State Immunity

POLITICAL LAW REVIEW
KA-POLI NOTES Held: Yes. Both Sanders and Moreau were acting in their
official capacity; thus, they are covered by the Immunity of the
State doctrine. As for 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, the conversion of the private
respondents' type of employment even before the grievance
proceedings had even commenced is clearly official in nature.
It involves the special services department of NAVSTA. In fact,
the letter dealt with the financial and budgetary problems of
the department and contained recommendations for their
solution, including the re-designation of the private
respondents. There was nothing personal or private about it.
Given the official character of the letter, the petitioners were,

legally speaking, being sued as officers of the United States
government. As they have acted on behalf of that
government, and within the scope of their authority, it is that
This reviewer is made out of love and fear for the law. Please
government, and not the petitioners personally, that is
do not hesitate to share this material because sharing is caring
responsible for their acts.
and karma always has its ways. #NoToCrabs
EFFECT IN CASE THE TRIAL WILL PROCEED
Sanders vs. Veridiano Assuming that the trial can proceed and it is proved that the
G.R. No. L-46930. June 10, 1988 claimants have a right to the payment of damages, such award
will have to be satisfied not by the petitioners in their personal
Facts: capacities but by the United States government as their
➔ Sanders was the special services director of the U.S. principal. Consequently, that government should perform an
Naval Station (NAVSTA) in Olongapo City, while affirmative act to satisfy the judgment, viz, the appropriation
Petitioner Moreau was the commanding officer of the of the necessary amount to cover the damages awarded, thus
Subic Naval Base, which includes the said station. making the action a suit against that government without its
➔ Private respondents Rossi and Wyer are American consent.
citizens with permanent residence in the Philippines.
They were both employed as gameroom attendants in The doctrine of state immunity as applicable is also to foreign
the special services department of the NAVSTA. states sought to be subjected to the jurisdiction of our courts.
➔ On October 3, 1975, the private respondents were
advised that their employment had been converted from JUSTIFICATION OF THE DOCTRINE
permanent full-time to permanent part-time. Their Justice Holmes said that "there can be no legal right against
reaction was to protest this conversion and to institute the authority which makes the law on which the right
grievance proceedings conformably to the pertinent depends. In the case of foreign states, the rule is derived from
rules and regulations of the U.S. Department of Defense. the principle of the sovereign equality of states which wisely
They requested to be reinstated to permanent full-time admonishes that par in parem non habet imperium and that
status plus backwages. Sanders disagreed with the a contrary attitude would "unduly vex the peace of
protest. Hence, this case for damage. nations." Our adherence to this precept is formally expressed
in Article II, Section 2, of our Constitution, where we reiterate
➔ The private respondents made it clear that the
from our previous charters that the Philippines "adopts the
petitioners were being sued in their private or personal
generally accepted principles of international law as part of
capacity.
the law of the land.
➔ The petitioners argued that the acts complained of were
performed by them in the discharge of their official
However, the rule regarding suits against public officers is not
duties and that, consequently, the court had no
absolute. The following exceptions are as follows:
jurisdiction over them under the doctrine of state
➔ A public officer may be sued as such to compel him to
immunity.
do an act required by law.
Issue: W/N they are covered by the Immunity against Suit ➔ To restrain a Cabinet member, for example, from
principle. enforcing a law claimed to be unconstitutional.
➔ To compel the national treasurer to pay damages from
an already appropriated assurance fund.
POLI RECIT Qs / STATE IMMUNITY

KA-POLI NOTES 2020-2021
Dione Maghirang / Lara Murallos / Tin Narne-Pedralvez / Fergie Villanueva
➔ To compel the commissioner of internal revenue to pertains to the government of a foreign state, as in the present
refund tax over-payments from a fund already available case.
for the purpose.
➔ To secure a judgment, in general, that the officer THE DOCTRINE OF STATE IMMUNITY APPLIES TO FOREIGN
impleaded may satisfy himself without the government STATES SUED IN THIS JURISDICTION
itself having to do a positive act to assist him. There should be no question by now that such a complaint
➔ To implead the government by the aggrieved party, cannot prosper unless the government sought to be held
when the government itself has violated its own laws, ultimately liable has given its consent to be sued. So we have
even without first filing his claim with the Commission ruled not only in Baer but in many other decisions where we
on Audit as normally required, as the doctrine of state upheld the doctrine of state immunity as applicable not only
immunity "cannot be used as an instrument for to our own government but also to foreign states sought to
perpetrating an injustice." be subjected to the jurisdiction of our courts.
In the case at bar, to repeat, comes under the general rule and Republic of the Philippines vs. Sandoval
not under any of the recognized exceptions. The government G.R. No. 84607. March 19, 1993
of the United States has not given its consent to be sued for
the official acts of the petitioners, who cannot satisfy any Facts:
judgment that may be rendered against them. As it is the ➔ The farmers and their sympathizers presented their
American government itself that will have to perform the demands for what they called "genuine agrarian reform".
affirmative act of appropriating the amount that may be The KMP, led by its national president, Jaime Tadeo,
adjudged for the private respondents, the complaint must be presented their problems and demands, among which
dismissed for lack of jurisdiction. were: (a) giving lands for free to farmers; (b) zero
retention of lands by landlords; and (c) stop
A final consideration is that since the questioned acts were amortizations of land payments.
done in the Olongapo Naval Base by the petitioners in the ➔ There was no dialogue between the rallyists and the
performance of their official duties and the private government forces. Upon approaching the intersections
respondents are themselves American citizens, it would seem of Legarda and Mendiola, the marchers began pushing
only proper for the courts of this country to refrain from the police lines and penetrated and broke through the
taking cognizance of this matter. first line of the CDC contingent.
➔ As a result, 12 marchers were officially confirmed dead,
JURISPRUDENCE CITED IN THE CASE although according to Tadeo, there were thirteen (13)
Festejo vs. Fernando – where the Court held that a Bureau dead, but he was not able to give the name and address
Director could be sued for damages on a personal tort of said victim. Thirty-nine (39) were wounded by
committed by him when he acted without or in excess of gunshots and twelve (12) sustained minor injuries, all
authority in forcibly taking private property without paying belonging to the group of the marchers.
just compensation, therefore, although he did convert it into ➔ President Aquino issued Administrative Order No. 11
a public irrigation canal. It was not necessary to secure the which created the Citizen’s Mendiola Commission for the
previous consent of the state, nor could it be validly purpose of conducting an investigation for the disorders,
impleaded as a party defendant, as it was not responsible for death, and casualties that took place.
the defendant's unauthorized act. ➔ The most significant recommendation of the
commission was for the deceased and other victims of
Doctrine: The State may not be sued without its consent. But Mendiola Incident to be compensated by the
this is not an absolute rule. Government.
➔ Due to the recommendation, petitioners filed a formal
ACTS COMMITTED BY THE OFFICERS IN THEIR OFFICIAL letter of demand for compensation from the government
CAPACITY ARE COVERED BY STATE IMMUNITY to which the latter did not take heed.
It is stressed at the outset that the mere allegation that a ➔ The group then instituted an action for damages against
government functionary is being sued in his personal capacity the Republic of the Philippines together with military
will not automatically remove him from the protection of the officers and personnel involved in the Mendiola
law of public officers and, if appropriate, the doctrine of state Incident.
immunity. By the same token, the mere invocation of official ➔ Respondent Judge Sandoval dismissed the complaint as
character will not suffice to insulate him from suability and against the Republic of the Philippines on the basis that
liability for an act imputed to him as a personal tort there was no waiver by the state.
committed without or in excess of his authority. These well-
settled principles are applicable not only to the officers of the Issue: W/N the State has waived its immunity from suit.
local state but also where the person sued in its courts
Held: No. This is not a suit against the State with its consent.

