United States vs.
Guinto of the states for acts allegedly performed by them in the
(G.R. No.76607, Feb. 26, 1990)
FACTS:
These are consolidated cases which involve the doctrine of state
immunity. The United States of America was not impleaded in
the case at bar but has moved to dismiss on the ground that they
are in effect suits against it to which it has not consented.
1.USA vs GUINTO (GR No. 76607) The private respondents are
suing several officers of the US Air Force in Clark Air Base in
connection with the bidding conducted by them for contracts for
barber services in the said base, which was won by Dizon. The
respondents wanted to cancel the award because they claimed
that Dizon had included in his bid an area not included in the
invitation to bid, and also, to conduct a rebidding.
2.USA vs RODRIGO (GR No. 79470) Genove filed a complaint
for damages for his dismissal as cook in the US Air Force
Recreation Center at Camp John Hay Air Station. It had been
ascertained after investigation that Genove had poured urine into
the soup stock used in cooking the vegetables served to the club
customers. The club manager suspended him and thereafter
referred the case to a board of arbitrators, which unanimously
found him guilty and recommended his dismissal.
3.USA vs CEBALLOS (GR No. 80018) Bautista, a barracks boy
in Camp O’ Donnell, was arrested following a buy-bust operation
conducted by petitioners, who were USAF officers and special
agents of the Air Force Office. An information was filed against
Bautista and at the trial, petitioners testified against him. As a
result of the charge, Bautista was dismissed from his
employment. He then filed for damages against petitioners
claiming that it was because of the latter’s acts that he lost his
job.
4.USA vs VERGARA (GR No. 80258) A complaint for damages
was filed by private respondents against petitioners (US military
officers) for injuries allegedly sustained by the former when
defendants beat them up, handcuffed them and unleashed dogs
on them. The petitioners deny this and claim that respondents
were arrested for theft but resisted arrest, thus incurring the
injuries.
ISSUE:
Whether or not the defendants were immune from suit under the
RP-US Bases Treaty.
RULING:
The rule that a State may not be sued without its consent is one
of the generally accepted principles of international law that were
have adopted as part of the law of our land. 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 the 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. All states are sovereign equals and
cannot assert jurisdiction over one another. While the doctrine
appears to prohibit only suits against the state without its
consent, it is also applicable to complaints filed against officials
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, the suit
must be regarded as against the state although it has not been
formally impleaded. 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. It bears stressing at this point that the
aforesaid principle do not confer on the USA 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 USA, 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 (commercial
acts/jure gestionis). It is only when the contract involves its
sovereign or governmental capacity (governmental acts/jure
imperii) that no such waiver may be implied. In US vs GUINTO,
the court finds the barbershops subject to the concessions
granted by the US government to be commercial enterprises
operated by private persons. The Court would have directly
resolved the claims against the defendants as in USA vs
RODRIGO, except for the paucity of the record as the evidence
of the alleged irregularity in the grant of the barbershop
concessions were not available. Accordingly, this case was
remanded to the court below for further proceedings. In US vs
RODRIGO, the restaurant services offered at the John Hay Air
Station partake of the nature of a business enterprise undertaken
by the US government in its proprietary capacity, as they were
operated for profit, as a commercial and not a governmental
activity. Not even the US government can claim such immunity
because 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, the court still
dismissed the complaint against petitioners on the ground that
there was nothing arbitrary about the proceedings in the
dismissal of Genove, as the petitioners acted quite properly in
terminating Genove’s employment for his unbelievably
nauseating act. In US vs CEBALLOS, it was clear that the
petitioners were acting in the exercise of their official functions
when they conducted the buy-bust operation and thereafter
testified against the complainant. 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. In US vs VERGARA, the contradictory
factual allegations in this case need a closer study of what
actually happened. The record was too meager to indicate if the
defendants were really discharging their official duties or had
actually exceeded their authority when the incident occurred.
The needed inquiry must first be made by the lower court so it
may assess and resolve the conflicting claims of the parties.
Principle/s used Doctrine of State Immunity Jure Gestionis – by
right of economic or business relations, may be sued. (US vs
Guinto) Jure Imperii – by right of sovereign power, in the
exercise of sovereign functions. No implied consent. (US v. Ruiz,
136 SCRA 487)

Veterans Manpower & Protective Services, Inc., vs. CA
(G.R. No.91359, Sep. 25, 1992)
FACTS:
(Veterans Manpower and Protective Services, Inc.) alleges that
the provisions of RA 5487(Private Security Agency Law) violate
the provisions of the Constitution against monopolies, unfair
competition and combinations of restraint of trade and tend to
favor and institutionalize the PADPAO (Philippine Association of
Detective and Protective Services, Inc.).  VMPSI questions the
provision on requiring all private security agencies or company
security forces to register as members of any PADPAO chapter
organized within the region.  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 8
hours of security service per day at P2,255.00 within Metro
Manila and P2,215.00 outside of Metro Manila.  PADPAO found
VMPSI guilty of cut-throat competition when it charged
Metropolitan Waterworks and Sewerage System lower than the
standard minimum rates provided in the MOA.  As a result,
PADPAO refused to issue a clearance/certificate of membership
to VMPSI.  VMPSI filed a civil case against the PC chief and
PC-SUSIA (Philippine Constabulary Supervisory Unit for Security
and Investigation Agencies).  PC Chief and PC-SUSIA filed a
motion to dismiss on the grounds that the case is against the
State which had not given consent thereto.
ISSUE:
Whether or not VMPSI’s complaint against the PC chief and PC-
SUSIA is a suit against the State without consent?  of the court, subject to its right to interpose any lawful defense.
RULING:
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. 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.
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. Petition for
review is denied.
Merritt vs Government of the Philippine Islands
(G.R. No.11154, March 21, 1916)
FACTS:
Merrit was riding a motorcycle along Padre Faura Street when
he was bumped by the ambulance of the General Hospital.
Merrit sustained severe injuries rendering him unable to return to
work. The legislature later enacted Act 2457 authorizing Merritt
to file a suit 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 he is entitled. After trial, the
lower court held that the collision was due to the negligence of
the driver of the ambulance. It then determined the amount of
damages and ordered the government to pay the same.
