G.R. No.

185572 February 7, 2012

CHINA NATIONAL MACHINERY AND EQUIPMENT CORP.
(Group), Petitioner,
vs.
HON. CESAR D. SANTAMARIA, in his official capacity as Presiding
Judge of Branch 145, Regional Trial Court, respondents
SERENO, J.
FACTS: On September 14, 2002, the petitioner China National
Machinery & Equipment Corp (CNMEG) entered a
Memorandum of Understanding (MOU) with the North Luzon
Railway Corporation (Northrail), for the conduct of a feasibility
study on a possible railway from Manila to San Fernando, La
Union (Northrail Project).

On August 30, 2003, the Export Import Bank of China (Exim

Bank) and the Department of Finance of the Philippines (DOF)
entered a Memorandum of Understanding which China,
through The EXIM Bank agreed to extend Preferential Buyer’s
Credit to the Philippine Government in an amount not
exceeding USD 400,000,000.

CNMEG was designated as the prime contractor for the

Northrail Project by a letter sent to the DOF Secretary by the
Chinese Ambassador to the Philippines. Northrail and CNMEG
entered in a contract for the construction of Section 1, Phase 1
of the North Luzon Railway System from Caloocan to Malolos
on a turnkey basis. The contract price was pegged at USD
421,050,000. The Philippine government and EXIM Bank
entered a Loan Agreement which the EXIM bank agreed to
extend Preferential Buyer’s Credit in the amount of USD
400,000,00 to finance the Phase 1 of the Northrail Project.

Respondents filed a complaint for Annulment of Contract and

Injunction and/TRO against CNMEG. The RTC Br. 145 issued
an Order setting the case for hearing on the issuance of
injunctive reliefs. CNMEG filed an urgent Motion for
Reconsideration of this order. Before RTC Br. 145 could rule
 thereon, CNMEG filed a motion to Dismiss arguing that the
RTC did not have jurisdiction over the case for the reasons (a)
it was an agent of the Chinese government, making it immune
from suit, and (b) the subject matter, as the Northrail Project
was a product of an executive agreement.

The RTC branch issued an Omnibus Order denying CNMEG’s

Motion to Dismiss. CNMEG then filed a motion for
reconsideration which was denied by the trial court. CNMEG
then filed a petition for Centiorari with prayer Prayer for the
issuance of TRO and Writ og Preliminary Injunction. The
appellate court dismissed the petition for certiorari.
Subsequently, CNMEG filed a motion for Reconsideration bu
was again denied by the CA in a resolution.

ISSUE: W/N CNMEG is entitled to immunity from suit.

HELD: No, CNMEG is not entitled to immunity from suit, and the
Contract Agreement is not an executive agreement. Clearly, it
was CNMEG that initiated the undertaking, and not the Chinese
government. The Feasibility Study was conducted not because
of any diplomatic gratuity from or exercise of sovereign
functions by the Chinese government but was plainly a business
strategy employed by CNMEG with a view to securing this
commercial enterprise. The implementation of the Northrail
Project was intended to generate profit for CNMEG, with the
Contract Agreement placing a contract price of USD
421,050,000 for the venture. The use of the term "state
corporation" to refer to CNMEG was only descriptive of its
nature as a government-owned and/or -controlled corporation,
and its assignment as the Primary Contractor did not imply that
it was acting on behalf of China in the performance of the
latter's sovereign functions. To imply otherwise would result in
an absurd situation, in which all Chinese corporations owned
by the state would be automatically considered as performing
governmental activities, even if they are clearly engaged in
commercial or proprietary pursuits.
G.R. No. 152318 April 16, 2009
DEUTSCHE GESELLSCHAFT FÜR TECHNISCHE
ZUSAMMENARBEIT (GTZ), petitioner,
vs.
HON. COURT OF APPEALS, HON. ARIEL CADIENTE SANTOS,
Labor Arbiter of the Arbitration Branch, National Labor Relations
Commission et al., respondent
TINGA, J.

FACTS: The Federal Republic of Germany and the Republic of the

Philippines ratified an Agreement concerning Technical Co-
operation. The agreement affirmed the countries’ common
interest in promoting the technical and economic development
of their States and recognized the benefits to be derived by
both States from closer technical co-operation.”