Firstly, the recommendation made by the Commission government forces in the use of firearms. Moreover, the
regarding indemnification of the heirs of the deceased and members of the police and military crowd dispersal units
the victims of the incident by the government does not in any committed a prohibited act under B.P. Blg. 880 as there was
way mean that liability automatically attaches to the State. unnecessary firing by them in dispersing the marchers.
A.O. 11 that the purpose of creating the Commission was to While it is true that nothing is better settled than the general
have a body that will conduct an "investigation of the rule that a sovereign state and its political subdivisions cannot
disorder, deaths and casualties that took place." be sued in the courts except when it has given its consent, it
cannot be invoked by both the military officers to release
In the exercise of its functions, A.O. 11 provides guidelines, them from any liability, and by the heirs and victims to
and what is relevant to Our discussion reads: Its conclusions demand indemnification from the government.
regarding the existence of probable cause for the commission
of any offense and of the persons probably guilty of the same The principle of state immunity from suit does not apply, as in
shall be sufficient compliance with the rules on preliminary this case, when the relief demanded by the suit requires no
investigation and the charges arising therefrom may be filed affirmative official action on the part of the State nor the
directly with the proper court. affirmative discharge of any obligation which belongs to the
State in its political capacity, even though the officers or
In effect, whatever may be the findings of the Commission, agents who are made defendants claim to hold or act only by
the same shall only serve as the cause of action in the event virtue of a title of the state and as its agents and servants. This
that any party decides to litigate his/her claim. Therefore, the Court has made it quite clear that even a "high position in the
Commission is merely a preliminary venue. The Commission government does not confer a license to persecute or
is not the end in itself. Whatever recommendation it makes recklessly injure another."
cannot in any way bind the State immediately, such
recommendation not having become final and, executory. Under our Constitution the principle of immunity of the
This is precisely the essence of it being a fact-finding body. government from suit is expressly provided in Article XVI,
Section 3.
Secondly, whatever acts or utterances that then President The principle is based on the very essence of sovereignty, and
Aquino may have done or said, the same are not tantamount on the practical ground that there can be no legal right as
to the State having waived its immunity from suit. against the authority that makes the law on which the right
depends.
The President's act of joining the marchers, days after the
incident, does not mean that there was an admission by the It also rests on reasons of public policy — that public service
State of any liability. In fact, to borrow the words of petitioners would be hindered, and the public endangered, if the
(Caylao group), "it was an act of solidarity by the government sovereign authority could be subjected to law suits at the
with the people". instance of every citizen and consequently controlled in the
uses and dispositions of the means required for the proper
The speech of President Aquino that the government would administration of the government.
address the grievances of the rallyists. By this alone, it cannot
be inferred that the State has admitted any liability, much less Doctrine: The principle of state immunity from suit does not
can it be inferred that it has consented to the suit. apply when the relief demanded by the suit requires no
affirmative official action on the part of the State nor the
Thirdly, the case does not qualify as a suit against the State. affirmative discharge of any obligation which belongs to the
State in its political capacity, even though the officers or
Some instances when a suit against the State is proper are: agents who are made defendants claim to hold or act only by
➔ When the Republic is sued by name. virtue of a title of the state and as its agents and servants.
➔ When the suit is against an unincorporated government
agency. What is the Doctrine of State Immunity or The Royal
➔ When the suit is on its face against a government officer Prerogative of Dishonesty?
but the case is such that ultimate liability will belong not The doctrine reflects nothing less than a recognition of the
to the officer but to the government. sovereign character of the State and an express affirmation of
the unwritten rule effectively insulating it from the jurisdiction
The Republic in this case may be sued by its name; however, of courts. It is based on the very essence of sovereignty.
the ultimate liability does not pertain to the government.
Although the military officers and personnel, then party The doctrine is derisively called “the royal prerogative of
defendants, were discharging their official functions when the dishonesty” because it grants the prerogative to defeat any
incident occurred, their functions ceased to be official the legitimate claim against it by simply invoking its non-suability.
moment they exceeded their authority. Based on the It has been explained in its defense, however, that a continued
Commission findings, there was lack of justification by the adherence to the doctrine of non-suability cannot be

deplored, for the loss of governmental efficiency and the Are all actions or cases filed against the State covered by the
obstacle to the performance of its multifarious functions Doctrine of State Immunity?
would be far greater in severity than the inconvenience that No. When the State gives consent to be sued:
may be caused private parties, if such fundamental principle ➔ Express Consent – It can be given only by an act of the
is to be abandoned and the availability of judicial remedy is legislative body, in a general or special law. Consent of
not to be accordingly restricted. the State to be sued must be embodied in a duly enacted
statute and may not be given by a mere counsel of the
What are the legal bases? government.
➔ In the Philippines – Article XVI, Section 3. ♦ General Law – Money claims arising from
➔ Jurisprudential basis – Royal Prerogative of Dishonesty contracts which could serve as a basis of civil
(by Justice Holmes) Justice Holmes said that a sovereign action between private parties must be first
is exempt from suit, not because of any formal filed with the COA before a suit may be filed
conception or obsolete theory, but on the logical and in court. The COA must act upon the claim
practical ground that there can be no legal right as within 60 days. Rejection of the claims
against the authority that makes the law on which the authorizes the claimant to elevate the matter
right depends. There can be no legal right against the to the Supreme Court on certiorari. LGUs have
authority which makes the law on which the right the power to sue and be sued.
depends ♦ Special Law – By virtue of P.D. No,1620, the
➔ Sociological basis – Providence vs. Republic, the grant of immunity to International Rice
propensity of the people to litigate; waste of time, Research Institute (IRR) is clear and
money, and resources. unequivocal, and expressed by its Director
With the well-known propensity of the people to go to court General is the only way by which it may
at the least provocation, there will be loss of time and energy. relinquish or abandon this immunity.
If people will not be restrained from initiating action against ➔ Implied Consent –
the state, the state will end up just appearing in court to When the State commences litigation, it becomes vulnerable
defend itself against multiple lawsuits. to counterclaim.
♦ Exception – When the state intervenes not for
The state cannot be sued without its consent is not based on the purpose of asking for any affirmative relief,
any formal conception but rather on a practical and logical but only for the purposes of resisting the claim
ground that There can be no legal right against the authority precisely because of immunity from suit.
which makes the law on which the right depends. When the State enters into a business contract in its
proprietary capacity.
The principle on State immunity does not spring from any ♦ Acts Jure Gestionis – By right of economic or
formal recognition by the constitutional system. It is nothing business relations commercial or proprietary
more and nothing less than a recognition of the sovereignty acts. The state may be sued.
of the state.
♦ Act Jure Imperii – By right of sovereign power
and in the exercise of sovereign functions;
Is the Doctrine of State Immunity applicable to foreign States?
there is no implied consent to be sued.
On what ground?
♦ In exercising the power of eminent domain,
Yes. Our courts have no jurisdiction against foreign sovereigns
the State exercises a power jus imperii, where
because they are treated as equals with our sovereign
property has been taken without just
state. Under par in parem non habet imperium (one cannot
compensation being paid. The defense of
impose its will on another) a foreign state cannot kneel to our
immunity from suit cannot be set up in an
local courts because as an equal, our courts have no authority
action for payment by the owner.
over them.
When it would be inequitable for the State to claim
immunity.
In the case of Sanders vs Veridiano, the Supreme Court
applied the doctrine of sovereign immunity not only to our
The powers of a municipal corporation are two-fold in
own government but also to foreign states sought to be
character:
subjected to the jurisdiction of our courts. The SC directed our
courts not to interfere because it involves a foreign sovereign ➔ Public Government
even if the claimant is a citizen of that foreign state. ➔ Corporate Propriety – A municipal corporation can be
held liable to third persons ex contractu or suit upon
Is it absolute that the State cannot be sued? contracts and its tort.
No. As a rule, when the state files a suit, it becomes vulnerable
to suits or counterclaims. But not if the State intervenes in a
suit not for the purpose of resisting the claim precisely
because of State immunity.

What are the three kinds of consent so that the State may be What is the ultimate test to determine whether it is a suit
sued? against the State?
➔ The Republic is sued by name. ➔ W/N the action demands affirmative relief from the State
➔ Unincorporated Government agency. ➔ W/N if the relief is granted, who will be ultimately liable
➔ It is an official act but liability rests on the government, ➔ Regardless of who is named as defendants, if it produces
and not on the officer adverse consequences on the public treasury, whether in
the disbursement of funds of loss of property, the public
Rules regarding Suits against Government agencies: official proceeded against not being liable in his
1. When Suit is against an incorporated Agency personal capacity.
a. An Incorporated Agency has a charter of its
own and possesses a juridical personality How can the State give its consent?
independent of the State. ➔ Express Consent
b. If its character provides that it has the right to ➔ Implied Consent
sue and be sued, it is an express consent and
it is suable. This includes a suit for tort. Are the acts of the President considered implied consent?
c. If its charter is silent, inquire into its function No. Waiver of state immunity is legislative in nature, and
based on the purpose for which it was created. therefore the same cannot be given by the President or other
i. Proprietary – If the purpose is to administrative officers.
obtain special corporate benefits or
earn pecuniary profit, suable; Whatever the acts or utterances that then President Corazon
ii. Government – If it is in the interest Aquino may have done or said, the same are not tantamount
of health, safety and for the to the State having waived its immunity from suit. The act of
advancement of public good and the President joining the marchers was just an act of solidarity
welfare, affecting the public in by the government with the people.
general, not suable.
2. When Suit is against an Unincorporated Agency Does Consent to be sued or Waiver of Immunity mean that
a. An Unincorporated Agency has no juridical the state is admitting its liability?
personality independent of the State No. By consenting to be sued, the State does not necessarily
b. When it primarily performs government admit that is liable. It only means that the State is merely
functions: Not suable without State consent giving the plaintiff a chance to prove that the State is liable
even if performing proprietary function but the State retains the rights to raise all lawful defenses.
incidentally.
c. When it performs primarily proprietary Consent to be sued does not mean admission of liability, as
functions. this depends on evidence presented before the court. Consent
i. General Rule: Suable to be sued does not include consent to the execution of
ii. Exceptions: When the proprietary judgment against it.
functions are indispensable in the
discharge of its governmental What are the two concepts of sovereign immunity?
functions, it is not suable. ➔ Classical or Absolute Theory – A sovereign cannot,
without its consent, be made a respondent in the courts
Are there actions that can be filed against the State? of another sovereign.
➔ To compel the performance of an action mandated by ➔ Restrictive Theory – The immunity of the sovereign is
law recognized only with regard to public act or acts jure
➔ To prevent an act in violation of the Constitution imperii of a state but not with regard to private acts or
➔ To compel the COA to release funds already disbursed acts jure gestionis.
➔ To file against public officers, if the suit is personal
against the public officers The restrictive application of State immunity is proper only
➔ To demand for tax refunds when the proceedings arise out of commercial transactions or
➔ If the State violates its own laws (perpetrate injustice) economic affairs.
Are these actions conclusive? A state may be said to have descended to the level of an
No. individual and can thus be deemed to have tacitly an
individual and can thus be deemed to have tacitly given its
Can it be controverted? consent to be sued only when it enters into a business
Yes, if the officers acted in excess of their authority. contract.
It does not apply where the contract relates to the exercise of

its sovereign.