ISSUE:
Did the Government, in enacting the Act 2457, simply waive its
immunity from suit or did it also concede its liability to the
plaintiff? 
RULING:
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 pre-existing liability and submits itself to the jurisdiction
Amigable vs. Cuenca
(G.R. No .L-26400, Feb. 29, 1972)
FACTS:
Victoria Amigable, is the registered owner of a lot in Cebu City.
Without prior expropriation or negotiated sale, the government
used a portion of said lot for the construction of the Mango and
Gorordo Avenues. 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 Endorsement. Thus, Amigable filed in the
court a quo a complaint, against the Republic of the Philippines
and Nicolas Cuenca (Commissioner of Public Highways) for the
recovery of ownership and possession of her lot. The defendants
denied the plaintiff’s allegations stating: (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
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 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. On July 29, 1959, the 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 lot on the ground that the government cannot
be sued without its consent; that it had neither original nor
appellate jurisdiction to hear and decide plaintiff's claim for
compensatory damages, being a money claim against the
government; and that it 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.
ISSUE:
Can Amigable properly sue the government?
RULING:
Yes. In its decision, the Court cited Ministerio v. Court of First
Instance of Cebu, which also involved a claim for payment of the
value of a portion of land used for the widening of Gorordo
Avenue in Cebu City. 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.
Republic vs. Sandiganbayan
(G.R. No.90478, Nov. 21, 1991)
FACTS:
Private respondents Bienvenido R. Tantoco, Jr. and Dominador
R. Santiago are defendants in Civil Case. The case was
commenced 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"
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.
Tantoco and Santiago then presented a "motion for leave to file
interrogatories under Rule 25 of the Rules of Court"
The PCCG responded by filing a motion to strike out said motion
and interrogatories as being impertinent he PCGG filed an
Expanded Complaint.[8] As regards this expanded complaint,
Tantoco and Santiago reiterated their motion for bill of particulars
through a Manifestation
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.
Tantoco and Santiago filed with the Sandiganbayan a pleading
denominated as interrogatories to plaintiff as well as a motion for
production and inspection of documents. PCGG claims that the
documents sought to be produced are privileged in character
and their use is proscribed by the immunity provisions of E.O. 1
ISSUE:
Whether or not the documents sought to be produced are
privileged in character or confidential in nature and there use is
proscribed by the immunity provisions of E.O. 1?
RULING:
No. 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. 
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. 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. 
China National Machinery & Equipment vs Santamaria (G.R. No.
185572, Feb. 7, 2012)
FACTS:
The petitioner China National Machinery & Equipment Corp
(CNMEG) entered into a Memorandum of Understanding with
Northrail for a feasibility study on a possible railway line from
Manila to San Fernando. In relation to this, the EXIM Bank and
the DOF entered into an MOU where China agreed to lend an
amount not exceeding $400M. Northrail and CNMEG then
executed a Contract Agreement for the construction of Phase I of
the Northrail project for the price of $421.05M. Herein
respondents filed a complaint alleging that the Contract and
Loan Agreements were void for being contrary to the constitution
and various laws. CNMEG filed a motion to dismiss on the
ground that the trial court didn’t have jurisdiction over its person
since it was an agent of the Chinese gov’t which gives it
immunity from suit. The RTC denied the motion to dismiss, which
the CA also affirmed. CNMEG then brought the matter before the
SC. The SC ruled that immunity of a sovereign is recognized
only with regard to public acts. The CNMEG is not immune since
the Northrail project is a proprietary activity and did not arise
from the sovereign functions of China or from diplomatic gratuity.
Furthermore, CNMEG failed to adduce evidence that it is
immune from suit under Chinese law. It also failed to present a
certification from the DFA which is necessary for the
determination if a foreign entity is immune from suit. Lastly, the
agreement to submit any dispute to arbitration may be construed
as an implicit waiver of immunity from suit. Facts of the Case 
Petitioner China National Machinery & Equipment Corp
(CNMEG) entered into a Memorandum of Understanding (MOU)
with North Luzon Railways Corporation (Northrail) for a feasibility
study on a possible railway line from Manila to San Fernando,
LU.  On Aug 30, 2003, the Export Import Bank of China (EXIM)
and the DOF entered into an MOU where China agreed to
extend Preferential Buyer’s Credit to the Philippine gov’t to
finance the Northrail Project. EXIM agreed to extend an amount
not exceeding $400M, payable in 20 years with a 5-year grace
period at the rate of 3% per annum.  On Oct 1, 2003, Chinese
Ambassador wrote a letter to the DOF Secretary informing him of
CNMEG’s designation as the Prime Contractor.  On Dec 30,
2003, Northrail and CNMEG executed a Contract Agreement for
the construction of Phase I of the project for the price of
$421.05M.  The respondents filed a complaint alleging that the
Contract and Loan Agreements were void for being contrary to
the Constitution and various laws.  The CNMEG filed a Motion
to Dismiss arguing that the trial court did not have jurisdiction
over its person since it was an agent of the Chinese gov’t,
hence, immune from suit.  The RTC denied the motion.
ISSUE:
Whether or not CNMEG is entitled to immunity from suit
RULING:
The immunity of a sovereign is recognized only with regard to
public acts. The Court ruled that CNMEG is not immune from suit
based on four grounds. CNMEG is engaged in proprietary
activity  A reading of the first MOU will reveal that CNMEG
sought the construction of the Luzon Railways as a proprietary
venture.  It was CNMEG that initiated the project, 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 gov’t, but was plainly a business
strategy employed by CNMEG with a view to securing the
commercial enterprise.  This was also confirmed by
Ambassador Wang in his letter.  The desire of the CNMEG to
secure the Northrail project was in the ordinary course of its
business as a global construction company. It was intended to
generate profit for CNMEG.  Re: the loan agreement, despite
petitioner’s claim that EXIM extended financial assistance
because the bank was mandated by the Chinese government,
and not because of any motivation to do business in the
Philippines, it is clear from the provisions that the project was a
purely commercial transaction. CNMEG failed to adduce
evidence that it is immune from suit under Chinese law  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.  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. In the
absence of evidence to the contrary, CNMEG is presumed to be
a government-owned and controlled corporation without an
original charter. Hence, it has the capacity to sue and be sued.
