Sovereignty
Not all acts of the state are carried out
1. "Sovereignty is the supreme and
uncontrollable power inherent in a
State by which the State is governed.
"The supreme power of the State to
govern persons and things within its
territory. There are two kinds of
sovereignty, to wit, legal and political.
Legal sovereignty is the authority
which has the power to issue final
commands whereas political
sovereignty is the power behind the
legal sovereign, or the sum total of the
influences that operate upon it.
2. Sovereignty may also be internal or
external. Internal sovereignty refers
to the power of the State to control its
domestic affairs. External
sovereignty, w/c is the power of the
State to direct its relations w/ other
States, is also known as independence.
xxx" (Cruz.)
3. 'Theory of Auto-Limitation' is the
property of the State-force due to
which a State has exclusive legal
competence of self-limitation and self-
restriction.
4. In Reagan v CIR, it was held that the
provision in the military bases
agreement giving the US criminal
jurisdiction over crimes committed
even by Filipinos inside the bases is
not a derogation of Philippine
sovereignty. The Philippines has the
power to limit the exercise of its
sovereignty. When it allows a foreign
State to use part of its territory and
waives jurisdiction over crimes
committed therein, it does not give up
part of its sovereignty but only limits
the exercise of its sovereignty."
5.
in its sovereign capacity.
Jurisprudence and several authors
tried to distinguish various acts of the
state.
6. Dominium and Imperium. Imperium
refers to the State's authority to
govern. It covers such activities as
passing laws governing a territory,
maintaining peace and order over it,
and defending it against foreign
invasion. When the State act in this
capacity jure imperii, it generally
enjoys sovereign immunity.
Dominium refers to the capacity of the
State to own property. It covers such
rights as title to land, exploitation and
use of it, and disposition or sale of the
same. The Regalian doctrine whereby
all lands of the public domain belong
to the State, and anyone claiming title
has the burden to show ownership,
comes within this concept. In this
capacity jure gestium, the State
descends to the status of ordinary
persons and thus becomes liable as
such."
7. In Fontanilla vs. Maliaman (1991), the
functions of the state are classified
into governmental or constituent and
proprietary or ministrant. The former
involves the exercise of sovereignty
and considered as compulsory; the
latter connotes merely the exercise of
proprietary functions and thus
considered as optional.
8. One manifestation of sovereignty is
jurisdiction. It could either be
territorial, personal and extra-
territorial. The jurisdiction of the state
is understood as both its authority and
the sphere of the exercise of that
authority.
9. Territorial jurisdiction is the authority
of the State to have all persons and
things within its territorial limits to be
completely subject to its control and
protection. The territorial jurisdiction
of a state is sovereignty operating or
applied w/in its territory. Its scope
and effect are expressed in this classic
statement of Chief Justice Marshall on
the subject: "The jurisdiction of the
nation w/in its own territory is
necessarily exclusive and absolute. It
is susceptible of no limitation not
imposed by itself. Any restriction
upon it, deriving validity from an
external source, would imply a
diminution of its sovereignty to the
extent of the restriction, and an
investment of that sovereignty to the
same extent in that power w/c would
impose such restriction. All
exceptions, therefore, to the full and
complete power of a nation w/in its
own territories, must be traced up to
the consent of the nation itself. They
can flow from no other legitimate
source. This consent may be either
express or implied." (Sinco 26-27.)
10. Personal jurisdiction is the authority
of the state over its nationals, their
persons, property, and acts, whether
within or outside its territory. The
Civil Code provision that prohibitory
and mandatory laws follow citizens
wherever they go is an example.
When jurisdiction is exercised on the
basis of the status of the persons
affected, independent of their
presence or absence in the territory of
the state, it is known as personal
jurisdiction. The personal jurisdiction
of the state is exercised over all its
citizens w/in or w/o its territory. It
affects their person, property, and
even some of their acts performed
abroad. The authority of the state to
w/c they owe permanent allegiance
follows them at all times wherever
they might reside and as long as their
membership of the state subsists.
11. Extraterritorial jurisdiction is the
authority of the State over persons,
things or acts, outside its territorial
limits by reason of their effects to its
territory. Art. 2 of the RPC is a
classic example of this. By agreement
w/ other states, a state may establish
its legal institutions outside its
territorial limits. Thus if a state does
not have sufficient confidence in the
administration of justice and the
system of law obtaining in a particular
country, it may enter into a treaty for
the establishment of its own courts in
the latter country where its citizens or
nationals may be tried.
12. Sovereign Immunity. Another
manifestation of sovereignty. It has
basis under the Constitution and
jurisprudence. Constitutionally, Art.
XVI, Sec. 3 provides: The State may
not be sued without its consent. On
the one hand, jurisprudence subscribes
to two schools of thought. First is the
Positivist theory: There can be no
legal right as against the authority that
makes the laws on which the right
depends. Second is the Sociological
theory: If the State is amenable to
suits, all its time would be spent
defending itself from suits and this
would prevent it from performing its
other functions. (Republic v Villasor,
54 SCRA 83).
13. The doctrine is also available to
foreign States insofar as they are
sought to be sued in the courts of the
local State. The added basis in this
case is the principle of the sovereign
equality of States, under w/c one State
cannot assert jurisdiction over another
in violation of the maxim par in parem
 non habet imperium. To do so would
"unduly vex the peace of nations."
(Cruz.)