On 10 December 1999, the Philippine government and the

German government, agreed to an Arrangement which
affirmed the common commitment of both governments to
promote jointly a project called Social Health Insurance
Networking and Empowerment (SHINE) which was designed
to "enable Philippine families especially poor ones and to
maintain their health and secure health care of sustainable
quality."

In September of 1999, Anne Nicolay (Nicolay), a Belgian

national, assumed the post of SHINE Project Manager. Private
respondent had a misunderstanding with the Project Manager
of SHINE. It was claimed that SHINE under Nicolay had
veered away from its original purpose to facilitate the
development of social health insurance by shoring up the
national health insurance program and strengthening local
initiatives, as Nicolay had refused to support local partners and
new initiatives on the premise that community and local
government unit schemes were not sustainable a philosophy
that supposedly betrayed Nicolay’s lack of understanding of
the purpose of the project.
 This led to an exchange of letters which was interpreted to be
the resignation of the private respondents. Private respondents
then filed a complaint for illegal dismissal to the labor arbiter.
GTZ, through counsel, filed a Motion to Dismiss, on the
ground that the Labor Arbiter had no jurisdiction over the case,
as its acts were undertaken in the discharge of the
governmental functions and sovereign acts of the Government
of the Federal Republic of Germany. This was opposed by
private respondents with the arguments that GTZ had failed to
secure a certification that it was immune from suit from the
Department of Foreign Affairs, and that it was GTZ and not
the German government which had implemented the SHINE
Project and entered into the contracts of employment. The
Labor Arbiter issued an Order denying the Motion to Dismiss.
The Order cited, among others, that GTZ was a private
corporation which entered into an employment contract; and
that GTZ had failed to secure from the DFA a certification as
to its diplomatic status.

GTZ did not file a motion for reconsideration to the Labor

Arbiters Decision or elevate said decision for appeal to the
NLRC. Instead, GTZ opted to assail the decision by way of a
special civil action for certiorari filed with the Court of
Appeals. The Court of Appeals promulgated a Resolution
dismissing GTZs petition, finding that judicial recourse at this
stage of the case is uncalled for, the appropriate remedy of the
petitioners being an appeal to the NLRC. Thus, the present
petition for review under Rule 45, assailing the decision and
resolutions of the Court of Appeals and of the Labor Arbiter.

ISSUE W/N GTZ can invoke State immunity from suit.

HELD: No, GTZ cannot invoke State immunity from suit even if their
activities performed pertaining to SHINE project are
government in nature. The principle of state immunity from
suit, whether a local state or a foreign state, is reflected in the
Constitution, which states that the State may not be sued
without its consent. In this case, GTZ’s counsel described
GTZ as the implementing agency of the Government of the
Federal Republic of Germany, however it does not
automatically mean that it can invoke State immunity from
suit. They had failed to adduce evidence, a certification from
Department of Foreign Affairs which could have been their
factual basis for its claim of immunity.

At the same time, it appears that GTZ was organized not

through a legislative public charter, but under private law, in
the same way that Philippine corporations can be organized
under the Corporation Code even if fully owned by the
Philippine government. The apparent equivalent under
Philippine law is that of a corporation organized under the
Corporation Code but owned by the Philippine government, or
a government-owned or controlled corporation without
original charter. And it bears notice that the Corporate Code
which provides that every corporation incorporated under this
Code has the power and capacity to sue and be sued in its
corporate name. The Court is thus holds and so rules that GTZ
consistently has been unable to establish with satisfaction that
it enjoys the immunity from suit generally enjoyed by its
parent country, the Federal Republic of Germany.
G.R. No. L-46930 June 10, 1988
DALE SANDERS, AND A.S. MOREAU, JR, petitioners,
vs.
HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I,
Court of First Instance of Zambales, Olongapo City, ANTHONY M.
ROSSI and RALPH L. WYERS, respondents.
CRUZ, J

FACTS: Petitioner Sanders was the special services director of the U.S.
Naval Station. Petitioner Moreau was the commanding officer
of the Subic Naval Base. Private respondent Rossi is an
American citizen with permanent residence in the Philippines.
Private respondent Rossi and Wyer were both employed as
game room attendants in the special services department of the
NAVSTA.