CNMEG failed to present a certification from the DFA  In Holy
See, the Court held that the determination by the Executive that
an entity is entitled to sovereign or diplomatic immunity is a
political question conclusive upon the courts.  In the Philippines,
the practice is for the foreign gov’t to first secure an executive
endorsement of its claim of sovereign or diplomatic immunity. 
The DFA is the agency which has the competence and authority
to provide such necessary determination.  In the case at bar,
CNMEG only offered the Certification from Embassy of China.
This is not the kind of certification that can establish its
entitlement to immunity from suit.  It must be from the foreign
office of the state where it is sued. In the case at bar, CNMEG
did not present any documentation from the DFA. An agreement
to submit any dispute to arbitration may be construed as an
implicit waiver of immunity from suit.
Republic vs. Feliciano
(G.R. No. 70853, March 12, 1987)
FACTS:
Respondent Pablo Feliciano filed a complaint with the Court of
First Instance against the Republic of the Philippines,
represented by the Land Authority, for the recovery of ownership
and possession of a parcel of land.
The trial court rendered a decision declaring Lot No. 1 to be the
private property of Feliciano and the rest of the property reverted
to the public domain.
The trial court reopened the case due to the filing of a motion to
intervene and to set aside the decision of the trial court by 86
settlers, alleging that they had been in possession of the land for
more than 20 years under claim of ownership.
The trial court ordered the settlers to present their evidence but
they did not appear at the day of presentation of evidence.
Feliciano, on the other hand, presented additional evidence.
Thereafter, the case was submitted for decision and the trial
court ruled in favor of Feliciano.
The settlers immediately filed a motion for reconsideration and
then the case was reopened to allow them to present their
evidence.
Feliciano filed a petition for certiorari with the Appellate Court but
it was denied.
The settlers filed a motion to dismiss 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 Feliciano.
ISSUE:
Whether or not the State can be sued for recovery and
possession of a parcel of land. 
RULING:
NO. A suit against the State, 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. Waiver of
immunity, being a derogation of sovereignty, will not be inferred
lightly. But must be construed in strictissimi juris (of strictest
right). Moreover, the Proclamation is not a legislative act. The
consent of the State to be sued must emanate from statutory
authority. 3. 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. Adding to the dubiousness of
said document is the fact that "possessory information calls for
an area of only 100 hectares," whereas the land claimed by
respondent Feliciano comprises 1,364.4177 hectares, later
reduced to 701-9064 hectares.
United States vs. Ruiz
(G.R. No. L-35645, May 22, 1985)
FACTS:
Sometime in May 1972, the United States organized an auction
by invitation for the repair of its equipment and facilities in at the
US Naval Station Subic Bay in Zambales, which was one of
those provided in the Military Bases Agreement between the
Philippines and the US. 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, thereby, complied. In June,
1972, the company received a letter which was signed by
Wilham I. Collins, Director for Contracts Division of the Navy
Department of US, saying that the company did not qualify to
receive an award for the projects because of its previous
unsatisfactory performance on a repair contract and that the
projects had been awarded to third parties. The company sued
the US and its officers in the US Navy who were responsible for
rejecting their services to order the defendants in allowing the
company to perform the work for the projects, and in the event
that specific performance was no longer possible, to order the
defendants to pay the 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 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. Subsequently a motion to dismiss the complaint was
filed by the defendants, who included an opposition to the
issuance of the writ of preliminary injunction. 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.
ISSUE:
Whether or not US is suable?
RULING:
NO. The traditional rule of State immunity exempts a State from
being sued in the courts of another State without its consent or
waiver. 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. 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 Holy See vs. Rosario
(G.R. No. 101949, Dec. 1, 1994)
FACTS:
On, April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner(also
agent of the sellers) and the Philippine Realty Corporation
(PRC), agreed to sell to Ramon Licup lots in Parañaque
registered in the name of petitioner. The agreement was to sell
was made on the condition that earnest money of Php
100,000.00 be paid by Licup to the sellers, and that the sellers
clear the said lots of squatters who were then occupying the said
lots. Licup paid and assigned his rights over the property to
private respondent, Starbright Sales Enterprises, Inc. Thereafter,
private respondent demanded that the sellers clear the property
of squatter, Msgr. Cirilos informed them that the squatters’ refuse
to and propose instead either that private respondent undertake
the eviction or that the earnest money be returned. The private
respondent counter proposed and said that if they would
undertake the eviction the purchase price must be reduced.
Msgr. Cirilos returned the earnest money and wrote private
respondent giving it seven days from receipt of the letter to pay
the original purchase price in cash. Private respondent sent back
the money but later found out that on March 30, 1989, petitioner
and the PRC, without notice sold the lots to Topicana.
Respondent then filed a petition praying for the annulment of the
Deeds of Sale, reconveyance of the lots, specific performance of
the agreement and payment for damages. Petitioner moved to
dismiss the claim and invoked sovereign immunity from suit.
Respondent on opposed this and said that it “shed off its
sovereign immunity by entering into the business contract in
question.” And correspondingly, petitioner moved for
reconsideration On October 1, 1991, trial court deferred the
motion, then petitioner elevated the matter to the Supreme
Court. On December 9, 1991, the Department of Foreign Affairs
filed a Motion for Intervention.
ISSUE:
Whether or not the Holy See can invoke sovereign immunity
despite it entering into a commercial contract?
RULING:
YES, the Holy See can still invoke sovereign immunity. Under
the Section 2 of Article II of the 1987 Constitution, the Philippines
have adopted the generally accepted principles of International
Law and the Philippines has accorded the Holy See the status of Armed Forces of the Philippines. Petitioner further
a foreign sovereign. alleged the ground being excess of
jurisdiction or grave abuse of discretion. Petitioner is entitled to
the writs prayed for. Respondent
Judge failed to have acted its duties.