14. DOH vs. Phil Pharma Wealth,
(2013), explained the “doctrine of
non-suability”. The basic postulate
enshrined in the constitution that
‘(t)he State may not be sued without
its consent,’ reflects nothing less than
a recognition of the sovereign
character of the State and an express
affirmation of the unwritten rule
effectively insulating it from the
jurisdiction of courts. It is based on
the very essence of sovereignty. x x x
[A] sovereign is exempt from suit, not
because of any formal conception or
obsolete theory, but on the logical and
practical ground that there can be no
legal right as against the authority that
makes the law on which the right
depends. True, the doctrine, not too
infrequently, is derisively called ‘the
royal prerogative of dishonesty’
because it grants the state the
prerogative to defeat any legitimate
claim against it by simply invoking its
non-suability. We have had occasion
to explain in its defense, however, that
a continued adherence to the doctrine
of non-suability cannot be deplored,
for the loss of governmental
efficiency and the obstacle to the
performance of its multifarious
functions would be far greater in
severity than the inconvenience that
may be caused private parties, if such
fundamental principle is to be
abandoned and the availability of
judicial remedy is not to be
accordingly restricted.
15. The rule, in any case, is not really
absolute for it does not say that the
state may not be sued under any
circumstance. On the contrary, as
correctly phrased, the doctrine only
conveys, ‘the state may not be sued
without its consent;’ its clear import
then is that the State may at times be
sued.
16. The State’s consent may be given
either expressly or impliedly.
Express consent may be made through
a general law or a special law. x x x
Implied consent, on the other hand, is
conceded when the State itself
commences litigation, thus opening
itself to a counterclaim or when it
enters into a contract. In this situation,
the government is deemed to have
descended to the level of the other
contracting party and to have divested
itself of its sovereign immunity. This
rule, x x x is not, however, without
qualification. Not all contracts
entered into by the government
operate as a waiver of its non-
suability; distinction must still be
made between one which is
executed in the exercise of its
sovereign function and another
which is done in its proprietary
capacity.
17. As a general rule, a state may not be
sued. However, if it consents, either
expressly or impliedly, then it may be
the subject of a suit. There is express
consent when a law, either special or
general, so provides. On the other
hand, there is implied consent when
the state "enters into a contract or it
itself commences
litigation." However, it must be
clarified that when a state enters into a
contract, it does not automatically
mean that it has waived its non-
suability.  The State "will be deemed
to have impliedly waived its non-
suability [only] if it has entered into a
contract in its proprietary or private
capacity. [However,] when the
contract involves its sovereign or
 governmental capacity[,] x x x no
such waiver may be
implied." "Statutory provisions
waiving [s]tate immunity are
construed in strictissimi juris. For,
waiver of immunity is in derogation of
sovereignty."
18. The DOH can validly invoke state
immunity. First, DOH is an
unincorporated agency which
performs sovereign or governmental
functions. In this case, the DOH,
being an "unincorporated agency of
the government" can validly invoke
the defense of immunity from suit
because it has not consented, either
expressly or impliedly, to be sued.
Significantly, the DOH is an
unincorporated agency which
performs functions of governmental
character.
19. The ruling in Air Transportation
Office v. Ramos is relevant, viz: An
unincorporated government agency
without any separate juridical
personality of its own enjoys
immunity from suit because it is
invested with an inherent power of
sovereignty. Accordingly, a claim for
damages against the agency cannot
prosper; otherwise, the doctrine of
sovereign immunity is violated.
However, the need to distinguish
between an unincorporated
government agency performing
governmental function and one
performing proprietary functions has
arisen. The immunity has been upheld
in favor of the former because its
function is governmental or incidental
to such function; it has not been
upheld in favor of the latter whose
function was not in pursuit of a
necessary function of government but
was essentially a business.
20. The Complaint seeks to hold the
DOH solidarily and jointly liable
with the other defendants for
damages which constitutes a charge
or financial liability against the state.
Moreover, it is settled that if a
Complaint seeks to "impose a charge
or financial liability against the
state," the defense of non-suability
may be properly invoked. In this case,
PPI specifically prayed, in its
Complaint and Amended and
Supplemental Complaint, for the
DOH, together with Secretaries
Romualdez and Dayrit as well as
Undersecretary Galon, to be held
jointly and severally liable for moral
damages, exemplary damages,
attorney’s fees and costs of
suit.43 Undoubtedly, in the event that
PPI succeeds in its suit, the
government or the state through the
DOH would become vulnerable to an
imposition or financial charge in the
form of damages. This would require
an appropriation from the national
treasury which is precisely the
situation which the doctrine of state
immunity aims to protect the state
from.
The mantle of non-suability extends
to complaints filed against public
officials for acts done in the
performance of their official
functions.
As regards the other petitioners, to
wit, Secretaries Romualdez and
Dayrit, and Undersecretary Galon, it
must be stressed that the doctrine of
state immunity extends its protective
mantle also to complaints filed against
state officials for acts done in the
discharge and performance of their
duties.44 "The suability of a
government official depends on
whether the official concerned was
 acting within his official or
jurisdictional capacity, and whether
the acts done in the performance of
official functions will result in a
charge or financial liability against the
government." Otherwise stated,
"public officials can be held
personally accountable for acts
claimed to have been performed in
connection with official duties where
they have acted ultra vires or where
there is showing of bad
faith." Moreover, "[t]he 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 x x x.
In such a situation, the state may
move to dismiss the [C]omplaint on
the ground that it has been filed
without its consent."
21. For foreign governments, not all
acts may be covered the doctrine of
sovereign immunity. In China National
Machinery vs. Santamaria (2012):
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.
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.