Festejo vs. Fernando Do we follow specific procedures?
G.R. No. L-5156. March 11, 1954 Yes. The doctrine of State immunity is also available to foreign
States in so far as they are sought to be sued in the courts of
Facts: the local State. Submission by a foreign state to local
jurisdiction must be clear and unequivocal. It must be given
➔ Plaintiff Carmen Festejo filed an action against
explicitly or by necessary implication.
defendant Isaias Fernando, Director of Bureau of Public
Works for unlawfully taking possession of a portion of
Does the Solicitor General have the capacity in determining
her three parcels of land and causing the construction of
the immunity of foreign States or officers?
an irrigation canal without obtaining right of way and
No. The DFA is the highest executive department with
without her consent or knowledge.
competence and authority to determine the immunity of
➔ The lower court ruled in favor of plaintiff Festejo.
foreign state or officers as held in the case of Holy See. It is a
➔ On appeal, defendant Fernando invoked his being a
recognized principle of international law and under our
public officer of the government of the Philippines and
system of separation of powers that diplomatic immunity is
thus, enjoys immunity from suit and should be absolved
essentially a political question and courts should refuse to
from liability for damages.
look beyond a determination by the executive branch of the
government, and where the plea of diplomatic immunity is
Issue: W/N defendant Fernando may invoke immunity from
recognized and affirmed by the executive branch of the
suit. government, it is then the duty of the courts to accept the
claim of immunity upon appropriate suggestion by the
Held: No. The evidence and conceded facts found that, in the
principal law officer of the government, the Solicitor General
trespass on plaintiff's land, the defendant committed acts
in this case, or other officer acting under his direction.
outside the scope of his authority. When he went outside the
boundaries of the right of way upon plaintiff's land and
Also as expressly enunciated in the case of Deutsche
damaged it or destroyed its former condition and usefulness,
Gesellschaft, this determination by the OSG, or by the OGCC
he must be held to have designedly departed from the duties
for that matter, does not inspire the same degree of
imposed on him by law.
confidence as a DFA certification. Even with a DFA
certification, however, it must be remembered that this Court
Ordinarily, the officer or employee committing the tort is
is not precluded from making an inquiry into the intrinsic
personally liable and may be sued as any other citizen and be
correctness of such certification.
held answerable for whatever injury.
If an officer, even while acting under color of his office, U.S. vs. Guinto
exceeds the power conferred on him by law, he cannot shelter G.R. No. 76607. February 26, 1990
himself under the plea that he is a public agent.
Facts:
It is a general rule that an officer-executive, administrative ➔ These cases have been consolidated because they all
quasi-judicial, ministerial, or otherwise who acts outside the involve the doctrine of state immunity. The United States
scope of his jurisdiction and without authorization of law may of America was not impleaded in the complaints below
thereby render himself amenable to personal liability in a civil but has moved to dismiss on the ground that they are in
suit. effect suits against it to which it has not consented but
for the purposes of this topic will discuss GR No. 76607
If he exceeds the power conferred on him by law, he cannot with regard barber service in the US Base Airforce in Clair
shelter himself by the plea that he is a public agent acting Air Base.
under the color of his office, and not personally. In the eye of ➔ In the first case, the private respondents are suing several
the law, his acts then are wholly without authority. officers of the US Airforce Stationed in Clark Air Base in
connection with the bidding conducted by them for
Doctrine: It is a general rule that an officer-executive, contracts for barber services in the base.
administrative quasi-judicial, ministerial, or otherwise who ➔ The private respondents are suing several officers of the
acts outside the scope of his jurisdiction and without U.S. Air Force stationed in Clark Air Base in connection
authorization of law may thereby render himself amenable to with the bidding conducted by them for contracts for
personal liability in a civil suit. If he exceeds the power barbering services in the said base.
conferred on him by law, he cannot shelter himself by the plea ➔ The bidding was won by Ramon Dizon, over the
that he is a public agent acting under the color of his office, objection of the private respondents.
and not personally. In the eye of the law, his acts then are ➔ The private respondents complained to the Philippine
wholly without authority. Area Exchange (PHAX). That Dizon was already operating
this concession.

➔ On June 30,1986, the private respondents filed a Doctrine: Under Generally Accepted Principles of International
complaint in the court below to compel PHAX and the Law under the Doctrine of Incorporation. Under this doctrine,
individual petitioners to cancel the award to defendant as accepted by the majority of states, such principles are
Dizon, to conduct a rebidding for the barbershop deemed incorporated in the law of every civilized state as a
concessions. condition and consequence of its membership in the society
➔ From the pleadings the relationship between the of nations. Upon its admission to such society, the state is
plaintiffs as well as the defendants, including the US automatically obligated to comply with these principles in its
Government in that prior to the bidding or solicitation in relations with other states. In the case of the foreign state
question, there was a binding contract between the sought to be impleaded in the local jurisdiction, the added
plaintiffs as well as the defendants, including the US inhibition is expressed in the maxim par in parem, non habet
Government. imperium. All states are sovereign equals and cannot assert
➔ By virtue of said contract of concession, it is the Court’s jurisdiction over one another. A contrary disposition would, in
understanding that neither the US Government nor the the language of a celebrated case, "unduly vex the peace of
herein principal defendants would become the nations." While the doctrine appears to prohibit only suits
employer/s of the plaintiffs but that the latter are the against the state without its consent, it is also applicable to
employers themselves of the barbers, etc. with the complaints filed against officials of the state for acts allegedly
employer, the plaintiffs herein, remitting the stipulated performed by them in the discharge of their duties.
percentage of commissions to the Philippine Area
Exchange. The rule is that if the judgment against such officials will
➔ The Court, further, is of the view that Article XVIII of the require the state itself to perform an affirmative act to satisfy
RP-US Bases Agreement does not cover such kind of the same, such as the appropriation of the amount needed to
services falling under the concessionaire ship, such as a pay the damages awarded against them, the suit must be
barber shop concession. regarded as against the state itself although it has not been
formally impleaded.
Issue: W/N the Doctrine of State Immunity applicable in the
case at bar. In such a situation, the state may move to dismiss the
complaint on the ground that it has been filed without its
Held: No. The barbershops subject to the concessions granted consent.
by the United States government are commercial enterprises
operated by private persons. The doctrine is sometimes derisively called "the royal
prerogative of dishonesty" because of the privilege it grants
They are not agencies of the United States Armed Forces nor the state to defeat any legitimate claim against it by simply
are their facilities demandable as a matter of right by the invoking its non-suability.
American servicemen. These establishments provide for the
grooming needs of their customers and offer not only the In fact, the doctrine is not absolute and does not say the state
basic haircut and shave (as required in most military may not be sued under any circumstance. On the contrary, the
organizations) but such other amenities as shampoo, rule says that the state may not be sued without its consent,
massage, manicure and other similar indulgences. And all for which clearly imports that it may be sued if it consents.
a fee.
WAIVER OF STATE IMMUNITY
Interestingly, one of the concessionaires, private respondent ➔ The consent of the state to be sued may be manifested
Valencia, was even sent abroad to improve his tonsorial expressly or impliedly.
business, presumably for the benefit of his customers. No less ➔ Express consent may be embodied in a general law or a
significantly, if not more so, all the barbershop special law.
concessionaires are, under the terms of their contracts, ➔ Consent is implied when the state enters into a contract
required to remit to the United States government fixed or it itself commences litigation.
commissions in consideration of the exclusive concessions ➔ The general law waiving the immunity of the state from
granted to them in their respective areas. suit is found in Act No. 3083, under which the Philippine
government "consents and submits to be sued upon any
This being the case, the petitioners cannot plead any moneyed claim involving liability arising from contract,
immunity from the complaint filed by the private respondents express or implied, which could serve as a basis of civil
in the court below. The contracts in question being decidedly action between private parties."
commercial, the conclusion reached in the United States of
➔ In Merritt v. Government of the Philippine Islands, a
America v. Ruiz case cannot be applied here.
special law was passed to enable a person to sue the
government for an alleged tort. When the government
enters into a contract, it is deemed to have descended to
the level of the other contracting party and divested of
its sovereign immunity from suit with its implied consent.