On October 3, 1975, the private respondents were advised that

their employment had been converted from permanent full-
time to permanent part-time. They instituted grievance
proceedings to the rules and regulations of the U.S.
Department of Defense. The hearing officer recommended for
reinstatement of their permanent full-time status.

However, in a letter addressed to petitioner Moreau, Sanders

disagreed with the hearing officer's report. The letter contained
the statements that: a) "Mr. Rossi tends to alienate most co-
workers and supervisors;" b) "Messrs. Rossi and Wyers have
proven, according to their immediate supervisors, to be
difficult employees to supervise;" and c) "even though the
grievant were under oath not to discuss the case with anyone,
(they) placed the records in public places where others not
involved in the case could hear."

Before the start of the grievance hearings, a-letter from

petitioner Moreau was sent to the Chief of Naval Personnel
explaining the change of the private respondent's employment
status. So, private respondent filed for damages alleging that
 the letters contained libelous imputations and that the
prejudgment of the grievance proceedings was an invasion of
their personal and proprietary rights.

However, petitioners argued that the acts complained of were

performed by them in the discharge of their official duties and
that, consequently, the court had no jurisdiction over them
under the doctrine of state immunity. However, the motion
was denied on the main ground that the petitioners had not
presented any evidence that their acts were official in nature.

ISSUE: W/N the petitioners were performing their official duties when
they did the acts for which they have been sued for damages.

HELD: Yes, the acts for which the petitioners are being called to
account were performed by them in the discharge of their
official duties. Sanders as director of the special services
department of NAVSTA, undoubtedly had supervision over its
personnel including the private respondents and had a hand in
their employment, work, assignments, discipline, dismissal
and other related matters. As for Moreau, what he is claimed
to have done was write the Chief of Naval Personnel for
concurrence with the conversion of the private respondent’s
type of employment even before the grievance proceedings
had even commenced. As the petitioners acted upon their
official duty and within their scope of authority, it is that of the
United States Government that is responsible for their acts,
and not the petitioners
G.R. No L-5156 March 11, 1945
CARMEN FESTEJO, petitioner
vs.
ISAIAS FERNANDO, Director of Bureau of Public Works, defendant
DIOKNO, J.
FACTS: The Petitioner, Carmen Festejo was the owner of a 9 ½
hectares of sugar land. The defendant, Isias Fernando as
Director of the Bureau of Public Works, took possession of
portions of the three parcels of land without authority from
the Court of First Instance (CFI) of Ilocos Sur where to
construct an irrigation canal on the portion of the land.

Petitioner prayed for the return or cause to be returned to the

possession of the portions of land unlawfully occupied. That
the respondent pays the petitioner a sum of Php 19,343.20 as
the value of the portions of land, pay damages of Php
9,756.19, and another Php 5,000.00 for attorney’s fees.

The respondent filed a motion to dismiss on the grounds that

he was acting upon his official capacity as Director of the
Bureau of Public Works and that the Court had no jurisdiction
and should have invalidated the claim since it was against the
Republic of the Philippines.

ISSUE: W/N the defendant was immune from suit.

HELD: No, the defendant was not immune from suit. The Civil Code
provides that any public officer or employee, or any private
individual, who directly or indirectly obstructs, defeats,
violates or in any manner impedes or impairs any of the
following rights and liberties of another person shall be liable
to the latter for damages. When he went outside the
boundaries of the right of way upon plaintiff's land and
damaged it or destroyed its former condition and usefulness,
he must be held to have designedly departed from the duties
imposed on him by law. Therefore, he was liable for the
deprivation of property without due process of law.
G.R. No. 101949 December 1, 1994
THE HOLY SEE, petitioner,
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the
Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES
ENTERPRISES, INC., respondents.
QIASON, J.
FACTS: The Holy See (Petitioner) exercises sovereignty over the
Vatican City in Rome, Italy, and is represented in the
Philippines by the Papal Nuncio;

The private respondent, Starbright Sales Enterprises, Inc., is a

domestic corporation engaged in the real estate business.

This petition arose from a controversy over a parcel of land

consisting of 6,000 square meters located in the Municipality
of Paranaque registered in the name of petitioner. Said lot was
contiguous with two other lots registered in the name of the
Philippine Realty Corporation (PRC).

The three lots were sold to Ramon Licup, through Msgr.