Republic vs. Villasor
In the petition filed by the Republic of the Philippines a summary
(G.R. No. L-30671, Nov. 28, 1973)
of facts was set forth thus: a
decision was rendered in Special Proceedings No. 2156-R in
FACTS:
favor of respondents and against the
petitioner herein, confirming the arbitration award in the amount
On July 7, 1969, a decision was rendered in Special
of P1,712,396.40, subject of
Proceedings No. 2156-R in favor of respondents P.J. Kiener Co.,
Special Proceedings; respondent Hon Guillermo P.
Ltd., Gavino Unchuan, and International Construction
Villasor, issued an Order declaring the
Corporation and against petitioner confirming the arbitration
aforestated decision final and executory, directing the Sheriffs of
award in theamount of P1,712,396.40. The award is for the
Rizal Province, Quezon City
satisfaction of a judgment against the Phlippine Government. On
and Manila to execute the said decision; Pursuant to the said
June 24, 1969, respondent Honorable Guillermo Villasor issued
Order, the corresponding Alias Writ
an Order declaring the decision final and executory. Villasor
of Execution was issued; On the strength of the afore-mentioned
directed the Sheriffs of Rizal Province, Quezon City as well as
Alias Writ of Execution, the
Manilato execute said decision. The Provincial Sheriff of Rizal
Provincial Sheriff of Rizal (respondent herein) served notices of
served Notices of Garnishment with several Banks, especially on
garnishment with several Banks,
Philippine Veterans Bank and PNB. The funds of the Armed
especially on the “monies due the Armed Forces of the
Forces of the Philippines on deposit with Philippine Veterans
Philippines in the form of deposits
Bank and PNB are public funds duly appropriated and allocated
sufficient to cover the amount mentioned in the said Writ of
for the payment of pensions of retirees, pay and allowances of
Execution”; the Philippine Veterans
military and civilian personnel and for maintenance and
Bank received the same notice of garnishment. The funds of the
operations of the AFP. Petitioner, on certiorari, filed prohibition
Armed Forces of the Philippines
proceedings against respondent Judge Villasor for acting in
on deposit with the Banks, particularly, with the Philippine
excess of jurisdiction with grave abuse of discretion amounting to
Veterans Bank and the Philippine
lack of jurisdiction in granting the issuance of a Writ of Execution
National Bank or their branches are public funds duly
against the properties of the AFP, hence the notices and
appropriated and allocated for the payment
garnishment are null and void.
of pensions of retirees, pay and allowances of military
and civilian personnel and for
ISSUE:
maintenance and operations of the Armed Forces of the
Whether the State can be sued without its consent
Philippines, as per Certification by the
AFP Controller. The paragraph immediately succeeding
RULING:
in such petition then alleged:
“Respondent Judge, Honorable Guillermo P. Villasor, acted in
What was done by respondent Judge is not in conformity with
excess of jurisdiction or with
the dictates of the Constitution. It isa fundamental postulate of
grave abuse of discretion amounting to lack of jurisdiction in
constitutionalism flowing from the juristic concept of sovereignty
granting the issuance of an alias
that the state as well as its government is immune from suit
writ of execution against the properties of the Armed Forces of
unless it gives its consent. A sovereign is exempt from suit, not
the Philippines, hence, the Alias
because of any formal conception or obsolete theory, but on the
Writ of Execution and notices of garnishment issued pursuant
logical and practical ground that there can beno legal right as
thereto are null and void. In the
against the authority that makes the law on which the right
answer filed by respondents, through counsel Andres T. Velarde
depends. The State may not be sued without its consent. A
and Marcelo B. Fernan, the facts
corollary, both dictated by logic and sound sense from a basic
set forth were admitted with the only qualification being that the
concept is that public funds cannot be the object of a
total award was in the amount
garnishment proceeding even if the consent to be sued had been
of P2,372,331.40.
previously granted and the state liability adjudged. The universal
The Republic of the Philippines, as mentioned at the outset, did
rule that where the State gives its consent to be sued by private
right in filing this certiorari and
parties either by general or special law, it may limit claimant’s
prohibition proceeding. What was done by respondent
action only up to the completion of proceedings anterior to the
Judge is not in conformity with the
stage of execution and that the power of the Courts ends when
dictates of the Constitution
the judgment is rendered, since the government funds and
properties maynot be seized under writs of execution or
Dept. of Agriculture vs NLRC
garnishment to satisfy such judgments, is based on obvious
(G.R. No. 104269, Nov. 11, 1993)
considerations of public policy. Disbursements of public funds
must be covered by the corresponding appropriation as required
by law. The functions and public services rendered by the State
FACTS:
cannot be allowed to be paralyzed or disrupted by the diversion
of public funds from their legitimate and specific objects, as
The DA and Sultan Security Agency entered into a contract for
appropriated by law
security services, pursuant to the agreement guards were
deployed by Sultan Agency in the various premises of the DA.
A writ for certiorari and prohibition was filed by the Republic of
September 1990, several guards of Sultan Agency filed a
the Philippines challenging the
complaint for underpayment of wages, non-payment of 13th
decision made by respondent Judge Villasor of RTC of Cebu,
month pay, uniform allowances, night shift differential pay,
Branch 1 against the funds of the
holiday pay and overtime pay, as well as for damages before
Regional Arbitration Branch of CDO against the DA and Sultan
Security Agency.
The executive labor arbiter rendered that DA and Sultan Agency
are jointly and severally liable. Sultan didn't appeal the decision,
thus it became final and executory. July 1991, the Labor Arbiter
issued a writ of execution commanding the City Sheriff to enforce
the judgment against the property of DA and Sultan's property.
DA, filed a petition for injunction, prohibition and mandamus, with
prayer for preliminary writ of injunction was filed by the petitioner
with the NLRC CDO, saying that the writ issued was affected
without the labor arbiter’s jurisdiction over the petitioner. DA also
pointed out that the attachment or seizure of its property would
hamper and jeopardize petitioner's governmental functions to the
prejudice of the public good.
This petition charges NLRC with grave abuse of discretion for
refusing to quash the writ of execution. The NLRC has
disregarded the cardinal rule on the non-suability of the State.