The doctrine of state immunity from
suit has undergone further
metamorphosis. The view evolved that
the existence of a contract does not, per
se, mean that sovereign states may, at
all times, be sued in local courts. The
complexity of relationships between
sovereign states, brought about by their
increasing commercial activities,
mothered a more restrictive application
of the doctrine.
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).
22. A mere claim by foreign entity of
sovereign immunity is insufficient.
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.”
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 (DFA) v.
(NLRC), emphasized the DFA’s
competence and authority to provide
such necessary determination. Further,
 the fact that this authority is exclusive
to the DFA was also emphasized in this
Court’s ruling in Deutsche
Gesellschaft. 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. 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.”
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.
23. When a suit is against the State
and when not. A suit is against the
State, regardless of who is named as
the defendant, if it produces adverse
consequences to the public treasury in
terms of disbursement of public funds
and loss of government property.
When a suit is against the State, it
cannot prosper unless the State has
given its consent. In the following
cases, however, the suit is not really
against the State.
a. When the purpose of the suit is to
compel an officer charged with the
duty of making payments pursuant
to an appropriation made by law
in favor of the plaintiff to make
such payment. For in this case, the
suit is not really against the State,
the State having acknowledged its
liability to the plaintiff through the
enactment of an appropriation law.
Rather, the suit is intended to
compel performance of a ministerial
duty. (Begoso v PVA, 32 SCRA
466)
b. When from the allegations in the
complaint, it is clear that the
respondent is a public officer sued
in a private capacity. In Vicencio
vs. Villar (2012) on liability of
public officer executing contract
without authority.  Section 103 of
P.D. 1445 declares that
expenditures of government funds
or uses of government property in
violation of law or regulations shall
be a personal liability of the official
or employee found to be directly
responsible therefor.  The public
official’s personal liability arises
only if the expenditure of
government funds was made in
violation of law.  In this case,
petitioner’s act of entering into a
contract on behalf of the local
government unit without the
requisite authority therefor was in
violation of the Local Government
Code.  While petitioner may have
relied on the opinion of the City
Legal Officer, such reliance only
serves to buttress his good faith.  It
does not, however, exculpate him
from his personal liability under
P.D. 1445. 
In Philippine Agila Satellite vs.
Lichauco (2006) The complaint
alleged that since Lichaucos act of
offering and awarding orbital slot
153 East Longitude was patently
illegal and violative
of DOTCs prior commitment to
PASI, Lichauco should be enjoined
from performing any acts and
entering into or executing any
agreement or arrangement of
whatever nature in connection with
the said orbital slot. The complaint
also averred that the purported
award of the orbital slot to the
Unknown Awardee was illegal, and
thus should be declared null and
void. Finally, the complaint alleged
a cause of action for damages
against Lichauco. As to the first two
(2) causes of action, the Court rules
that the defense of state immunity
from suit do not apply since said
causes of action cannot be properly
considered as suits against the State
in constitutional contemplation.
These causes of action do not seek
to impose a charge or financial
liability against the State, but
merely the nullification of state
action. The prayers attached to
these two causes of action are for
the revocation of the Notice of Bid
and the nullification of the
purported award, nothing more.
Had it been so that petitioner
additionally sought damages in
relation to said causes of action, the
suit would have been considered as
one against the State. Had the
petitioner impleaded the DOTC
itself, an unincorporated
government agency, and
not Lichauco herself, the suit would
have been considered as one against
the State. But neither circumstance
obtains in this case. Parenthetically,
it may be noted that at the time of
the filing of the
complaint, Lichauco herself was
already the acting head of the
DOTC, owing to the sudden death
of then Secretary Enrile a few days
before. At that stage, any suit
seeking to nullify the Notice of Bid
and the alleged award to the
Unknown Bidder should have
properly denominated Lichauco as
the respondent, and not the DOTC.
Our ruling in United States of
America v. Reyes warrants due
consideration. The Court therein,
through then Associate Justice (later
Chief Justice) Hilario G. Davide,
Jr., ruled that a motion to dismiss
averring immunity from suit of a
State and its functionaries was
actually grounded on the specific
ground for dismissal of the lack of
cause of action, for even assuming
that the defendants had committed
the injurious acts complained of, no
action may be maintained thereon,
because of the principle of state
immunity. Pertinently, the Court
noted that a motion to dismiss on
the ground of failure to state a cause
of action hypothetically admits the
truth of the allegations in the
complaint.
Thus, Lichauco, in alleging in her
Motion to Dismiss that she is
shielded by the States immunity
from suit, to hypothetically
admitted the truth of the allegations
in the complaint. Such hypothetical
admission has to be deemed a
concession on her part that she had
performed the tortious or damaging
acts against the petitioners, which if
true, would hold her liable for
damages.
c. When the action is not in personam
with the government as the named
 defendant, but an action in rem that
does not name the government in
particular. In Republic v Feliciano
(148 SCRA 424), a suit against the
government for the recovery of
possession and ownership of land
based on a possessory information
was disallowed by the SC on the
ground that a suit for the recovery
of property is an action "in
personam" which seeks to bring the
State to court just like any private
person who is claimed to usurp a
piece of property. What the
plaintiff should have done, the
Court continued, was to apply for a
judicial confirmation of imperfect
title under Sec. 48(b) of CA 141,
which is an "action in rem", i.e., one
directed against the whole world,
and not the government in
particular.
d. When the action is directed against
the public official in his personal
capacity. In Shauf v CA, (1990):
Doctrine of immunity from suit will
not apply and may not be invoked
where the public official is being
sued in his private and personal
capacity as an ordinary citizen.