Domingo A. Cirilos, Jr., acting as agent to the sellers. Later,
Licup assigned his rights to the sale to private respondent.

In view of the refusal of the squatters to vacate the lots sold to

private respondent, a dispute arose as to who of the parties has
the responsibility of evicting and clearing the land of squatters.
Complicating the relations of the parties was the sale by
petitioner of Lot 5-A to Tropicana Properties and
Development Corporation (Tropicana).

Private respondent filed a complaint with the Regional Trial

Court, Branch 61, Makati, Metro Manila for annulment of the
sale of the three parcels of land, and specific performance and
damages against petitioner, represented by the Papal Nuncio,
and three other defendants: namely, Msgr. Domingo A.
Cirilos, Jr., the PRC and Tropicana.
 Petitioner and Msgr. Cirilos separately moved to dismiss the
complaint — petitioner for lack of jurisdiction based on
sovereign immunity from suit, and Msgr. Cirilos for being an
improper party. An opposition to the motion was filed by
private respondent.

The trial court issued an order denying, among others,

petitioner’s motion to dismiss after finding that petitioner
“shed off [its] sovereign immunity by entering into the
business contract in question” Petitioner forthwith elevated the
matter to us. In its petition, petitioner invokes the privilege of
sovereign immunity only on its own behalf and on behalf of
its official representative, the Papal Nuncio.

ISSUE: W/N the Holy See is immune from suit.

HELD: Yes, the Holy See is immune from suit. The Doctrine of State
immunity in the newer or restrictive theory states that 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 petitioner claimed that the acquisition and disposal of Lot

5-A were not made for profit, but it was acquired for the site
of its mission or the Apostolic Nunciature in the Philippines.
Lot 5A allegedly was acquired for the official place of
residence of the Papal Nuncio. However, when the informal
settlers refused to leave the property, the petitioner decided to
dispose the property not for commercial purpose.

The Republic of the Philippines has accorded the Holy See the
status of a foreign sovereign. The Holy See, through its
Ambassador, the Papal Nuncio, has had diplomatic
representations with the Philippine government since 1957.
Therefore, it is immune from suit.
G.R. No. L-26400 February 29, 1972
VICTORIA AMIGABLE, plaintiff-appellant,
vs.
NICOLAS CUENCA, as Commissioner of Public Highways and
REPUBLIC OF THE PHILIPPINES, defendants-appellees.
MAKALINTAL, J

FACT: Amigable was the registered owner of a lot covered by a

Transfer Certificate of Title, where no annotation in favor of
the government of any right or interest in the property appears
at the back of the certificate. Without prior expropriation or
negotiated sale, the government used 6167 square meters of
said lot for the construction of the Mango and Gorordo
Avenues.

Amigable’s counsel wrote the President of the Philippines,

requesting payment of the portion of her lot which had been
appropriated by the government. The claim was indorsed to
the Auditor General, who disallowed it in his 9th Indorsement.
A copy of said indorsement was transmitted to Amigable's
counsel by the Office of the President.

Amigable filed in the court a quo a complaint against the

Republic of the Philippines and Nicolas Cuenca, in his
capacity as Commissioner of Public Highways for the
recovery of ownership and possession of the 6,167 square
meters of land traversed by the Mango and Gorordo Avenues.
She also sought the payment of compensatory damages in the
sum of P50,000.00 for the illegal occupation of her land, moral
damages, attorney's fees, and the costs of the suit.

The defendants filed a joint answer denying the material

allegations of the complaint and interposing the following
affirmative defenses:(1) that the action was premature, the
claim not having been filed first with the Office of the Auditor
General; (2) that the right of action for the recovery of any
amount which might be due the plaintiff, if any, had already
 prescribed; (3) that the action being a suit against the
Government, the claim for moral damages, attorney's fees and
costs had no valid basis since as to these items the Government
had not given its consent to be sued; and (4) that inasmuch as
it was the province of Cebu that appropriated and used the area
involved in the construction of Mango Avenue, plaintiff had
no cause of action against the defendants.

ISSUE: W/N the appellant may properly sue the government under the
facts of the case.

HELD: Yes, the appellant may properly sue the government

The decision of the Supreme Court in one case ruled that

where the government takes away property from a private
landowner for public use without going through the legal
process of expropriation or negotiated sale, the aggrieved
party may properly maintain a suit against the government
without thereby violating the doctrine of governmental
immunity from suit without its consent.