NLRC argued on the other hand that the DA has impliedly
waived its immunity from suit by concluding a service contract
with Sultan Agency.
ISSUE: Whether the doctrine of non-suability applies
RULING:
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.
In the instant case, the Department of Agriculture has not
pretended to have assumed a capacity apart from its being a
governmental entity when it entered into the questioned contract;
nor that it could have, in fact, performed any act proprietary in
character.
But, be that as it may, the claims of private respondents, i.e. for
underpayment of wages, holiday pay, overtime pay and similar
other items, arising from the Contract for Service, clearly
constitute money claims. Act No. 3083, aforecited, gives the
consent of the State to be "sued upon any moneyed claim
involving liability arising from contract, express or implied, . . .
Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as
amended by Presidential Decree ("P.D.") No. 1145, the money
claim first be brought to the Commission on Audit.
We fail to see any substantial conflict or inconsistency between
the provisions of C.A. No. 327 and the Labor Code with respect
to money claims against the State. The Labor code, in relation to
Act No. 3083, provides the legal basis for the State liability but
the prosecution, enforcement or satisfaction thereof must still be
pursued in accordance with the rules and procedures laid down
in C.A. No. 327, as amended by P.D. 1445.
PNB vs. Pabalan
(G.R. No. L-33112, June 15, 1978)
FACTS:
The case was filed by petitioner requesting for certiorari against
the writ of execution authorized by the Hon Judge Pabalan
regarding the transfer of funds amounting to P12,724.66
belonging to Philippine Virginia Tobacco Administration (PVTA).  
Philippine National Bank (PNB) of La Union filed an
administrative complaint against Judge Pabalan for grave abuse
of discretion, alleging that the latter failed to recognize that the
questioned funds are of public character and therefore may not
be garnished, attached or levied upon. The PNB La Union
Branch invoked the doctrine of non-suability, putting a bar on the
notice of garnishment.
ISSUE:
Whether or not Philippine National Bank can be sued. 
RULING:
The consent of the state to be sued may be given expressly or
impliedly. In this case, Consent to be sued was given impliedly
when the State enters into a commercial contract. When the
State enters into a contract, the State is deemed to have
divested itself of the mantle of sovereign immunity and
descended to the level of the ordinary individual. Hence, Funds
of public corporations could properly be made the object of a
notice of garnishment.
PVTA is also a public corporation with the same attributes, a
similar outcome is attributed. The government has entered with
them into a commercial business hence it has abandoned its
sovereign capacity and has stepped down to the level of a
corporation. Therefore, it is subject to rules governing ordinary
corporations and in effect can be sued. Therefore, the petition of
PNB La Union is denied. The Supreme Court ruled that the funds
held by PNB is subject for garnishment. Funds of public
corporations which can sue and be sued are not exempt from
garnishment. Thus, the writ of execution be imposed
immediately. 
Rayo vs CFI of Bulacan
(G.R. No. L-55273-83, Dec. 19, 1981)
FACTS:
On October 26, 1978, typhoon “Kading” struck Bulacan. Due to
this, the National Power Corporation (NPC), through its plant
superintendent Benjamin Chavez, simultaneously opened 3
floodgates of Angat Dam.
The opening of the floodgates caused several towns to be
inundated (the town of Norzagaray was the most affected one). It
resulted to a hundred deaths and damage to properties that were
worth over a million pesos.
Petitioners (victims) filed a complaint for damages against NPC,
including plant superintendent Benjamin Chavez.
Respondent filed counterclaims and put up a special and
affirmative defense that “in the operation of the Angat Dam,” it is
“performing a purely governmental function”, hence it “cannot be
sued without the express consent of the State.”
Petitioners oppose the defense, contending that the NPC is not
performing governmental but merely proprietary functions and
that under its own organic act, Section 3 (d) of Republic Act No.
6395, it can sue and be sued in any court.
CFI dropped the NPC from the complaint and left Chavez as the
sole party-defendant.
CFI RULING: Upon a motion for reconsideration, the CFI ruled
that petitioners’ reliance on Sec. 3 of RA 6395 is not tenable
since the same refer to such matters that are only within the
scope of the other corporate powers of said defendant and not
matters of tort as in the instant cases.
Being an agency performing a purely governmental function in
the operation of the Angat Dam, said defendant was not given
any right to commit wrongs upon individuals. To sue said
defendant for tort may require the express consent of the State.
PETITION DISMISSED.
ISSUE:
Whether the power of respondent National Power Corporation to
sue and be sued under its organic charter includes the power to
be sued for tort.
RULING:
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.
As a government owned and controlled corporation, it has a
personality of its own, distinct and separate from that of the
government. Moreover, the charter provision that it can sue and
be sued in any court.
SC reversed the CFI decision and GRANTED petitioners to
reinstate their complaint against the NPC.
It is sufficient to say that 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. (R.A. No. 6395). As a
government owned and controlled corporation, it has a
personality of its own, distinct and separate from that of the
Government. 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 instituted by the petitioners.
Bureau of Printing vs. Bureau of Printing Employees Ass. (G.R.
No. L-15751, Jan. 28, 1961)
FACTS:
The action in question was upon complaint of the respondent
Bureau of Printing Employees Association (NLU)... against
herein petitioners Bureau of Printing. The complaint alleged that
Serafin Salvador and Mariano Ledesma have been engaging in
unfair labor practice by interfering with or coercing the
employees of the Bureau of Printing, particularly the members of
the complaining association, in the exercise of their right to self-
organization and discriminating in regard to hire and tenure of
their employment in order to discourage them from pursuing
their... union activities. The petitioners... denied the charges of
unfair labor practices attributed to them and, by way of
affirmative defenses, alleged, among other things, that
respondents... were suspended pending result of an
administrative investigation against them for breach of Civil
Service rules and regulations; that the Bureau of Printing has no
juridical personality to sue and be sued; that said Bureau of
Printing is not an industrial concern engaged for the purpose of
gain but is an agency of the Republic performing governmental
functions.