It is a different matter where the
public official is made to account in
his capacity as such for acts
contrary to law and injurious to the
rights of plaintiff. As was clearly
set forth by Justice Zaldivar in
Director of the Bureau of
Telecommunications, et al. vs.
Aligaen, etc., et al. : "Inasmuch as
the State authorizes only legal acts
by its officers, unauthorized acts of
government officials or officers are
not acts of the State, and an action
against the officials or officers by
one whose rights have been invaded
or violated by such acts, for the
protection of his rights, is not a suit
against the State within the rule of
immunity of the State from suit. In
the same tenor, it has been said that
an action at law or suit in equity
against a State officer or the
director of a State department on
the ground that, while claiming to
act for the State, he violates or
invades the personal and property
rights of the plaintiff, under an
unconstitutional act or under an
assumption of authority which he
does not have, is not a suit against
the State within the constitutional
provision that the State may not be
sued without its consent." The
rationale for this ruling is that the
doctrine of state immunity cannot
be used as an instrument for
perpetrating an injustice.
In Republic v Sandoval, (1993):
Public officials, having been found
to have acted beyond the scope of
their authority, may be held liable
for damages.
24. Some instances when a suit is
considered against the State are: (1)
when the Republic is sued by name;
(2) when the suit is against an
unincorporated govt. agency; (3) when
the suit is on its face against a govt.
officer but the case is such that the
ultimate liability will belong not to the
officer but to the govt.
25. ATO vs. Ramos (2011): An
unincorporated government agency
without any separate juridical
personality of its own enjoys immunity
from suit because it is invested with an
inherent power of sovereignty.
Accordingly, a claim for damages
against the agency cannot prosper;
otherwise, the doctrine of sovereign
 immunity is violated. However, the
need to distinguish between an
unincorporated government agency
performing governmental function and
one performing proprietary functions
has arisen. The immunity has been
upheld in favor of the former because
its function is governmental or
incidental to such function; it has not
been upheld in favor of the latter
whose function was not in pursuit of a
necessary function of government but
was essentially a business. ATO is an
agency of the Government not
performing a purely governmental or
sovereign function, but was instead
involved in the management and
maintenance of the Loakan Airport, an
activity that was not the exclusive
prerogative of the State in its sovereign
capacity. Hence, the ATO had no
claim to the State’s immunity from
suit. We uphold the CA’s aforequoted
holding.
26. An unincorporated government
agency without any separate juridical
personality of its own enjoys immunity
from suit because it is invested with an
inherent power of
sovereignty. Accordingly, a claim for
damages against the agency cannot
prosper; otherwise, the doctrine of
sovereign immunity is
violated. However, the need to
distinguish between an unincorporated
government agency performing
governmental function and one
performing proprietary functions has
arisen. The immunity has been upheld
in favor of the former because its
function is governmental or incidental
to such function; it has not been upheld
in favor of the latter whose function
was not in pursuit of a necessary
function of government but was
essentially a business. Should the
doctrine of sovereignty immunity or
non-suability of the State be extended
to the ATO? In our view, the CA
thereby correctly appreciated the
juridical character of the ATO as an
agency of the Government not
performing a purely governmental or
sovereign function, but was instead
involved in the management and
maintenance of the Loakan Airport, an
activity that was not the exclusive
prerogative of the State in its sovereign
capacity. Hence, the ATO had no
claim to the States immunity from suit.
We uphold the CAs aforequoted
holding.
We further observe the doctrine of
sovereign immunity cannot be
successfully invoked to defeat a valid
claim for compensation arising from
the taking without just compensation
and without the proper expropriation
proceedings being first resorted to of
the plaintiffs property. Thus, in De los
Santos v. Intermediate Appellate
Court, the trial courts dismissal based
on the doctrine of non-suability of the
State of two cases (one of which was
for damages) filed by owners of
property where a road 9 meters wide
and 128.70 meters long occupying a
total area of 1,165 square meters and
an artificial creek 23.20 meters wide
and 128.69 meters long occupying an
area of 2,906 square meters had been
constructed by the provincial engineer
of Rizal and a private contractor
without the owners knowledge and
consent was reversed and the cases
remanded for trial on the merits. The
Supreme Court ruled that the doctrine
of sovereign immunity was not an
instrument for perpetrating any
injustice on a citizen. In exercising the
right of eminent domain, the Court
explained, the State exercised its jus
imperii, as distinguished from its
proprietary rights, or jus gestionis; yet,
 even in that area, where private
property had been taken in
expropriation without just
compensation being paid, the defense
of immunity from suit could not be set
up by the State against an action for
payment by the owners. Lastly, the
issue of whether or not the ATO could
be sued without the States consent has
been rendered moot by the passage of
Republic Act No. 9497, otherwise
known as the Civil Aviation Authority
Act of 2008.
27. In Caltex Phils. Vs. Customs
Arrastre, (1969): Now, the fact that a
non-corporate government entity
performs a function proprietary in
nature does not necessarily result in its
being suable. If said non-governmental
function, is undertaken as an incident
to its governmental function, there is
no waiver thereby of the sovereign
immunity from suit extended to such
government entity. This is the doctrine
recognized in Bureau of Printing, et al.
vs. Bureau of Printing Employees
Association, et al., L-15751, January
28, 1961: The Bureau of Customs, to
repeat, is part of the Department of
Finance (Sec. 81, Rev. Adm. Code),
with no personality of its own apart
from that of the national government.
Its primary function is governmental,
that of assessing and collecting lawful
revenues from imported articles and all
other tariff and customs duties, fees,
charges, fines and penalties (Sec. 602,
R.A. 1937). To this function, arrastre
service is a necessary incident.