➔ Waiver is also implied when the government files a ➔ The said article establishes a rule of liability, not suability.
complaint, thus opening itself to a counterclaim. The government may be held liable under this rule only
➔ Express consent is effected only by the will of the if it first allows itself to be sued through any of the
legislature through the medium of a duly enacted accepted forms of consent.
statute. We have held that not all contracts entered into ➔ Moreover, the agent performing his regular functions is
by the government will operate as a waiver of its non- not a special agent even if he is so denominated, as in
suability; distinction must be made between its the case at bar.
sovereign and proprietary acts. ➔ No less important, the said provision appears to regulate
➔ As for the filing of a complaint by the government, only the relations of the local state with its inhabitants
suability will result only where the government is and, hence, applies only to the Philippine government
claiming affirmative relief from the defendant. and not to foreign governments impleaded in our courts.
RESTRICTIVE THEORY OF STATE IMMUNITY Veterans Manpower vs. CA

➔ The restrictive application of State immunity is proper G.R. No. 91359. September 25, 1992
only when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial Facts:
activities or economic affairs. ➔ A suit was filed against the PC Chief for failure to act on
➔ A state will be deemed to have impliedly waived its non- the request by petitioner seeking to set aside the
suability if it has entered into a contract in its proprietary findings of PADPAO expelling it from PADPAO and
or private capacity. considering its application for renewal of its license even
➔ It is only when the contract involves its sovereign or without a certificate of membership from PADPAO.
governmental capacity that no such waiver may be ➔ VMPSI filed a complaint in the Regional Trial Court at
implied. Makati, Metro Manila, praying the court to: "Declare null
➔ This was our ruling in United States of America v. Ruiz: and void the amendment of Section 4 of R.A. No. 5487,
where the transaction in question dealt with the by PD No. 11 exempting organizations like PADPAO
improvement of the wharves in the naval installation at from the prohibition that no person shall organize or
Subic Bay. As this was a clearly governmental function, have an interest in more than one agency.
we held that the contract did not operate to divest the ➔ Memorandum of Agreement was executed by PADPAO
United States of its sovereign immunity from suit. and the PC Chief, which fixed the minimum monthly
➔ Stated differently, a State may be said to have descended contract rate per guard for eight (8) hours of security
to the level of an individual and can thus be deemed to service per day.
have tacitly given its consent to be sued only when it ➔ VMPSI wrote the PC Chief requesting him to consider
enters into business contracts. VMPSI’s application for renewal of its license, even
➔ It does not apply where the contract relates to the without a certificate of membership from PADPAO.
exercise of its sovereign functions. ➔ As the PC Chief did not reply. On the same date, the court
➔ In this case the projects are an integral part of the naval issued a restraining order enjoining the PC Chief and PC-
base which is devoted to the defense of both the United SUSIA "from committing acts that would result in the
States and the Philippines, indisputably a function of the cancellation or non-renewal of VMPSI’s license"
government of the highest order; they are not utilized
for nor dedicated to commercial or business purposes. Issue: W/N VMPSI’s complaint against the PC Chief and PC-
SUSIA is a suit against the State without its consent.
SUABILITY IS NOT SYNONYMOUS WITH LIABILITY
➔ The private respondent invokes Article 2180 of the Civil Held: Yes. The State may not be sued without its consent
Code which holds the government liable if it acts (Article XVI, Section 3, of the 1987 Constitution). Invoking this
through a special agent. The argument, it would seem, is rule, the PC Chief and PC-SUSIA contend that, being
premised on the ground that since the officers are instrumentalities of the national government exercising a
designated "special agents," the United States primarily governmental function of regulating the
government should be liable for their torts. organization and operation of private detective, watchmen, or
➔ Suability depends on the consent of the state to be sued, security guard agencies, said official (the PC Chief) and agency
liability on the applicable law and the established facts. (PC-SUSIA) may not be sued without the Government’s
The circumstance that a state is suable does not consent.
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. Especially in this case because VMPSI seeks actual and
➔ Liability is not conceded by the mere fact that the state compensatory damages. Even if its action prospers, the
has allowed itself to be sued. When the state does waive payment of its monetary claims may not be enforced because
its sovereign immunity, it is only giving the plaintiff the the State did not consent to appropriate the necessary funds
chance to prove, if it can, that the defendant is liable. for that "While the doctrine appears to prohibit only suits

against the state without its consent, it is also applicable to Stipulation of Contracts?
complaints filed against officials of the state for acts allegedly Only the Congress can expressly waive immunity.
performed by them in the discharge of their duties. The rule
is that if the judgment against such officials will require the What are the two kinds of express consent?
state itself to perform an affirmative act to satisfy the same, ➔ Consent of the State to be sued must be embodied in a
such as the appropriation of the amount needed to pay the duly enacted statute and may not be given by a mere
damages awarded against them, the suit must be regarded as counsel of the government.
against the state itself although it has not been formally ♦ General Law – Money claims arising from
impleaded." contracts which could serve as a basis of civil
action between private parties must be first
A public official may sometimes be held liable in his personal filed with the COA before a suit may be filed
or private capacity if he acts in bad faith, or beyond the scope in court. The COA must act upon the claim
of his authority or jurisdiction (Shauf v. Court of Appeals, within 60 days. Rejection of the claims
supra), however, since the acts for which the PC Chief and PC- authorizes the claimant to elevate the matter
SUSIA are being called to account in this case, were performed to the Supreme Court on certiorari.
by them as part of their official duties, without malice, gross ➔ LGUs have the power to sue and be sued.
negligence, or bad faith, no recovery may be had against them
♦ Special Law – By virtue of P.D. No,1620, the
in their private capacities.
grant of immunity to International Rice
Research Institute (IRR) is clear and
"The Memorandum of Agreement dated May 12, 1986 was
unequivocal, and expressed by its Director
entered into by the PC Chief in relation to the exercise of a
General is the only way by which it may
function sovereign in nature.
relinquish or abandon this immunity.
The correct test for the application of state immunity is not

Is a memorandum of agreement an express waiver?
the conclusion of a contract by the State but the legal nature
No. The Memorandum of Agreement entered into by the PC
of the act. This was clearly enunciated in the case of United
Chief and PADPAO was intended to professionalize the
States of America v. Ruiz where the Hon. Supreme Court held:
industry and to standardize the salaries of security guards as
"The restrictive application of State immunity is proper only
well as the current rates of security services, clearly, a
when the proceedings arise out of commercial transactions of
governmental function.
the foreign sovereign, its commercial activities or economic
The execution of the said agreement is incidental to the
affairs. Stated differently, a State may be said to have
purpose of R.A. 5487, as amended, which is to regulate the
descended to the level of an individual and can thus be
organization and operation of private detective, watchmen or
deemed to have tacitly given its consent to be sued only when
security guard agencies.
it enters into a business contract. It does not apply where the
contract relates to the exercise of its functions.”
Merritt vs. Government of the Philippine Islands
G.R. No. 11154. March 21, 1916
Waiver of the State’s immunity from suit, being a derogation
of sovereignty, will not be lightly inferred, but must be
construed strictissimi juris (Republic v. Feliciano, 148 SCRA Facts:
424). ➔ E. Merritt, while riding his motorcycle, was hit by an
ambulance owned by the Philippine General Hospital. A
The consent of the State to be sued must emanate from driver employed by the hospital drove it.
statutory authority, hence, from a legislative act, not from a ➔ In order for Merritt to sue the Philippine government, Act
mere memorandum. Without such consent, the trial court did No. 2457 was enacted by the Philippine Legislature
not acquire jurisdiction over the public respondents. authorizing Merritt to bring suit against the Government
of the Philippine Islands and authorizing the Attorney-
Doctrine: A Public Official may be sued in his personal General of said Islands to appear in said suit.
capacity if he acts, among others beyond the scope of his ➔ A claim has been filed against the Government of the
authority. Philippine Islands by Mr. E. Merritt, of Manila, for
damages resulting from a collision between his
Notes: motorcycle and the ambulance of the General Hospital
● Waiver of the State’s immunity from suit, being a ➔ The trial court ruled that the collision between the
derogation of sovereignty, will not be lightly inferred, plaintiff's motorcycle and the ambulance of the General
but must be construed strictissimi juris. Hospital was due solely to the negligence of the
● Rationale of the Rules— The state immunity doctrine chauffeur.
rests upon reasons of public policy and the ➔ Both parties appealed from the decision, plaintiff Merritt
inconvenience and danger which would flow from a as to the amount of damages and defendant in
different rule. rendering the amount against the government.