ISSUE:
Whether or not the Bureau of Printing has no juridical personality
to sue and be sued
RULING:
Clearly, while the Bureau of Printing is allowed to undertake
private printing jobs, it cannot be pretended that it is thereby an
industrial... or business concern. The additional work it executes
for private parties is merely incidental to its function, and
although such work may be deemed proprietary in character,
there is no showing that the employees performing said
proprietary function are separate and distinct... from those
employed in its general governmental functions.
Indeed, as an office of the Government, without any corporate or
juridical personality, the Bureau of Printing cannot be sued
Any suit, action or proceeding against it, if it were to produce any
effect, would actually be a suit, action or... proceeding against
the Government itself, and the rule is settled that the
Government cannot be sued without its consent, much less over
its objection.
Said administrative charges are for insubordination, grave
misconduct and acts prejudicial to public service committed by
inciting the employees of the Bureau of Printing to walk out of
their jobs against the order of the duly constituted officials.
Under the law, the Heads of Departments and Bureaus are
authorized to institute and investigate administrative charges
against erring subordinates.
Mobil Phils. Exploration vs. Customs Arrastre Services (G.R. No.
L-23139, Dec. 17, 1966)
FACTS:
Four cases of rotary drill parts were shipped from abroad on S.S.
"Leoville", consigned to Mobil Philippines Exploration, Inc.,
Manila. The shipment was discharged to the custody of the
Customs Arrastre Service, the unit of the Bureau of Customs
then handling Arrastre operations therein. The Customs Arrastre
Service later delivered to the broker of the consignee three
cases only of the shipment. Mobil Philippines Exploration, Inc.,
filed suit in the Court of First Instance of Manila against the
Customs Arrastre Service and the Bureau of Customs to recover
the value of the undelivered case in the amount of P18,493.37
plus other damages. Defendants filed a motion to dismiss the
complaint on the ground that not being persons under the law,
defendants cannot be sued. Appellant contends that not all
government entities are immune from suit; that defendant
Bureau of Customs as operator of the arrastre service at the Port
of Manila, is discharging proprietary functions and as such, can
be sued by private individuals.
ISSUE:
Whether or not the defendants can invoke state immunity.
RULING:
Yes, the fact that a non-corporate government entity performs a
function proprietary in nature does not necessarily result in its
being suable. If said nongovernmental 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. The Bureau of Customs is part of the
Department of Finance, 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. To this function, arrastre
service is a necessary incident. Clearly, therefore, although said SC dismissed the petition for lack of merit. The State’s immunity
arrastre function may be deemed proprietary, it is a necessary from suit does not extend to the petitioner (ATO) because it is an
incident of the primary and governmental function of the Bureau agency of the State engaged in an enterprise that is far from
of Customs, so that engaging in the same does not necessarily being the State’s exclusive prerogative. The CA thereby correctly
render said Bureau liable to suit. For otherwise, it could not appreciated the juridical character of the ATO as an agency of
perform its governmental function without necessarily exposing the Government not performing a purely governmental or
itself to suit. Sovereign immunity, granted as to the end, should sovereign function, but was instead involved in the management
not be denied as to the necessary means to that end. 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.
The SC further observes that the doctrine of sovereign immunity
cannot be successfully invoked to defeat a valid claim for
Civil Aeronautics Administration vs CA compensation arising from the taking without just compensation
(G.R. No. L-51806, Nov. 8, 1988) and without the proper expropriation proceedings being first
resorted to of the plaintiff’s property. Lastly, the issue of whether
or not the ATO could be sued without the States consent has
FACTS:
been rendered moot by the passage of Republic Act No. 9497,
otherwise known as the Civil Aviation Authority Act of 2008. R.A.
Ernest Simke was a naturalized Filipino and was Honorary
No. 9497 abolished the ATO and u nder its Transitory
Consul Geileral of Israel in the Philippines. In December 1968,
Provisions, R.A. No. 9497 established in place of the ATO the
respondent went to the Manila International Airport to meet his
Civil Aviation Authority of the Philippines (CAAP), which thereby
future son-in-law. While walking on the terrace, Simke slipped
assumed all of the ATOs powers, duties and rights, assets, real
over an elevation, fell on his back and broke his thigh. He was
and personal properties, funds, and revenues. Section 23 of R.A.
operated on but filed for damages under quasi-delict (or
No. 9497 enumerates the corporate powers vested in the CAAP,
negligence) against CAA as the entity empowered to administer,
including the power to sue and be sued, to enter into contracts of
operate, manage, control, maintain and develop the Manila
every class, kind and description, to construct, acquire, own,
International Airport (RA 776). Trial Court and CA ruled in favor
hold, operate, maintain, administer and lease personal and real
of Simke.
properties, and to settle, under such terms and conditions most
advantageous to it, any claim by or against it. With the CAAP
ISSUE:
having legally succeeded the ATO pursuant to R.A. No. 9497,
the obligations that the ATO had incurred by virtue of the deed of
Is the suit against the CAA effectively against the Republic of the
sale with the Ramos spouses might now be enforced against the
Philippines, which cannot be sued without its consent?
CAAP.
RULING:
Mun. of San Fernando vs. Firme
NO. Executive Order 365 (Reorganizing the CAA and Abolishing
(G.R. No. 52179, April 8, 1991)
the National Airports Corporation) was interpreted by the Court
as giving the CAA the status of a private entity. RA 776 (Civil
FACTS:
Aeronautics Act) amends the EO but retains most of pertinent
provisions of EO 365. Citing National Airports Corporation vs
At about 7AM, a collision occurred involving a passenger
Teodoro, court held that the CAA, which replaced the National
jeepney driven by Bernardo Balagot and owned by the Estate of
Airports Corporation, is engaged in solely private functions and
Macario Nieveras, a gravel and sand truck driven by Jose
thus has no sovereign immunity and can sue or be sued. They
Manandeg and owned by Tanquilino Velasquez, and a dump
cite Sec. 32 (24 and 25) which defines powers of the
truck of the Municipality of San Fernando, La Union and driven
administrator. The nature of its functions is private.
