legal nature of the act is shown in Syquia vs.
Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased three apartment buildings to the United States of America for the use of its military officials. The plaintiffs sued
to recover possession of the premises on the ground that the term of the leases had expired, They also asked for increased rentals until the apartments shall have been
vacated.
The defendants who were armed forces officers of the United States moved to dismiss the suit for lack of jurisdiction on the part of the court. The Municipal Court
of Manila granted the motion to dismiss; sustained by the Court of First Instance, the plaintiffs went to this Court for review on certiorari. In denying the petition, this Court
said:
 "On the basis of the foregoing considerations we are of the belief and we hold that the real party defendant in interest is the Government of the
United States of America; that any judgment for back or increased rentals or damages will have to be paid not by defendants Moore and Tillman and their 64
co-defendants but by the said U.S. Government. On the basis of the ruling in the case of Land vs. Dollar already cited, and on what we have already stated,
the present action must be considered as one against the U.S. Government. 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." (At p. 323.) LLphil

In Syquia, the United States concluded contracts with private individuals but the contracts notwithstanding the United States was not deemed to have given or waived
its consent to be sued for the reason that the contracts were for jure imperii and not for jure gestionis.
WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil Case No. 779-M is dismissed. Costs against the private
respondent.
SO ORDERED.
Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana, Escolin, Relova Gutierrez, Jr., De la Fuente, Cuevas and Alampay, JJ., concur.
Fernando, C.J., took no part.

Separate Opinions

MAKASIAR, J., dissents:

The petition should be dismissed and the proceedings in Civil Case No. 779-M in the defunct CFI (now RTC) of Rizal be allowed to continue therein.
In the case of Lyons vs. the United States of America (104 Phil. 593), where the contract entered into between the plaintiff (Harry Lyons, Inc.) and the defendant
(U.S. Government) involved stevedoring and labor services within the Subic Bay area, this Court further stated that inasmuch as ". . . the United States Government, through
its agency at Subic Bay, entered into a contract with appellant for stevedoring and miscellaneous labor services within the Subic Bay area, a U.S. Navy Reservation, it is
evident that it can bring an action before our courts for any contractual liability that political entity may assume under the contract."
When the U.S. Government, through its agency at Subic Bay, confirmed the acceptance of a bid of a private company for the repair of wharves or shoreline in the
Subic Bay area, it is deemed to have entered into a contract and thus waived the mantle of sovereign immunity from suit and descended to the level of the ordinary citizen.
Its consent to be sued, therefore, is implied from its act of entering into a contract (Santos vs. Santos, 92 Phil. 281, 284).
Justice and fairness dictate that a foreign government that commits a breach of its contractual obligation — in the case at bar by the unilateral cancellation of the
award for the project by the United States government, through its agency at Subic Bay — should not be allowed to take undue advantage of a party who may have legitimate
claims against it by seeking refuge behind the shield of non-suability. A contrary view would render a Filipino citizen, as in the instant case, helpless and without redress in
his own country for violation of his rights committed by the agents of the foreign government professing to act in its name. cdll
Appropriate are the words of Justice Perfecto in his dissenting opinion in Syquia vs. Almeda Lopez, 84 Phil. 312, 325:
"Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice, such rule is inapplicable to cases in which the
foreign government enters into private contracts with the citizens of the court's jurisdiction. A contrary view would simply run against all principles of
decency and violative of all tenets of morals.

"Moral principles and principles of justice are as valid and applicable as well with regard to private individuals as with regard to governments either
domestic or foreign. Once a foreign government enters into a private contract with the private citizens of another country, such foreign government cannot
shield its non-performance or contravention of the terms of the contract under the cloak of non-jurisdiction. To place such foreign government beyond the
jurisdiction of the domestic courts is to give approval to the execution of unilateral contracts, graphically described in Spanish as 'contratos leoninos,'
because one party gets the lion's share to the detriment of the other. To give validity to such contract is to sanctify bad faith, deceit, fraud. We prefer to
 adhere to the thesis that all parties in a private contract, including governments and the most powerful of them, are amenable to law, and that such
contracts are enforceable through the help of the courts of justice with jurisdiction to take cognizance of any violation of such contracts if the same had
been entered into only by private individuals."