28. 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
w/c 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.
29. Consent to be sued. How consent
is given: The consent to be sued, in
order to be effective, must come from
the State, acting through a duly enacted
statute. Waiver of state immunity can
only be made by an act of legislative
body.
30. In Republic v Purissima, (1977), the
SC held that a contract entered into by
the Rice and Corn Administration
stipulating that in the event of breach,
action may be filed by the parties,
cannot be the basis of a money claim
against the RCA, a government entity
under the Office of the President, since
the RCA had no authority to bind the
government to be sued. Only a statute
could.
31. In Republic v Feliciano, 148 SCRA
424, the SC held that the Proclamation
of the President of the Philippines
(recognizing private rights to the land)
cannot be the source of consent, since
the Proclamation is not a legislative
act.
32. Before the 1987 Constitution, the
law in force was Act 3038 and CA 327
which, according to Sayson v Singson
(a suit to compel payment of electrical
supplies delivered to CAA), allowed
suit only for money claims arising
from contract, and providing a special
procedure. Under this procedure, the
claim must be filed with the Auditor
General (now, COA). If the Auditor
did not act within 60 days, then the
claimant could file his claim with the
RTC. But if the Auditor rendered a
decision, then the appeal could be
 made to the SC, unless the claimant
was a public official in which case
appeal was to the President.
33. Art. IX of the 1987 Constitution
now gives a different procedure. All
money claims are to be filed with
COA, which has 60 days within which
to act. If it fails to so act, the claimant
must wait anyway. Once a decision
has been made, he has, within 30 days
to appeal by certiorari to the SC.
34. In National Home mortgage vs.
Abayari (2009): the matter of allowing
or disallowing a money claim against
petitioner is within the primary power
of the COA to decide. This no doubt
includes money claims arising from the
implementation of R.A. No. 6758.
Respondents’ claim against petitioner,
although it has already been validated
by the trial court’s final decision,
likewise belongs to that class of
claims; hence, it must first be filed
with the COA before execution could
proceed. And from the decision
therein, the aggrieved party is afforded
a remedy by elevating the matter to
this Court via a petition for certiorari in
accordance with Section 1 Rule XI, of
the COA Rules of Procedure.   While the doctrine appears to prohibit
35. Arigo vs. Swift, (2014): SC
reiterated the case of United States of
America v. Judge Guinto. The rule that
a state may not be sued without its
consent, now · expressed in Article
XVI, Section 3, of the 1987
Constitution, is one of the generally
accepted principles of international law
that we have adopted as part of the law
of our land under Article II, Section 2.
x x x. 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."
[Kawanakoa v. Polybank, 205 U.S.
349] 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." [De Haber v. Queen of
Portugal, 17 Q. B. 171.
only suits against the state without its
consent, it is also applicable to
complaints filed against officials of the
state for acts allegedly performed by
them in the discharge of their duties.
The rule is that if the judgment against
such officials will require the state
itself to perform an affirmative act to
satisfy the same, such as the
appropriation of the amount needed to
pay the damages awarded against
them, the suit must be regarded as
against the state itself although it has
not been formally impleaded. [Garcia
v. Chief of Staff, 16 SCRA 120] In
such a situation, the state may move to
 dismiss the comp.taint on the ground
that it has been filed without its
consent.
The VFA is an agreement which
defines the treatment of United States
troops and personnel visiting the
Philippines to promote "common
security interests" between the US and
the Philippines in the region. It
provides for the guidelines to govern
such visits of military personnel, and
further defines the rights of the United
States and the Philippine government
in the matter of criminal jurisdiction,
movement of vessel and aircraft,
importation and exportation of
equipment, materials and supplies. The
invocation of US federal tort laws and
even common law is thus improper
considering that it is the VFA which
governs disputes involving US military
ships and crew navigating Philippine
waters in pursuance of the objectives
of the agreement.
As it is, the waiver of State immunity
under the VFA pertains only to
criminal jurisdiction and not to special
civil actions such as the present
petition for issuance of a writ of
Kalikasan. In fact, it can be inferred
from Section 17, Rule 7 of the Rules
that a criminal case against a person
charged with a violation of an
environmental law is to be filed
separately:
36. Quasi-delicts committed by special
agents. Under Art. 2180 of the Civil
Code. The obligation imposed by
article 2176 is demandable not only for
one's own acts or omissions, but also
for those of persons for whom one is
responsible. X-x-x The State is
responsible in like manner when it acts
through a special agent, but not when
the damage has been caused by the
official to whom the task done
properly pertains, in which case what
is provided in Art. 2176 shall be
applicable. (Art. 2176. Whoever by
act or omission causes damage to
another, there being fault or
negligence, is obliged to pay for the
damage done. Such fault or
negligence, if there is no pre-existing
contractual relation between the
parties, is called a quasi-delict and is
governed by the provisions of this
Chapter.) (Art. 2180 of the Civil Code
allows a suit against the government
for quasi-delicts committed by the
government when acting through
special agents (those performing non-
regular functions). But if the tortious
act was committed by a regular
employee, the injured party could only
bring a suit for damages against the
employee in his personal capacity.
37. It should be noted in this
connection, that in Merritt vs Govt. of
the Philippine Islands, 34 Phil 311, the
SC said that it is therefore evident that
the State is only liable for acts of its
agents, officers and EEs when they act
as special agents within the meaning of
Art. 1903 (now Art. 2180) and that the
chauffeur of the ambulance of the
General Hospital was not such agent.