by Alfredo Bislig. Due to the impact, several passengers of the
jeepney including Laureano Baniña Sr. died as a result of the
Air Transportation Administration vs. Spouses David
injuries they sustained and 4 others suffered varying degrees of
(G.R. No.159402, Feb 23, 2011)
physical injuries. Private respondents instituted a complaint for
damages against the Estate of Macario Nieveras and Bernardo
FACTS:
Balagot, owner and driver, respectively, of the passenger
jeepney in the CFI of La Union. However, the defendants filed a
Sps. Ramos discovered that a portion of their land (somewhere
Third-Party Complaint against Municipality of San Fernando and
in Baguio) was being used as part of the runway and running
the driver of a dump truck of the Municipality. The case was
shoulder of the Loakan Airport which is operated by ATO.
subsequently transferred to respondent judge’s court. The
Sometime in 1995, respondents agreed to convey the subject
private respondents amended their complaint wherein the
portion by deed of sale to ATO in consideration of the amount of
petitioner and its regular employee, Alfredo Bislig were
Php778,150.00. However, ATO failed to pay despite repeated
impleaded for the first time as defendants. Petitioner filed its
verbal and written demands. Thus, an action for collection
answer and raised affirmative defenses such as lack of cause of
against ATO was filed by the respondents before the RTC.
action and non-suability of the State, among others. Respondent
ATO’s primary contention was that the deed of sale was entered
judge ordered defendants Municipality of San Fernando, La
into the performance of governmental functions. RTC ruled in
Union and Alfredo Bislig to pay jointly and severally the plaintiffs
favor of the respondents. CA affirmed RTC. Hence, the petition.
for damages. Upon MR, respondent judge issued an order
providing that if defendants municipality and Bislig further wish to
ISSUE:
pursue the matter already disposed of, such should be elevated
to a higher court in accordance with the Rules of Court.
Whether ATO could be sued without the State’s consent.
ISSUE:
RULING:

Whether or not Municipality of San Fernando may be sued and is
liable to pay damages.
RULING:
No, respondent judge's dereliction in failing to resolve the issue
of non-suability did not amount to grave abuse of discretion. But
said judge exceeded his jurisdiction when it ruled on the issue of
liability. On suability of the Municipality: The respondent judge
did not commit grave abuse of discretion when in the exercise of
its judgment it arbitrarily failed to resolve the vital issue of non-
suability of the State in the guise of the municipality. However,
said judge acted in excess of his jurisdiction when in his
decision, he held the municipality liable for the quasi-delict
committed by its regular employee. The doctrine of non-suability
of the State is expressly provided for in Article XVI, Section 3 of
the Constitution, to wit: "the State may not be sued without its
consent." Stated in simple parlance, the general rule is that the
State may not be sued except when it gives consent to be sued.
Consent takes the form of express or implied consent. Express
consent may be embodied in a general law or a special law. The
standing consent of the State to be sued in case of money
claims involving liability arising from contracts is found in Act No.
3083. A special law may be passed to enable a person to sue
the government for an alleged quasi-delict.
Consent is implied when the government enters into business
contracts, thereby descending to the level of the other
contracting party, and also when the State files a complaint, thus
opening itself to a counterclaim. 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. On liability of
Municipality for the torts committed by its employee: It has
already been remarked that municipal corporations are suable
because their charters grant them the competence to sue and be
sued. Nevertheless, they are generally not liable for torts
committed by them in the discharge of governmental functions
and can be held answerable only if it can be shown that they
were acting in a proprietary capacity. In permitting such entities
to be sued, the State merely gives the claimant the right to show
that the defendant was not acting in its governmental capacity
when the injury was committed or that the case comes under the
exceptions recognized by law. Failing this, the claimant cannot
recover. In the case at bar, the driver of the dump truck of the
municipality insists that "he was on his way to the Naguilian river
to get a load of sand and gravel for the repair of San Fernando's
municipal streets." In the absence of any evidence to the
contrary, the regularity of the performance of official duty is
presumed pursuant to Section 3(m) of Rule 131 of the Revised
Rules of Court. Hence, We rule that the driver of the dump truck
was performing duties or tasks pertaining to his office.
Mun. of San Miguel vs. Fernandez
(G.R. No. L-61744, June 25, 1984)
FACTS:
Petitioner Department of Agriculture (DA) and Sultan Security
Agency entered into a contract for security services to be provided
by the latter to the said governmental entity. Pursuant to their
arrangements, guards were deployed by Sultan Security Agency
in the various premises of the DA. Thereafter, several guards filed
a complaint for underpayment of wages, nonpayment of 13th
month pay, uniform allowances, night shift differential pay, holiday
pay, and overtime pay, as well as for damages against the DA and
the security agency. The Labor Arbiter rendered a decision finding
the DA jointly and severally liable with the security agency for the
payment of money claims of the complainant security guards. The
DA and the security agency did not appeal the decision. Thus, the
decision became final and executory. The Labor Arbiter issued a
writ of execution to enforce and execute the judgment against the
property of the DA and the security agency. Thereafter, the City
Sheriff levied on execution the motor vehicles of the DA.
ISSUE:
Whether or not the doctrine of non-suability of the State applies in
the case.
RULING:
The basic postulate enshrined in the Constitution that “the 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. A sovereign is exempt from suit based 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. The rule
is not really absolute for it does not say that the State may not be
sued under any circumstances. The State may at times be sued.
The State’s consent may be given expressly or impliedly. Express
consent may be made through a general law or a special law.
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. But 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. A State may be said to
have descended to the level of an individual and can this be
deemed to have actually 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 the case, the DA has not
pretended to have assumed a capacity apart from its being
a governmental entity when it entered into the questioned contract;
nor that it could have, in fact, performed any act proprietary in
character. But, be that as it may, the claims of the complainant
security guards clearly constitute money claims. Act No. 3083
gives the consent of the State to be sued upon any moneyed
claim involving liability arising from contract, express or implied.
Pursuant, however, to Commonwealth Act 327, as amended by
PD 1145, the money claim must first be brought to the
Commission on Audit.