Issue: ◆ That the responsibility of the state is limited by
➔ Whether or not the defendant, the Government of the article 1903 to the case wherein it acts through
Philippines, waived its immunity from suit? a special agent(and a special agent, in the
➔ Does it mean that the Government conceded its liability sense in which these words are employed, is
to the plaintiff when it enacted Act No. 2457 one who receives a definite and fixed order or
commission, foreign to the exercise of the
Held: duties of his office if he is a special official) so
➔ YES. As to the scope of legislative enactments permitting that in representation of the state and being
individuals to sue the state where the cause of action bound to act as an agent thereof, he executes
arises out of either fort or contract, the rule is stated in the trust confided to him. ◆ This
that: concept does not apply to any executive agent
 By consenting to be sued a state simply who is an employee of the acting
waives its immunity from suit. administration and who on his own
responsibility performs the functions which
 It does not thereby concede its liability to
are inherent in and naturally pertain to his
plaintiff, or create any cause of action in
office and which are regulated by law and the
his favor, or extend its liability to any
regulations."
cause not previously recognized. It
◆ The responsibility of the state is limited to that
merely gives a remedy to enforce a pre-
which it contracts through a special agent,
existing liability and submits itself to the
duly empowered by a definite order or
jurisdiction of the court, subject to its
commission to perform some act or charged
right to interpose any lawful defense.
with some definite purpose which gives rise to
 It simply gives authority to commence
the claim, and not where the claim is based on
suit for the purpose of settling plaintiff's
acts or omissions imputable to a public official
controversies with the state
charged with some administrative or technical
office who can be held to the proper
ACT NO. 2457 EXCEPTION: SPECIAL AGENT VS EXECUTIVE
responsibility in the manner laid down by the
AGENT of the government?
law of civil responsibility.
➔ Act No. 2457 does not operate to extend the It is, therefore, evidence that the State (the Government of the
Government's liability to any cause not previously Philippine Islands) is only liable for the acts of its agents,
recognized, the defendant's liability for the negligent officers and employees when they act as special agents within
acts of its officers, agents, and employees. Paragraph 5 the meaning of paragraph 5 of Article 1903 of the Spanish Law
of Article 1903 of the Civil Code reads (Spanish Civil and that the chauffeur of the ambulance of the General
Code): Hospital was not such an agent.
◆ The state is liable in this sense when it acts
through a special agent, but not when the
Doctrine:
damage should have been caused by the
official to whom properly it pertained to do ➔ When the State waives its immunity from suit does not
the act performed, in which case the concede its liability to any case of action, the
provisions of the preceding article shall be commencement of suit is only for the purposes of
applicable. settling plaintiff’s controversies with the state.
◆ The last paragraph of Article 1903, ➔ The responsibility of the state is limited to that which it
responsibility for acts of third persons ceases contracts through a special agent, duly empowered by a
when the persons mentioned in said article definite order or commission to perform some act or
prove that they employed all the diligence of charged with some definite purpose which gives rise to
a good father of a family to avoid the damage, the claim, and not where the claim is based on acts or
and among these persons, called upon to omissions imputable to a public official charged with
answer in a direct and not a subsidiary some administrative or technical office who can be held
manner, are found, in addition to the mother to the proper responsibility in the manner laid down by
or the father in a proper case, guardians and the law of civil responsibility.
owners or directors of an establishment or
enterprise, the state, but not always, except What is Act No. 2457?
when it acts through the agency of a special
agent, doubtless because and only in this case, ➔ Act No. 2457, effective February 3, 1915, reads:
the fault or negligence, which is the original ◆ An Act authorizing E. Merritt to bring suit
basis of this kind of objections, must be against the Government of the Philippine
presumed to lie with the state.
10

Islands and authorizing the Attorney-General complaint within 60 days, the claimant can go directly to the
of said Islands to appear in said suit. court.
◆ Whereas a claim has been filed against the
Government of the Philippine Islands by Mr. E. Does Act No. 3083 create a cause of action?
Merritt, of Manila, for damages resulting from YES. Any moneyed claim involving liability arising from
a collision between his motorcycle and the contract, expressed or implied, which could serve as a basis of
ambulance of the General Hospital on March civil action between private parties.
twenty-fifth, nineteen hundred and thirteen;
◆ Whereas it is not known who is responsible for What causes of action does Act No. 3083 cover where the
the accident nor is it possible to determine the State has expressly waived its immunity thru general law?
amount of damages, if any, to which the Any moneyed claim involving liability arising from contract,
claimant is entitled; and expressed or implied, which could serve as a basis of civil
◆ Whereas the Director of Public Works and the action between private parties.
Attorney-General recommended that an Act
be passed by the Legislature authorizing Mr. E. What is the exception to this Rule?
Merritt to bring suit in the courts against the Yes. When we have to determine whether the contract was
Government, in order that said questions may entered into in the exercise of Jure Imperii or Jure Gestioni.
be decided: Now, therefore, Jure Gestionis, suable but when Jure imperii, no immunity
◆ By authority of the United States, be it enacted applies. The cause of action is proprietary in character because
by the Philippine Legislature, that: of the clause “that can serve as civil liability between private
◆ SECTION 1. E. Merritt is hereby authorized to parties” so the effect of Act 3083 is that it only makes express
bring suit in the Court of First Instance of the what used to be implied. We remove Act 3083, the same
city of Manila against the Government of the principle applies, we put in Act 3083 it only makes express the
Philippine Islands in (1) order to fix the implied principle.
responsibility for the collision between his
motorcycle and the ambulance of the General What is the effect of Act No. 3083?
Hospital, and (2) to determine the amount of Act No. 3083 imposes a limitation on the causes of action of
the damages, if any, to which Mr. E. Merritt is party litigants which arises from contracts proprietary in
entitled on account of said collision, and (3) nature.
the Attorney-General of the Philippine Islands
is hereby authorized and directed to appear at When is there an implied waiver?
the trial on the behalf of the Government of YES
said Islands, to which the defendant said ➔ Commences litigation to seek affirmative relies
Government at the same. ➔ Enters into a contract in its proprietary capacity
What incident is involved? Does the State waive its immunity by entering into a contract?
There was a collision between Mr. E. Merritt’s motorcycle and No. Only as to contracts entered into which are proprietary in
the ambulance of the General Hospital nature. BASIS? :From the phrase “which could serve as a basis
of civil action between private parties.”
Can general law be used by any person?
Yes. Applicable to all persons who might qualify to file an ACT NO. 3083 - AN ACT DEFINING THE CONDITIONS UNDER
action against the government WHICH THE GOVERNMENT OF THE PHILIPPINE ISLANDS MAY
BE SUED
What are the 2 kinds of express waiver of immunity?
➔ Express waiver of immunity through a general law – ➔ Section 1. Complaint against Government. – Subject to
applicable to all persons who might qualify to file an the provisions of this Act, the Government of the
action against the government Philippine Islands hereby consents and submits to be
➔ Express waiver of immunity from a special law – only sued upon any moneyed claim involving liability arising
applicable to a specific person or group of persons from contract, expressed or implied, which could serve
specified in the law, just like in the case of Merritt vs. as a basis of civil action between private parties.
Government of the Philippine Islands (Act No. 2457) ➔ Sec. 2. A person desiring to avail himself of the privilege
herein conferred must show that he has presented his
Do we have a general law where the State expresses its claim to the Insular Auditor 1 and that the latter did not
consent to be sued? decide the same within two months from the date of its
YES. Act No. 3083. The State consents to being sued upon any presentation.
moneyed claim involving liability arising from contract, ➔ Sec. 3. Venue. – Original actions brought pursuant to the
express or implied, which could serve as a basis of civil action authority conferred in this Act shall be instituted in the
between private parties. If the COA does not act on the Court of First Instance of the City of Manila or of the
11

province were the claimant resides, at the option of the ♦ The action was premature as it was not filed
latter, upon which court exclusive original jurisdiction is first with the Office of the Auditor General.
hereby conferred to hear and determine such actions. ♦ That the right of action for recovery has
➔ Sec. 4. Actions instituted as aforesaid shall be governed already been prescribed.
by the same rules of procedure, both original and ♦ That it had no valid basis, being a suit against
appellate, as if the litigants were private parties. the Government, especially since the latter did
➔ Sec. 5. When the Government of the Philippine Island is not give consent.
plaintiff in an action instituted in any court of original ♦ That Amigable had no cause of action against
jurisdiction, the defendant shall have the right to assert the Government.
therein, by way of set-off or counterclaim in a similar ➔ During the hearings, nobody appeared for the
action between private parties. Government. However, the Court decided that they had
➔ Sec. 6. Process in actions brought against the no jurisdiction over the cause of action on the ground
Government of the Philippine Islands pursuant to the that the Government cannot be sued without its consent.
authority granted in this Act shall be served upon the ➔ Unable to secure a reconsideration, the plaintiff
Attorney-General 2 whose duty it shall be to appear and appealed to the Court of Appeals, and subsequently to
make defense, either himself or through delegates. the Supreme Court.
➔ Sec. 7. Execution. – No execution shall issue upon any
judgment rendered by any court against the Government Issue: W/N Amigable can sue the Government.
of the Philippine Islands under the provisions of this Act;
but a copy thereof duly certified by the clerk of the Court Held: Yes. According to the previous case of Ministerio vs. CFI,
in which judgment is rendered shall be transmitted by the Government takes away property from a private
such clerk to the Governor-General, 3 within five days landowner for public use without going through the legal
after the same becomes final. process of expropriation or negotiated sale, the aggrieved
party claimed that they may properly maintain a suit against
➔ Sec. 8. Transmittal of Decision. – The Governor-General, the government without thereby violating the doctrine of
4 at the commencement of each regular session of the governmental immunity. However, the Supreme Court stated
Legislature, 5 shall transmit to that body for appropriate that the doctrine of governmental immunity cannot serve as
action all decisions so received by him, and if said body an instrument for perpetrating injustice on a citizen.
determine that payment should be made, it shall
appropriate the sum which the Government has been Considering that no annotation in favor of the government
sentenced to pay, including the same in the appears at the back of her certificate of title and that she has
appropriations for the ensuing year. not executed any deed of conveyance of any portion of her
➔ Sec. 9. This Act shall take effect on its approval. lot to the government, the appellant remains the owner of the
whole lot. Here, Amigable, as the owner, could bring an action
Amigable vs. Cuenca to recover possession of the portion of the land in question
G.R. No. L-26400. February 29, 1972 anytime because possession is one of the attributes of
ownership.
Facts:
However, in this case, since restoration is neither convenient
➔ Without prior expropriation or negotiated sale, the
nor feasible, because it has been and is now being used for
Government used a portion of Amigable’s lot in Banilad
road purposes, the only relief available is for the government
Estate in Cebu for the construction of Mango and
to make due compensation which it could and should have
Gorodo Avenues.
done years ago.
➔ It appears that the said avenues were already existing in
1921 although they were in bad condition as they were
Doctrine: If there is no other relief possible but for the
very narrow, unlike the wide and beautiful avenues they
Government to make due compensation, the Doctrine of State
are now.
Immunity shall not ensue. In other words, the Government
➔ Amigable’s counsel, thus, requested payment for the
cannot hide behind the cloak of immunity if it acted against
portion appropriated to the President of the Philippines. the Constitution.
The claim was later indorsed to the Auditor General, who
disallowed it.
➔ Thus, Amigable filed 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 avenues.
➔ However, the Republic (and Cuenca) denied the
allegations of Amigable on the following grounds:
12