In this case, the Philippine General
Hospital (PGH), the agency involved,
did not yet have separate legal
personality from the Philippine Govt.
It should further be noted that the
plaintiff was allowed to sue by virtue
of a special law but was unable to hold
the defend_ant govt. liable since the
injuries were caused by a regular
driver of the govt. and not a special
agent.
38. In US v. Ceballos, Private
Respondent. invoke Art. 2180, NCC
w/c holds the govt liable if it acts
 through a special agent. The
argument, it would seem, is premised
on the ground that since the officers
are designated as "special agents," the
US government should be liable for
their torts.
39. Shell vs. Jalos (2010): Immunity
from suit. Petitioner here claimed that
it could not be sued pursuant to the
doctrine of state immunity without the
consent of the Republic of the
Philippines, on the basis that under
Service Contract 38, it served merely
as an agent of the Philippine
government in the development of the
Malampaya gas reserves. The Court
ruled that petitioner cannot claim
immunity from suit because it is not an
agent of the Republic of
the Philippines, but the latter’s service
contractor for the exploration and
development of one of the country’s
natural gas reserves.  While the
Republic of the Philippines appointed
petitioner as the exclusive party to
conduct petroleum operations in the
Camago-Malampayo area under the
State’s full control and supervision, it
does not follow that petitioner has
become the State’s “agent” within the
meaning of the law. An agent is a
person who binds himself to render
some service or to do something in
representation or on behalf of another,
with the consent or authority of the
latter.  The essence of an agency is the
agent’s ability to represent his
principal and bring about business
relations between the latter and third
persons.  An agent’s ultimate
undertaking is to execute juridical acts
that would create, modify or extinguish
relations between his principal and
third persons.  It is this power to affect
the principal’s contractual relations
with third persons that differentiates
the agent from a service contractor.
Petitioner’s main undertaking under
Service Contract 38 is to “[p]erform all
petroleum operations and provide all
necessary technology and finance” as
well as other connected services to the
Philippine government.  As defined
under the contract, petroleum operation
means the “searching for and obtaining
Petroleum within the Philippines”,
including the “transportation, storage,
handling and sale” of petroleum
whether for export or domestic
consumption.  Petitioner’s primary
obligation under the contract is not to
represent the Philippine government
for the purpose of transacting business
with third persons. Rather, its
contractual commitment is to develop
and manage petroleum operations on
behalf of the State. Consequently, it is
not an agent of the Philippine
government, but a provider of services,
technology and financing for the
Malampaya Natural Gas
Project.  Notably, the Philippine
government itself recognized that
petitioner could be sued in relation to
the project.  This is evident in the
stipulations agreed upon by the parties
under Service Contract 38.
40. Suability v. Liability. There seems
to be a failure to distinguish bet.
suability and liability. Suability
depends on the consent of the state to
be sued, liability on the applicable law
and the established facts. The
circumstance that a state is suable does
not necessarily mean that it is liable;
on the other hand, it can never be held
liable if it does not first consent to be
sued. Liability is not conceded by the
mere fact that the state has allowed
itself to be sued. When the state does
waive its sovereign immunity, it is
only giving the plaintiff the chance to
 prove, it can, that the defendant is
liable.
41. The said article establishes a rule of
liability, not suability. The govt may
be held liable under this art. 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 w/ its
inhabitants and, hence, applies only to
the Phil. govt and not to foreign govts
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 US govt to its
jurisdiction. Express waiver of
immunity cannot be made by a mere
counsel of the govt but must be
effected through a duly-enacted statute.
Neither does such answer come under
the implied forms of consent.
42. NOTES on the consolidated cases
US v. Guinto, etc
1. The doctrine of state immunity 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. This implies
however that the State may be sued with
its consent.
2. 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. Express
consent is effected only by the will of the
legislature through the medium of a duly
enacted statute. Consent is implied when
the state enters into a contract or it itself
commences litigation. When the govt.
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. However, distinctions
must be made between sovereign and
proprietary acts. The state may only be
liable for proprietary acts. As for the
filing of a complaint by the govt.,
suability will result only where the govt.
is claiming afffirmative relief from the
defend_ant.
3. There is no question that the US 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.
4. In this case, by entering into an
employment contract [a proprietary
function] with the respondents, the US
impliedly divested itself of its sovereign
immunity. The state could therefore be
sued since such contracts are commercial
in nature.
43. Incorporation of government-
owned or controlled corps. When the
government creates a corporation, it
invariably provides this corporation a
separate entity and with the capacity to
sue and be sued. If the government
entity is given the capacity to be sued,
the suit encompasses any kind of
action, includ_ing one from tort.
In SSS v CA, 120 SCRA 707 (1983), the
property of one Socorro Cruz was
foreclosed due to the negligence of the
regular employees of SSS in mistaking
her account, which was updated, with that
of another Socorro Cruz, which was in
arrears. The SC, in granting nominal
damages to the claimant, seemed to be
saying that SSS could have invoked the
defense of Art. 2180, which it did not.
The separate opinion of Makasiar
enunciated this. [Note: Consent to be sued
includes actions based on quasi-delict
even though committed by regular agents
and not by special agents.] So the rule, it
seems, is that a government entity can be
sued for tort, but if it is, it can invoke the
defense that it acted through its regular
employees, not special agents.
PNB vs CIR, (1978): Since the PHHC
had the capacity to be sued, any judgment
against it could be enforced by a writ of
execution, and its funds could even be
garnished.