Considering that no annotation in favor of the government

appears at the back of her certificate of title and that she has
not executed any deed of conveyance of any portion of her lot
to the government, the appellant remains the owner of the
whole lot. As registered owner, she could bring an action to
recover possession of the portion of land in question at any
time because possession is one of the attributes of ownership.

Therefore, the Doctrine of State Immunity does not apply, and

the government can be properly sued by the appellant.
G.R. No. 90478 November 21, 1991
REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT), petitioner,
vs.
SANDIGANBAYAN, BIENVENIDO R. TANTOCO, JR. and
DOMINADOR R. SANTIAGO, respondents.
NARVASA, J.

FACTS: The case was commenced on July 21, 1987, by the

Presidential Commission on Good Government (PCGG) in
behalf of the Republic of the Philippines. The complaint
which initiated the action was denominated one "for
reconveyance, reversion, accounting, restitution and
damages," and was avowedly filed pursuant to Executive
Order No. 14 of President Corazon C. Aquino. The case filed
was against private respondents Bienvenido Tantoco and
Dominador Santiago, et al.

Respondents jointly moved to strike out some portions of the

complaint and for bill of particulars of other portions, which
motion was opposed by the PCGG. The Sandiganbayan gave
the PCGG 45 days to expand its complaint to make more
specific certain allegations.

Respondents then presented a Motion to leave to file

interrogatories under Rule 25 of the Rules of Court. The
Sandiganbayan denied private respondents’ motions. Private
respondents filed an Answer to with Compulsory
Counterclaim. In response, the PCGG presented a Reply to
Counterclaim with Motion to Dismiss compulsory
counterclaim. Private respondents filed a pleading
denominated Interrogatories to Plaintiff and Amended
Interrogatories to Plaintiff as well as a motion for production
and inspection of documents.
 The Sandiganbayan admitted the Amended Interrogatories
and granted the motion for production and inspection of
documents respectively.

The PCGG moved for reconsideration, arguing that the

documents are privileged in character since they are intended
to be used against the PCGG and/or its Commission in
violation of Sec.4 of EO No. 1, V12:

(a) No civil action shall lie against the Commission or any

member thereof for anything done or omitted in the
discharge of the task contemplated by this Order.

(b) No member or staff by the Commission shall be

required to testify or produce evidence in any judicial,
legislative, or administrative proceedings concerning
matter within its official cognizance.

The Sandiganbayan promulgated two Resolutions. The first,

denying reconsideration of the Resolution allowing
production of the documents, and the second, reiterating, by
implication the permission to serve the amended
interrogatories on the plaintiff.

ISSUE: W/N PCGG can object the interrogatories filed against them
because they enjoy state immunity.

HELD: No, the state is of course immune from suit in the sense that
it cannot, as a rule, be sued without its consent. However, 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 of an act for the State. The
suggestion that the State makes no implied waiver of
immunity by filing a suit except when in doing so it acts in,
or in matters concerning, its proprietary or nongovernmental
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.
G.R. No. L-33112 June 15, 1978
PHILIPPINE NATIONAL BANK, petitioner,
vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of First
Instance, Branch III, La Union, et. al., respondents.

FERNANDO, Acting C.J.

FACT: The Philippine Virginia Tobacco Administration (PVTA), a

government owned and controlled corporation was issued a
writ of execution and garnishment of funds by respondent
Judge Javier Pabalan deposited on the Philippine National
Bank (PNB). The PNB then filed a certiorari case against Judge
Pabalan alleging that the court failed to recognize that the
questioned funds are of public character and therefore may not
be garnished. The PNB La Union Branch invoked the doctrine
of non-suability, putting a bar on the notice of garnishment.

ISSUE: W/N the PNB is immune from garnishment of funds.

HELD: No, it is to be admitted that under the present Constitution, what

was formerly implicit as a fundamental doctrine in
constitutional law has been set forth in express terms: ―The
State may not be sued without its consent. If the funds
appertained to one of the regular departments or offices in the
government, then, certainly such a provision would lie a bar to
garnishment. Such is not the case here. Garnishment would lie.
The Supreme Court, in a case brought by the same petitioner
precisely invoking such doctrine, left no doubt that the funds of
a public corporation could properly be made the object of a
notice of garnishment. It is well settled that when the
government enters commercial business, its abandons its
sovereign capacity and is to be treated like any other
corporation.
G.R. No. 154200 July 24, 2007
NATIONAL ELECTRIFICATION ADMINISTRATION and its
BOARD OF ADMINISTRATORS, Petitioners,
vs.
DANILO MORALES, Respondent.