Republic vs. Sandiganbayan The suggestion that the State makes no implied waiver of
G.R. No. 90478. November 21, 1991 immunity by filing a suit except when in doing so it acts in, or
in matters concerning, its proprietary or non-governmental
Facts: capacity, is unacceptable. It attempts a distinction without
support in principle or precedent.
➔ The PCGG filed with the Sandiganbayan a complaint for
reconveyance, reversion, accounting, restitution, and
On the contrary, “the consent of the State to be sued may be
damages against private respondents Bienvenido
given expressly or impliedly.” Express consent may be
Tantoco and Dominador Santiago, et al.
manifested either through a general law or a special law.
➔ Private respondents jointly moved “to strike out some
Implied consent is given when the State itself commences
portions of the complaint and for Bill of Particulars of
litigation or when it enters into a contract.
other portions”, which motion was opposed by the
PCGG.
The immunity of the State from suits does not deprive it of the
➔ The Sandiganbayan gave the PCGG 45 days to expand its
right to sue private parties in its own courts. The state as
complaint to make more specific allegations. Private
plaintiff may avail itself of the different forms of actions open
respondents then presented a “Motion to leave to file
to private litigants.
interrogatories under Rule 25 of the Rules of Court”.
➔ The Sandiganbayan denied private respondents’ In short, by taking the initiative in an action against the private
motions. parties, the state surrenders its privileged position and comes
➔ Private respondents filed an Answer with Compulsory down to the level of the defendant.
Counterclaim.
➔ In response, the PCGG presented a “Reply to The latter automatically acquires, within certain limits, the
Counterclaim with Motion to Dismiss compulsory right to set up whatever claims and other defenses he might
counterclaim.” have against the state.
➔ Private respondents filed a pleading denominated
“Interrogatories to Plaintiff”, and “Amended It can hardly be doubted that in exercising the right of
Interrogatories to Plaintiff” as well as a motion for eminent domain, the State exercises its jus imperii, as
production and inspection of documents. distinguished from its proprietary rights or jus gestionis. Yet,
➔ The Sandiganbayan admitted the Amended even in that area, it has been held that where private property
Interrogatories and granted the motion for production has been taken in expropriation without just compensation
and inspection of documents respectively. The PCGG being paid, the defense of immunity from suit cannot be set
moved for reconsideration, arguing that the documents up by the State against an action for payment by the owner.
are privileged in character since they are intended to be
used against the PCGG and/or its Commission in Doctrine: Suability vs. Liability
violation of Sec.4 of EO No.1, V12: Suability Liability
➔ a) No civil action shall lie against the Commission or any Depends on the consent of Liability is not connected
the State to be sued, liability by the mere fact that the
member thereof for anything done or omitted in the
on the applicable law and State has allowed itself to
discharge of the task contemplated by this order. the established facts. be sued.
➔ b) No member or staff by the Commission shall be The circumstance that a When the State does not
required to testify or produce evidence in any judicial, State is suable does not waive its sovereign
legislative or administrative proceedings concerning necessarily mean that it is immunity, it is only giving
liable. It cannot be held the plaintiff the chance to
➔ The Sandiganbayan promulgated two Resolutions. The
liable if it does not first prove, if it can, that the
first, denying reconsideration of the Resolution allowing consent to be sued. defendant is liable.
production of the documents, and the second,
reiterating, by implication the permission to serve the In the commencement of litigation, should there also be a
amended interrogatories on the plaintiff. qualification as to governmental or proprietal function?
No. When the state sues the private person in court, the court
Issue: W/N the PCGG immune from suit? is open to counter actions. In filing action for reversion (by the
PCGG), cannot now invoke state immunity when the
Held: No. The state is of course immune from suit in the sense defendants filed a motion for modes for discovery. That would
that it cannot, as a rule, be sued without its consent. be unfair, because while the state can require the defendants
to disclose all evidence and facts known to them, the state can
But in filing an action, it divests itself of its sovereign character hide from its cloak of immunity from not disclosing certain
and sheds its immunity from suit, descending to the level of matters which are material to the controversy. (Subsequently,
an ordinary litigant. EO No. 1 was declared unconstitutional because it insulates
the officers of the PCGG from the power of the Congress to
The PCGG cannot claim a superior or preferred status to the conduct inquiries in aid of legislation. It makes the
State, even while assuming an act for the State. Commissioners of the PCGG a preferred class.)
13

Does that mean that in all instances when the state Supposing the government filed a complaint against the
commences a litigation, it opens itself to counter-claims? supplier who is selling firearms to the government, the
No. An exception would be when the state appears specifically government filed an action against the supplier because the
to invoke the defense of nonsuability. In that regard, there is items it delivered to the government were faulty. So, the
no implied waiver of immunity. government is claiming damages against the supplier
amounting to 5 Million. The defendant setup his defense that
Can the defendant in a case instituted by the state raise all the government is liable to the supplier for the firearms
counter claims? already delivered amounting to 10 million. The supplier said
No. Only compulsory counter-claims. Permissive counter- that by offsetting, the government still owes him 5 Million. Is
claims cannot be covered by the state immunity. the counterclaim valid?
➔ No. The claim is for another item thus in essence that is
Supposing the state is suing for Project No. 1, and the a permissive counterclaim. Only compulsory
defendant filed a counter-claim for Project No. 2, is the counterclaims can be set up by defendants sued by the
counter-claim allowed? state. permissive counterclaims are considered as
No. The counter-claim must only pertain to the subject matter separate actions, being separate actions, it is not where
of the suit instituted by the state. the state has impliedly waive its immunity. It requires
another waiver of immunity.
Did the SC agree that officers of PCGG in the case of Republic ➔ Note: Implied waiver of immunity can only apply to the
vs Sandiganbayan, cannot be compelled to divulge cause of action initiated by the government. if the cause
information through modes of discovery because they enjoy of action is the firearms, any counterclaim setup by the
state immunity? defendant will only be upto that cause of action. Other
➔ No. although the charter of PCGG insulates them from cause of action will be covered by State immunity.
legal actions, PCGG is the one who initiated the action
thus, it is deemed to have impliedly waived its immunity Whenever the state gives its consent to be sued, is it an
therefore the defendants may resort to modes of automatic admission of liability?
discovery in order to raise their defenses. No. The state only gives the plaintiff the right to prove his
➔ PCGG said that under the doctrine of restrictive theory cause of action
the state is deemed to have impliedly waived its
immunity when the state enters into a commercial What’s the difference between suability and liability?
transaction, can the PCGG apply the same principle in the Yes. Suability depends on the consent of the State to be sued,
initiation of complaint? That if it applies to contracts, that liability on the applicable law and the established facts. The
also applies to initiation of litigation and as such implied circumstance that a State is suable does not necessarily mean
waiver of immunity shall only result when a state that it is liable, on the other hand, it can never be held liable
commences a litigation in the pursuit of its commercial if it does not
transaction and not when it initiates a governmental
function. Did the SC agree? Which means that the question of suability can be determined
➔ No. when the state commences a litigation, it is deemed by consent? Express of implied?
to have impliedly waived its immunity without Yes.
qualification. So whether it is initiated in its
governmental or proprietary functions, implied waiver While the question of liability?
results. This is in compliance with the principle of justice ➔ Depends on the established evidence
and fairness because if we will apply the doctrine the ➔ So, even if the state consents to be sued, the state can
restrictive theory only in actions filed in commercial still deny liability. It is still incumbent upon the plaintiff
capacity of the state, there will be an instance when the that liability lies on the state whenever the state gives its
government will file an action against individual but the consent to be sued.
individual cannot answer because that will be considered
as a suit against the state. China National Machinery vs. Santamaria
➔ In raising defenses (by the private party), it may also G.R. No. 185572. February 7, 2012
setup counterclaims. These counterclaims are not
covered by state immunity because they should be Facts:
allowed to setup their defenses up to the extent that they
➔ On September 14, 2002 - China National Machinery &
will raise counterclaims against the government.
Equipment Corp. (CNMEG) entered into a Memorandum
of Undertaking with North Luzon Railways Corporation
So, the defendant can raise counterclaims against the state.
(Northrail) to conduct a feasibility study on a possible
All kinds of counterclaims?
railway line from Manila to San Fernando, La Union.
No. Only compulsory counter-claims. Permissive counter-
➔ On August 30, 2003 - the Export Bank of China (EXIM
claims cannot be covered by the state immunity.
Bank) and Department of Finance (DOF) entered into a
14