Rayo vs CFI of Bulacan, 110 SCRA
456: The government has organized a
private corporation, put money in it and
has allowed it to sue and be sued in any
court under its charter [RA 6395, Sec.
3(d)]. As a government owned and
controlled corporation, it has a personality
of its own, distinct and separate from that
of the Government (NASSCO v CIR).
Moreover, the charter provision that the
NPC can "sue and be sued in any court" is
without qualification on the cause of
action and accordingly it can include a
tort claim such as the one institut_ed by
petitioners.
SSS V. CA, 120 SCRA 707 (1983): (1)
Having accepted the late payments of the
monthly installments, the SSS could not
suddenly and w/o prior notice to the
couple apply for the extrajudicial
foreclosure of their mortgage. There was
negligence on the part of the SSS when it
mistook the loan account of Socorro J.
Cruz for that of Socorro C. Cruz. Its
attention was called to the error but it
refused to acknowledge its mistake. SSS
should, thus, be held liable for nominal
damages. (2) Under its charter [RA 1161,
sec. 4(k)] the SSS can sue and be sued.
So, even assuming that the SSS enjoys
immunity from suit as an entity
performing governmental functions by
virtue of the explicit provision of the
enabling law, it can be sued. The
government must be deemed to have
waived immunity in respect of the SSS,
although it does not thereby concede its
liability.
44. Forms of Implied consent:
(1) When the government enters into
business contracts. When the
government is in the performance of
governmental function (jure imperii),
even if it enters into a contract with
private persons, it cannot be sued without
its consent. Thus in United States v Ruiz,
136 SCRA 487 (1985). a contract for the
repair of wharves and piers at the naval
base in Subic was held to be in line with
the governmental function of the US
Government and so the immunity existed.
But when the government enters into
commercial con_tracts and descends to
the status of ordinary persons (jure
gestioni), it can be sued like any other
person.
In Malong v PNR, 138 SCRA 63 (1985),
it was held that when the state organized
the Philippine National Railway, it
divested itself of its sovereign capacity,
and so became liable for damages that
arose from the death of one who fell from
an overloaded train.
United States of America v. Ruiz, (1985):
State Immunity from Suits Extends to
contracts Relating to Sovereign Functions.
In 5/72, the US advertised for bid projects
involving the repair of wharves and
certain works on the shorelines at its naval
base in Subic, Zambales. Eligio de
Guzman & Co., Inc. (EG & Co.)
submitted proposals in connection w/ w/c
it received 2 telegrams from the US govt
asking it to confirm its price proposals
and the name of its bonding co. However,
in 6/82, EG & Co. was informed that its
proposals had been rejected and the
projects had been awarded to 3rd parties.
EG & Co. brought suit in the CFI to
compel the US govt to allow it to perform
the work on the projects. It also asked for
a writ of prel. inj. to restrain the US govt
from entering into contract w/ 3rd parties
for work on the projects. The US govt
moved to dismiss the complaint, but its
motion was denied. Hence the petition for
review.
HELD: It has been necessary to
distinguish bet. 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. However, the resp. Judge held
that by entering into a contract for the
repair of wharves or shorelines the State
did not act in its governmental capacity. 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. The rule 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 w/c is devoted to the defense of both
the US and the Phils., indisputably a
function of the govt of the highest order;
they are not utilized for, nor dedicated to,
commercial or business purpose.
Malong v PNR, (1985): PNR not
Immune from Suit
HELD: The correct rule is that "not all
government entities, whether corporate or
noncorporate, are immune from suits.
Immunity from suit is determined by the
character of the objects for w/c the entity
is organized." When the govt enters into a
commercial transaction it abandons its
sovereign capacity and is to be treated like
any other corp. In this case, the state
divested itself of its sovereign capacity
when it organized the PNR, w/c is no
different from its predecessor, the Manila
Railroad Co.
In the recent case of Republic of
Indonesia vs. Vinzon (2003): The mere
entering into a contract by a foreign State
with a private party cannot be construed
as the ultimate test of whether or not it is
an act jure imperii or jure gestionis. Such
act is only the start of the inquiry. Is the
foreign State engaged in the regular
conduct of a business? If the foreign State
is not engaged regularly in a business or
commercial activity, and in this case it has
not been shown to be so engaged, 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.
Hence, the existence alone of a paragraph
in a contract stating that any legal action
arising out of the agreement shall be
settled according to the laws of the
Philippines and by a specified court of the
Philippines is not necessarily a waiver of
sovereign immunity from suit. The
aforesaid provision contains language not
necessarily inconsistent with sovereign
immunity. On the other hand, such
provision may also be meant to apply
where the sovereign party elects to sue in
the local courts, or otherwise waives its
immunity by any subsequent act. The
applicability of Philippine laws must be
deemed to include Philippine laws in its
totality, including the principle
recognizing sovereign immunity. Hence,
the proper court may have no proper
action, by way of settling the case, except
to dismiss it.

There is no dispute that the establishment
of a diplomatic mission is an act jure
imperii. A sovereign State does not
merely establish a diplomatic mission and
leave it at that; the establishment of a
diplomatic mission encompasses its
maintenance and upkeep. Hence, the State
may enter into contracts with private
entities to maintain the premises,
furnishings and equipment of the embassy
and the living quarters of its agents and
officials. It is therefore clear that
petitioner Republic of Indonesia was
acting in pursuit of a sovereign activity
when it entered into a contract with
respondent for the upkeep or maintenance
of the air conditioning units, generator
sets, electrical facilities, water heaters,
and water motor pumps of the Indonesian
Embassy and the official residence of the
Indonesian ambassador.