Constant resort by a foreign state or its agents to the doctrine of State immunity in this jurisdiction impinges unduly upon our sovereignty and dignity as a nation. Its
application will particularly discourage Filipino or domestic contractors from transacting business and entering into contracts with United States authorities or facilities in the
Philippines — whether naval, air or ground forces — because the difficulty, if not impossibility, of enforcing a validly executed contract and of seeking judicial remedy in our
own courts for breaches of contractual obligation committed by agents of the United States government, always looms large, thereby hampering the growth of Filipino
enterprises and creating a virtual monopoly in our own country by United States contractors of contracts for services or supplies with the various U.S. offices and agencies
operating in the Philippines.
The sanctity of upholding agreements freely entered into by the parties cannot be over emphasized. Whether the parties are nations or private individuals, it is to
be reasonably assumed and expected that the undertakings in the contract will be complied with in good faith.
One glaring fact of modern day civilization is that a big and powerful nation, like the United States of America, can always overwhelm small and weak nations. The
declaration in the United Nations Charter that its member states are equal and sovereign, becomes hollow and meaningless because big nations wielding economic and military
superiority impose upon and dictate to small nations, subverting their sovereignty and dignity as nations. Thus, more often than not, when U.S. interest clashes with the
interest of small nations, the American governmental agencies or its citizens invoke principles of international law for their own benefit.
In the case at bar, the efficacy of the contract between the U.S. Naval authorities at Subic Bay on one hand, and herein private respondent on the other, was honored
more in the breach than in the compliance. The opinion of the majority will certainly open the floodgates of more violations of contractual obligations. American authorities
or any foreign government in the Philippines for that matter, dealing with the citizens of this country, can conveniently seek protective cover under the majority opinion.
The result is disastrous to the Philippines. LibLex
This opinion of the majority manifests a neo-colonial mentality. It fosters economic imperialism and foreign political ascendancy in our Republic.
The doctrine of government immunity from suit cannot and should not serve as an instrument for perpetrating an injustice on a citizen (Amigable vs. Cuenca, L-
26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of First Instance, L-31635, August 31, 1971, 40 SCRA 464).
Under the doctrine of implied waiver of its non-suability, the United States government, through its naval authorities at Subic Bay, should be held amenable to
lawsuits in our country like any other juristic person.
The invocation by the petitioner United States of America is not in accord with paragraph 3 of Article III of the original RP-US Military Bases Agreement of March 14,
1947, which states that "in the exercise of the above-mentioned rights, powers and authority, the United States agrees that the powers granted to it will not be used
unreasonably. . . ." (italics supplied).
Nor is such posture of the petitioners herein in harmony with the amendment dated May 27, 1968 to the aforesaid RP-US Military Bases Agreement, which recognizes
"the need to promote and maintain sound employment practices which will assure equality of treatment of all employees . . . and continuing favorable employer-employee
relations . . ." and "(B)elieving that an agreement will be mutually beneficial and will strengthen the democratic institutions cherished by both Governments, . . . the United
States Government agrees to accord preferential employment of Filipino citizens in the Bases, thus (1) the U.S. Forces in the Philippines shall fill the needs for civilian
employment by employing Filipino citizens, etc." (Par. 1, Art. I of the Amendment of May 27, 1968).
Neither does the invocation by petitioners of state immunity from suit express fidelity to paragraph 1 of Article IV of the aforesaid amendment of May 27, 1968 which
directs that "contractors and concessionaires performing work for the U.S. Armed Forces shall be required by their contract or concession agreements to comply with all
applicable Philippine labor laws and regulations," even though paragraph 2 thereof affirms that "nothing in this Agreement shall imply any waiver by either of the two
Governments of such immunity under international law."
Reliance by petitioners on the non-suability of the United States Government before the local courts, actually clashes with No. III on respect for Philippine law of the
Memorandum of Agreement signed on January 7, 1979, also amending RP-US Military Bases Agreement, which stresses that "it is the duty of members of the United States
Forces, the civilian component and their dependents, to respect the laws of the Republic of the Philippines and to abstain from any activity inconsistent with the spirit of
the Military Bases Agreement and, in particular, from any political activity in the Philippines. The United States shall take all measures within its authority to insure that
they adhere to them" (italics supplied). cdll
The foregoing duty imposed by the amendment to the Agreement is further emphasized by No. IV on the economic and social improvement of areas surrounding the
bases, which directs that "moreover, the United States Forces shall procure goods and services in the Philippines to the maximum extent feasible" (italics supplied).
 Under No. VI on labor and taxation of the said amendment of January 6, 1979 in connection with the discussions on possible revisions or alterations of the Agreement
of May 27, 1968, "the discussions shall be conducted on the basis of the principles of equality of treatment, the right to organize, and bargain collectively, and respect for
the sovereignty of the Republic of the Philippines" (italics supplied).
The majority opinion seems to mock the provision of paragraph 1 of the joint statement of President Marcos and Vice-President Mondale of the United States dated
May 4, 1978 that "the United States re-affirms that Philippine sovereignty extends over the bases and that Its base shall be under the command of a Philippine Base
Commander," which is supposed to underscore the joint Communique of President Marcos and U.S. President Ford of December 7, 1975, under which "they affirm that
sovereign equality, territorial integrity and political independence of all States are fundamental principles which both countries scrupulously respect; and that "they confirm
that mutual respect for the dignity of each nation shall characterize their friendship as well as the alliance between their two countries."
The majority opinion negates the statement on the delineation of the powers, duties and responsibilities of both the Philippine and American Base Commanders that
"in the performance of their duties, the Philippine Base Commander and the American Base Commander shall be guided by full respect for Philippine sovereignty on the one
hand and the assurance of unhampered U.S. military operations on the other hand;" and that "they shall promote cooperation, understanding and harmonious relations within
the Base and with the general public in the proximate vicinity thereof" (par. 2 & par. 3 of the Annex covered by the exchange of notes, January 7, 1979, between Ambassador
Richard W. Murphy and Minister of Foreign Affairs Carlos P. Romulo, italics supplied).

||| (US v. V.M. Ruiz, G.R. No. L-35645, [May 22, 1985], 221 PHIL 179-191)