AUSTRIA-MARTINEZ, J

FACT: Morales and 105 others, employees of NEA, filed a class suit
with the RTC against NEA for payment of rice allowance, meal
allowance, etc. pursuant to RA 6758. RTC favored Morales and
ordered a writ of execution to settle employees' claims. A
notice of garnishment was issued against the funds of NEA.
Willing to comply, NEA however claimed to have no funds to
cover the claim and needed to request for supplemental budget
from DBM. NEA filed a Motion to Quash, which was denied
by RTC but was granted an extension. Meanwhile, COA
advised NEA against making further payments because the
employees may not have been hired in the dates specifically
mentioned in RA 6758 that awards them of the benefits and that
RTC had no jurisdiction to order for the settlement under PD
1445. Morales appealed to the CA, who also ruled in his favor
as NEA cannot take shelter in PD 1445, because as a GOCC, it
had the right to be sued.

ISSUE: W/N CA erred in ordering the writ of execution against the

funds of NEA.

HELD:
G.R. No. 171182 August 23, 2012
UNIVERSITY OF THE PHILIPPINES et al., petitioner
vs.
HON. AGUSTIN S. DIZON, his capacity as Presiding Judge of the
Regional Trial Court of Quezon City, respondent

BERSAMIN, J.

FACT: University of the Philippines (UP) entered into a General

Construction Agreement with respondent Stern Builders
Corporation (Stern Builders) for the construction and
renovation of the buildings in the campus of the UP in Los
Bas. UP was able to pay its first and second billing. However,
the third billing worth P273,729.47 was not paid due to its
disallowance by the Commission on Audit (COA). Thus, Stern
Builders sued the UP to collect the unpaid balance.

On November 28, 2001, the RTC rendered its decision

ordering UP to pay Stern Builders. Then on January 16, 2002,
the UP filed its motion for reconsideration. The RTC denied
the motion. The denial of the said motion was served upon
Atty. Felimon Nolasco (Atty.Nolasco) of the UPLB Legal
Office on May 17, 2002. Notably, Atty. Nolasco was not the
counsel of record of the UP but the OLS inDiliman, Quezon
City.

Thereafter, the UP filed a notice of appeal on June 3, 2002.

However, the RTC denied due course to the notice of appeal
for having been filed out of time. On October 4, 2002, upon
motion of Stern Builders, the RTC issued the writ of
execution.

On appeal, both the CA and the High Court denied UPs

petition. The denial became final and executory. Hence, Stern
Builders filed in the RTC its motion for execution despite their
previous motion having already been granted and despite the
writ of execution having already issued. On June 11, 2003, the
 RTC granted another motion for execution filed on May 9,
2003 (although the RTC had already issued the writ of
execution on October 4, 2002). Consequently, the sheriff
served notices of garnishment to the UPs depositary banks and
the RTC ordered the release of the funds.

Aggrieved, UP elevated the matter to the CA. The CA

sustained the RTC. Hence, this petition.

ISSUE: W/N the funds of UP are subject to garnishment.

HELD: No, UP is a government instrumentality, performing the

State’s constitutional mandate of promoting quality and
accessible education.

Presidential Decree No. 1445 defines a "trust fund" as a fund

that officially comes in the possession of an agency of the
government or of a public officer as trustee, agent or
administrator, or that is received for the fulfillment of some
obligation.75 A trust fund may be utilized only for the
"specific purpose for which the trust was created, or the funds
received.”

The funds of the UP are government funds that are public in

character. They include the income accruing from the use of
real property ceded to the UP that may be spent only for the
attainment of its institutional objectives. Hence, the funds
subject of this action could not be validly made the subject of
the RTC’s writ of execution or garnishment. The adverse
judgment rendered against the UP in a suit to which it had
impliedly consented was not immediately enforceable by
execution against the UP, because suability of the State did not
necessarily mean its liability.