MOU wherein China agreed to extend Preferential in the performance of the latter's sovereign functions. To
Buyer’s Credit to PH. The Chinese government agreed to imply otherwise would result in an absurd situation, in which
extend an amount not exceeding USD 400M payable in all Chinese corporations owned by the state would be
20 years, a 5year grace period and at a rate of 3% per automatically considered as performing governmental
annum. activities, even if they are clearly engaged in commercial or
➔ On October 01, 2003 - the Chinese Ambassador to PH, proprietary pursuit
Wang Chungui wrote a letter to the DOF secretary
informing him of CNMEG’S designation as the Prime (2.) No. CNMEG is neither a government nor a government
Contractor. agency. It is engaged in a proprietary activity. The
➔ On December 30, 2003 - CNMEG and Northrail executed Contract Agreement was not concluded between the
a Contract Agreement for the Construction of the Philippines and China, but between Northrail and
project. CNMEG. Thus, both Northrail and CNMEG entered into
➔ On February 26, 2004- the PH government and EXIM the Contract Agreement as entities with personalities
bank executed a Counterpart financial agreement - distinct and separate from the Philippine and Chinese
buyer credit loan agreement (“the loan agreement”). governments, respectively. Hence, the contract is merely
an ordinary commercial contract that can be questioned
➔ On February 13, 2006 - respondents filed a Complaint for
before the local courts.
Annulment of Contract and Injunction with Urgent
Motion for Summary Hearing. Respondents alleged that
The Contract Agreement must not be read in isolation.
the Contract and loan agreement is VOID for being
Instead, it must be construed in conjunction with three other
contrary to : (1) the constitution; (2) RA 9184 -
documents executed in relation to the Northrail Project,
Government Procurement Reform Act; (3) PD No. 1445 -
namely: (a) the Memorandum of Understanding dated 14
Government Auditing Code and (4) EO No. 292 -
September 2002 between Northrail and CNMEG; 30 (b) the
Administrative Code.
letter of Amb. Wang dated 1 October 2003 addressed to Sec.
➔ CNMEG filed a Motion to Dismiss and argued that the
Camacho; 31 and (c) the Loan Agreement.
trial court has no jurisdiction over its person as it is an
agent of the Chinese Government, making it immune
(a) The MOU dated 14 September 2002 - shows that CNMEG
from suit and the subject matter is a product of an
sought the construction of Luzon Railways as a
executive agreement.
proprietary venture. It was CNMEG that initiated the
➔ RTC denied CNMEG’s motion. Subsequently, CNMEG undertaking, and not the Chinese government. The
filed a Motion for Reconsideration but it was denied. Feasibility Study was conducted not because of any
➔ CNMEG filed a Petition for Certiorari with Prayer for diplomatic gratuity from or exercise of sovereign
Issuance of TRO with the CA, but it was dismissed. Hence, functions by the Chinese government, but was plainly a
it filed a motion for reconsideration which was denied. business strategy employed by CNMEG with a view to
➔ Hence this Petition for Review securing this commercial enterprise.
(b) Letter dated 01 October 2003 - shows that CNMEG, and
Issues: not the Chinese government, initiated the Northrail
(1.) Whether CNMEG is entitled to immunity, precluding it Project was confirmed by Amb. Wang in his letter. The
from being sued before a local court. desire of CNMEG to secure the Northrail Project was in
(2.) Whether the Contract Agreement is an executive the ordinary or regular course of its business as a global
agreement, such that it cannot be questioned by or construction company. The implementation of the
before a local court Northrail Project was intended to generate profit for
CNMEG.
Held: (c) Loan Agreement - it was clear from the provisions that it
(1.) No. Although CNMEG claims to be a government-owned was a purely commercial transaction and there was also
corporation, it failed to adduce evidence that it has not an express waiver of immunity. Admittedly, the Loan
consented to be sued under Chinese law. Thus, following Agreement was entered into between EXIM Bank and the
this Court's ruling in Deutsche Gesellschaft, in the Philippine government, while the Contract Agreement
absence of evidence to the contrary, CNMEG is to be was between Northrail and CNMEG. Although the
presumed to be a government-owned and -controlled Contract Agreement is silent on the classification of the
corporation without an original charter. As a result, it has legal nature of the transaction, the foregoing provisions
the capacity to sue and be sued under Section 36 of the of the Loan Agreement, which is an inextricable part of
Corporation Code. the entire undertaking, nonetheless reveal the intention
of the parties to the Northrail Project to classify the
The use of the term "state corporation" to refer to CNMEG was whole venture as commercial or proprietary in character.
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
15

Doctrine: The application of the doctrine of immunity from ➔ The Land Authority asserted that Feliciano lacked
suit has been restricted to sovereign or governmental sufficient cause of action and that his action has already
activities (jure imperii). The mantle of state immunity cannot prescribed.
be extended to commercial, private and proprietary acts (jure ➔ However, the trial court rendered a decision stating that
gestionis) The Philippines adheres to the restrictive theory. Feliciano is the rightful and true owner of the property in
question, and thus, excluded from the NARRA
Is an arbitration clause in a contract an implied waiver? settlement.
Yes. In the United States, the Foreign Sovereign Immunities ➔ Later, 86 settlers filed a motion to intervene alleging that
Act of 1976 provides for a waiver by implication of state they have been in possession of their lands for 20 years.
immunity. In the said law, the agreement to submit disputes ➔ The Court a quo reopened the case and directed the
to arbitration in a foreign country is construed as an implicit intervenors to show evidence. However, later on, the
waiver of immunity from suit. There is no similar law in the intervenors did not appear. They simply just submitted a
Philippines. motion for postponement resetting of hearing, which
was later denied by the trial court.
In the case at bar, the Contract Agreement provides that, if ➔ After numerous attempts for reconsideration despite
any dispute arises between Northrail and CNMEG. Both being continuously denied by the trial court, the
parties are bound to submit the matter to the HKIAC for intervenors decided to elevate their matter to the IAC on
arbitration. In case the HKIAC makes an arbitral award in favor a petition for certiorari, but it was also denied.
of Northrail, its enforcement in the Philippines would be
➔ Thus, they filed a motion to dismiss on the ground that
subject to the Special Rules on Alternative Dispute Resolution
the Republic of the Philippines cannot be sued without
(Special Rules). Rule 13 thereof provides for the Recognition
its consent; thus, the action cannot prosper. This motion
and Enforcement of a Foreign Arbitral Award. Hence, it is clear
was opposed by Feliciano.
that CNMEG has agreed that it will not be afforded immunity
from suit. Thus, the courts have the competence and
Issue: W/N Feliciano may sue the Republic.
jurisdiction to ascertain the validity of the Contract
Agreement.
Held: No. Feliciano has impleaded the Republic of the
Philippines as defendant in an action for recovery of
Does China National Machinery have immunity from suit?
ownership and possession of a parcel of land, bringing the
No. The CNMEG is not immune from suit. The desire of
State to Court just like any private person who is claimed to
CNMEG to secure the Northrail Project was in the ordinary or
be usurping a piece of property.
regular course of its business as a global construction
company. Its assignment as the Primary Contractor for the
A suit for recovery of property is not an action in rem, but an
Northrail project did not imply that it was acting on behalf of
action in personam. It is an action directed against a specific
China in the performance of the latter's sovereign functions.
party or parties, and judgment therein binds only such party
or parties.
Republic vs. Feliciano
G.R. No. 70853. March 12, 1987 Under settled jurisprudence, suit against the State is not
permitted except upon showing that the State has consented
Facts: to which, in this case, Feliciano failed to allege.
➔ November 1, 1954 – President Ramon Magsaysay issued
Proclamation No. 90, reserving for settlement purposes, The failure of Feliciano to assert the defense of immunity from
under the administration of the National Resettlement suit when the case was tried before the court a quo, as alleged
and Rehabilitation Administration (NARRA) a tract of by the private respondent, is not fatal. It is now settled that
land situated in the Municipalities of Tinambac and such defense may be invoked by the courts sua sponte at any
Siruma Camarines Sur, after which the NARRA and its stage of the proceedings.
successor agency, the Land Authority, started
subdividing and distributing the land to the settlers. Feliciano further asserted that the implied consent of suability
➔ Herein respondent, then petitioner, Pablo Feliciano, may be read from the proclamation itself when it established
alleged that he had bought the property in question, the reservation “subject to private rights, if any there be.”
evidenced by an informacion possessoria, and upon However, that is not it. No consent can be drawn from the
purchase he took possession of the property and language of the Proclamation. The exclusion of existing
introduced various improvements therein. private rights from the reservation established cannot be
➔ Thus, Feliciano prayed that he be declared the rightful construed as an implied waiver of immunity.
and true owner of the property despite it being located
within the reservation established under Proclamation A proclamation is not a legislative act. The consent of the
No. 90. State must stem from statutory authority. Waiver of State
Immunity can only be made by an act of the legislative body.
16