(2) When it would be inequitable for
the state to invoke its immunity, or
when it takes private property for
public use or purpose.
In Amigable v Cuenca, (43 SCRA 360),
Alfonso v Pasay and Ministerio v CFI, 40
SCRA 464, the SC allowed suit for the
recovery of possession of titled lands
previously (decades) taken over by the
government for expansion of roads
without just compensation and the proper
expropriation proceedings. In so holding,
it said that it would be unjust for the
government to invoke immunity after it
has itself violated the rights of the parties-
claimant by taking over the possession of
the lands.
In Santiago v Republic, 87 SCRA 294
(1978), the SC allowed the revocation of a
deed of donation made to the Bureau of
Plant Industry for its failure to comply
with the condition that it should install a
lightning and water system on the
property and build an office building with
parking lot before a certain date. It would
be unfair, said the court, for the
government to invoke its immunity after
gratuitously receiving property and not
fulfilling its conditions. Consent to be
Sued is Presumed where Allowance of
Immunity Would be Inequitable
The case of Commissioner of Public
Highways vs Burgos, 96 SCRA 831,
simply implemented the ruling in
Amigable vs Cuenca, 43 SCRA 360. In
the earlier case, the question raised was
the right of the plaintiff to sue the govt.
for recovery of the value of her property
which had been converted into public
streets without payment to her of just
compensation. Although it was shown
that she had not previously filed her claim
with the Auditor General as normally
required, the SC decided in her favor. The
SC held that the doctrine of governmental
immunity from suit cannot serve as an
instrument for perpetrating an injustice on
a citizen. In this instant case, the SC fixed
just compensation based on the market
value of the land at the time of the taking.
Doctrine of Quantum Meruit: Vigilar
vs. Aquino (2011): To be sure, this Court
— as the staunch guardian of the citizens'
rights and welfare — cannot sanction an
injustice so patent on its face, and allow
itself to be an instrument in the
perpetration thereof. Justice and equity
sternly demand that the State's cloak of
invincibility against suit be shred in this
particular instance, and that petitioners-
contractors be duly compensated — on
the basis of quantum meruit — for
construction done on the public works
housing project.
(3) If the Govt. files a complaint,
defendant may file a counterclaim
against it
In Froilan vs Oriental Pan Shipping, GR
L-6060 (Sept. 30, 1950), the SC held that
when the State itself files a complaint, the
defendant is entitled to file a counterclaim
against it. This is based on equitable
grounds. The SC ruled that the govt.
impliedly allowed itself to be sued when it
filed a complaint in intervention for the
purpose of asserting a claim for
affirmative relief against the plaintiff, to
with recovery of a vessel.
45. Scope of consent
(1) Under Act No.3083: Sec. 1. Subject
to the provisions of this Act, the
Government of the Philippines hereby
consents and submits to be sued upon any
moneyed claim involving liability arising
from contract, express or implied, which
could serve as a basis of civil action
between private parties.
xxx
When a money judgment is given against
the government, the ordinary rule for
execution would not apply, for the
consent of the government to be sued is
only up to the point of judgment. If it
does not pay, it cannot be compelled to
pay by attachment or otherwise (how does
one attach the Quezon bridge?)
The procedure is for one to furnish the
Office of the President with the decision
so it could include the amount in the
budget for the next year as the basis for
appropriation (since there can be no
disbursement of public funds except in
pursuance of law).
If the judge nonetheless issues a writ of
execution against government funds or
property, no ordinary civil action can be
filed against the judge, unless there is a
showing of malice. But, a reinstatement
of the funds to government accounts and
refund by the private party can be ordered.
(Commissioner of Public Highways v San
Diego, 31 SCRA 616 (1970), reiterating
the case of Alsua v Johnson.)
(2) Under a charter
When consent to be sued is provided by
the charter, the consent does not stop with
the rendition, but goes up to the
satisfaction of the judgment.
In PNB v CIR, 81 SCRA 314 (1978), the
SC held that since the PHHC had the
capacity to be sued, any judgment against
it could be enforced by a writ of
execution, and its funds could even be
garnished.
46. Measure of recovery
When property has been unlawfully taken
by the government so that it is now
compelled to make payment, the measure
of recovery is the fair market value of the
property at the time of taking (Ministerio
v CFI, 40 SCRA 464).
The value of the peso in relation to the
dollar at the time of taking cannot be
considered. For Art 1250 of the Civil
Code concerning supervening inflation
has no application in eminent domain
cases, being applicable only to contractual
obligations [Commissioner of Public
Highways v Burgos, 96 SCRA 831
(1980)]. Ultimately, the face value of the
peso then is the amount to be paid now.
Presidential Immunity from Suit
Rodriguez vs. Gloria Macapagal
Arroyo (Writ of Amparo Case),
November 15, 2011.
In Estrada v. Desierto, we clarified the
doctrine that a non-sitting President does
not enjoy immunity from suit, even for
acts committed during the latter’s tenure.
We emphasize our ruling therein that
courts should look with disfavor upon the
presidential privilege of immunity,
especially when it impedes the search for
truth or impairs the vindication of a right.

Further, in our Resolution in Estrada v.

Desierto, we reiterated that the
presidential immunity from suit exists
only in concurrence with the president’s
incumbency.
 
Applying the foregoing rationale to the case
at bar, it is clear that former President
Arroyo cannot use the presidential
immunity from suit to shield herself from
judicial scrutiny that would assess whether,
within the context of amparo proceedings,
she was responsible or accountable for the
abduction of Rodriguez.