Mun. of Makati vs CA
(G.R. No. 89898-99, Oct. 1, 1990)
FACTS:
Petitioner Municipality of Makati expropriated a portion of land
owned by private respondents, Admiral Finance Creditors
Consortium, Inc. After proceedings, the RTC of Makati
determined the cost of the said land which the petitioner must
pay to the private respondents amounting to P5,291,666.00
minus the advanced payment of P338,160.00. It issued the
corresponding writ of execution accompanied with a writ of
garnishment of funds of the petitioner which was deposited in
PNB. However, such order was opposed by petitioner through a
motion for reconsideration, contending that its funds at the PNB
could neither be garnished nor levied upon execution, for to do
so would result in the disbursement of public funds without the
proper appropriation required under the law, citing the case of
Republic of the Philippines v. Palacio.The RTC dismissed such
motion, which was appealed to the Court of Appeals; the latter
affirmed said dismissal and petitioner now filed this petition for
review.
ISSUE:
Whether or not funds of the Municipality of Makati are exempt
from garnishment and levy upon execution.
RULING:
It is petitioner's main contention that the orders of respondent
RTC judge involved the net amount of P4,965,506.45, wherein
the funds garnished by respondent sheriff are in excess of
P99,743.94, which are public fund and thereby are exempted
from execution without the proper appropriation required under
the law. There is merit in this contention. In this jurisdiction, well-
settled is the rule that public funds are not subject to levy and
execution, unless otherwise provided for by statute. Municipal
revenues derived from taxes, licenses and market fees, and
which are intended primarily and exclusively for the purpose of
financing the governmental activities and functions of the
municipality, are exempt from execution. Absent a showing that
the municipal council of Makati has passed an ordinance
appropriating the said amount from its public funds deposited in
their PNB account, no levy under execution may be validly
effected. However, this court orders petitioner to pay for the said
land which has been in their use already. This Court will not
condone petitioner's blatant refusal to settle its legal obligation
arising from expropriation of land they are already enjoying. The
State's power of eminent domain should be exercised within the
bounds of fair play and justice.
City of Caloocan vs Judge Allarde
(G.R. 107271, Sept. 10, 2003)
FACTS:
In 1972, Mayor Marcial Samson of Caloocan abolished the
position of Assistant City Administrator and 17 other positions via
Ordinance No. 1749. The affected employees assailed the
legality of the abolition. The CFI in 1973 declared abolition illegal
and ordered the reinstatement of all the dismissed employees
and the payment of their back-wages and other emoluments.
The City Government appealed the decision but such
was dismissed.
In 1986 the City paid respondent Santiago P75,083.37 as partial
payment of her back-wages. The others were paid in full. In 1987
the City appropriated funds for her unpaid back salaries but the
City refused to release the money to Santiago.
On July 27, 1992 Sheriff Castillo levied and sold at public auction
one of the motor vehicles of the City Government for P100,000.
The amount was given to Santiago in partial satisfaction of her
claim. The City Government questioned the validity of the
auction sale, alleging that the properties of the municipality were
exempt from execution. Judge Allarde denied the motion and
directed the sheriff to levy and schedule at public auction 3
more vehicles of the City.
On October 5, 1993 the City Council of Caloocan passed
Ordinance No. 0134 which included the amount of P439,377.14
claimed by Santiago as back-wages, plus interest. Then
Caloocan Mayor Macario A. Asistio, Jr., however, refused to sign
the check intended as payment for respondent Santiago’s
claims.  This, despite the fact that he was one of the signatories
of the ordinance authorizing such payment.
Thus, on May 7, 1993. Judge Allarde ordered the Sheriff to
immediately garnish the funds of the City Government of
Caloocan corresponding to the claim of Santiago. Notice of
garnishment was forwarded to the PNB but the City Treasurer
sent an advice letter to PNB that the garnishment was illegal with
a warning that it would hold PNB liable for any damages which
may be caused by the withholding the funds of the city. PNB
opted to comply with the order of Judge Allarde and released to
the Sheriff a manager’s check amounting to P439,378.00.
ISSUE:
Whether or not the funds of City of Caloocan, in PNB, may be
garnished (i.e. exempt from execution), to satisfy Santiago’s
claim.
RULING:
Garnishment is considered a specie of attachment by means of
which the plaintiff seeks to subject to his claim property of the
defendant in the hands of a third person, or money owed by such
third person or garnishee to the defendant.
The rule is and has always been that all government
funds deposited in the PNB or any other official depositary of the
Philippine Government by any of its agencies or
instrumentalities, whether by general or special deposit, remain
government funds and may not be subject to garnishment or
levy, in the absence of a corresponding appropriation as required
by law:
Even though the rule as to immunity of a state from suit is
relaxed, the power of the courts ends when the judgment is
rendered. Although the liability of the state has been judicially
ascertained, the state is at liberty to determine for itself whether
to pay the judgment or not, and execution cannot issue on
a judgment against the state. Such statutes do not authorize a
seizure of state property to satisfy judgments recovered, and
only convey an implication that the legislature will recognize
such judgment as final and make provision for the satisfaction
thereof.
The rule is based on obvious considerations of public policy. The
functions and public services rendered by the State cannot be
allowed to be paralyzed or disrupted by the diversion of public
funds from their legitimate and specific objects, as appropriated
by law.
However, the rule is not absolute and admits of a well-
defined exception, that is, when there is a corresponding
appropriation as required by law. Otherwise stated, the rule on
the immunity of public funds from seizure or garnishment does
not apply where the funds sought to be levied under execution
are already allocated by law specifically for the satisfaction of the
money judgment against the government. In such a case, the
monetary judgment may be legally enforced by judicial
processes.
In the instant case, the City Council of Caloocan already
approved and passed Ordinance No. 0134, Series of 1992,
allocating the amount of P439,377.14 for respondent Santiago’s
back salaries plus interest. Thus this case fell squarely within the
exception. For all intents and purposes, Ordinance No. 0134,
Series of 1992, was the “corresponding appropriation as required
by law.” The sum indicated in the ordinance for Santiago were
deemed automatically segregated from the other
budgetary allocations of the City of Caloocan and earmarked
solely for the City’s monetary obligation to her. The judgment of
the trial court could then be validly enforced against such funds.