INFORMACION POSESORIA How should the waiver to be sued be construed?
The inscription in the property registry of an informacion it much CONSTRUED STRICTISSIMI JURIS. Waiver of the
posesoria under the Spanish Mortgage Law was a means State's immunity from suit, being a derogation of sovereignty,
provided by the law then in force in the Philippines prior to will not be lightly inferred
the transfer of sovereignty from Spain to the US, to record a
claimant’s actual possession of a piece of land. Such What is the meaning of “unequivocal”?
inscription merely furnishes prima facie evidence of the fact clear, having one meaning or interpretation
that at the time the proceeding was held, the claimant was in
possession of the land under a claim of right. The possessory What is “sua sponte” law?
information could ripen into a record of ownership after the Latin for "of one's own accord; voluntarily." Used to indicate
lapse of 20 years (later reduced to 10), upon the fulfillment of that a court has taken notice of an issue on its own motion
the requisites prescribed in the Spanish Mortgage Law. without prompting or suggestion from either party. As a
general rule, where grounds for dismissal exist, an action is
In the case at bar, there was no showing that the informacion subject to dismissal on a court's own motion. A trial court has
posesoria had been converted into a record of ownership. the power to dismiss an action sua sponte for want of
Such possessory information remained, at best, a mere prima prosecution, or failure to comply with the rules of civil
facie evidence of possession. Using this, Feliciano could have procedure or a court's orders. A court may sua sponte enter
applied for judicial confirmation of imperfect title under the a motion to dismiss for want of jurisdiction even though both
Public Land Act, which is an action in rem. However, it was parties have agreed to appear in the court.
already late for him to do so.
Can the Court recognize the Doctrine of State Immunity sua
Doctrine: Failure to allege the existence of the consent of the sponte?
State in a suit against it is a fatal defect. On this basis alone, Yes. Where no consent is shown, state immunity from suit may
the complaint may be dismissed. be invoked as a defense by the courts sua sponte at any stage
of the proceedings, because waiver of immunity, being in
Express vs. Implied consent derogation of sovereignty, will not be inferred lightly and
Express Consent Implied Consent must be construed in strictissimi juris.
It can be given only by an When the State
Can the immunity be invoked at any stage of the proceeding?
act of the legislative body, commences litigation
Yes. because waiver of immunity, being in derogation of
in a general or special When the State enters into
sovereignty, will not be inferred lightly and must be construed
law. Consent of the State a business contract
in strictissimi juris.
to be sued must be
embodied in a duly
When it would be What is “consent”?
enacted statute and may
inequitable for the State to An act of permitting something to be done or of recognizing
not be given by a mere
claim immunity some authority.
counsel of the
government.
After rendition of judgment, does the court cease to have
jurisdiction?
When it would be inequitable for the State to claim
Yes. In the case of Commissioner of Public Highways v. San
immunity.
Diego, the universal rule that where the State gives its consent
Inequitable situation that will result in a boxing match!
to be sued by private parties either by general or special law,
Government can punch, but cannot be punched back.
it may limit claimant's action `only up to the completion of
proceedings anterior to the stage of execution' and that the
Is a proclamation a waiver?
power of the Courts ends when the judgment is rendered,
No. A proclamation is not a legislative act. The consent of the
since government funds and properties may not be seized
State must stem from statutory authority. Waiver of State
under writs of execution or garnishment to satisfy such
Immunity can only be made by an act of the legislative body.
judgments, is based on obvious considerations of public
policy.
Assuming the proclamation is in effect a law, is this, then, a
waiver?
Is there a requirement or consent to satisfy or fulfill liability or
Assuming it is in effect a law, it would be a waiver. As the law
decision?
provided that the consent of the State must stem from
Yes. Execution will require another waiver, because the power
statutory authority.
of the court ends when the judgment is rendered, since
government funds and properties may not be seized under
Did the SC consider it as a suit against the State?
writs of execution or garnishment, unless such, disbursement
No. Since Feliciano failed to allege the existence of the
is covered by the corresponding appropriation as required by
consent of the Land Authority in the case at bar.
law
17

Is it mandatory to appropriate funds after judgment? affairs. A State may be said to have descended to the level of
Yes. Disbursements of public funds must be covered by the an individual and can thus be deemed to have tacitly given its
corresponding appropriation as required by law. The consent to be sued only when it enters into business
functions and public services rendered by the State cannot be contracts. It does not apply where the contract relates to the
allowed to be paralyzed or disrupted by the diversion of exercise of its sovereign functions. In this case the projects are
public funds from their legitimate and specific objects, as an integral part of the naval base which is devoted to the
appropriated by law. defense of both the United States and the Philippines,
indisputably a function of the government of the highest
U.S. vs. Ruiz order; they are not utilized for nor dedicated to commercial
G.R. No. L-35646. May 22, 1985 or business purposes.
Facts: The correct test for the application of State immunity is not
➔ The United States of America had a naval base in Subic, the conclusion of a contract by a State but the legal nature of
Zambales. The base was one of those provided in the the act.
Military Bases Agreement.
➔ In May 1972, the US invited submission of bids for the Doctrine: The restrictive application of State immunity is
following projects: (a) Repair Fender System; (b) Repair proper only when the proceedings arise out of commercial
Typhoon damage transactions of the foreign sovereign, its commercial activities
➔ Eligio de Guzman & Co. (EDGC) responded to the or economic affairs.
invitation and submitted bids.
➔ Thereafter, the company received from the United States Is there a waiver?
two telegrams requesting it to confirm its price None. a State may be said to have descended to the level of
proposals and for the name of its bonding company. The an individual and can thus be deemed to have tacitly given its
company complied with the requests consent to be sued only when it enters into business contracts
➔ In June 1972, the company received a letter which was
signed by William I. Collins, Director, Contracts Division. Dissenting opinion (Makasiar, J.):
The letter said that the company did not qualify to Justice and fairness dictate that a foreign government
receive an award for the projects because of its previous that commits a breach of its contractual obligation — in
unsatisfactory performance rating on a repair contract the case at bar by the unilateral cancellation of the award
for the sea wall at the boat landings of the U.S. Naval for the project by the United States government, through
Station in Subic Bay. The letter further said that the its agency at Subic Bay — should not be allowed to take
projects had been awarded to third parties. undue advantage of a party who may have legitimate
➔ Subsequently, EDGC sued the US and Messrs. James claims against it by seeking refuge behind the shield of
Galloway, William Colins and all members of the non-suability. A contrary view would render a Filipino
engineering command to allow them to perform the citizen, as in the instant case, helpless and without redress
work on the projects and, in the event that specific in his own country for violation of his rights committed
performance was no longer possible, to order the by the agents of the foreign government professing to
defendants to pay damages. act in its name. Under the doctrine of implied waiver of
➔ Defendants filed a motion to dismiss questioning the its non-suability, the United States government, through
jurisdiction of the court over the subject matter and the its naval authorities at Subic Bay, should be held
persons of the defendants and that the subject matter of amenable to lawsuits in our country like any other juristic
the complaint are acts and omissions of the individual person.
defendants as AGENTS of USA, a foreign sovereign which
has not given her consent to this suit.
What is the nature of the transaction?
➔ The trial court denied the motion.
➔ The defendants moved twice to reconsider but to no
Holy See vs.
avail. Hence the instant petition. U.S. vs. Ruiz U.S. vs. Guinto
Rosario, Jr.
JURE IMPERII JURE GESTIONIS
Issue: Whether USA may be sued? JURE IMPERII
The projects are The bidding for
The acquisition
an integral part the operation of
Held: No. The traditional rule of State immunity exempts a of the property is
of the naval base barbershops
State from being sued in the courts of another State without for the site of its
which is devoted subject to the
its consent or waiver. State immunity now extends only to mission or the
to the defense of concessions
acts jure imperii - sovereign and governmental acts. The Apostolic
both the United granted by the
restrictive application of State immunity is proper only when Nunciature in
States and the United States
the proceedings arise out of commercial transactions of the the Philippines
Philippines, government are
foreign sovereign, its commercial activities or economic
18

indisputably a commercial receipt of the letter to pay the original purchase price in
function of the enterprises cash.
government of operated by ➔ However, on March 30, 1989, without notice to SSEI, the
the highest private persons. petitioner sold the lots to Tropicana Properties and
order; they are Development Corporation (Tropicana).
NOT utilized for ➔ SSEI demanded rescission of the sale to Tropicana and
nor dedicated to the reconveyance of the lots but to no avail.
commercial or ➔ Petitioner moved for the dismissal of the complaint for
business lack of jurisdiction based on sovereign immunity from
purposes. suit and Msgr. Cirilos for being an improper party.
➔ The trial court denied the motion to dismiss after finding
The Holy See vs. Rosario, Jr. that the petitioner “shed off” its immunity by entering
G.R. No. 101949. December 1, 1994 into the business contract in question.
➔ A motion for reconsideration was also denied. Hence,
this special civil action.
BRIEF HISTORY:
→ In 1929, Italy and the Holy See entered into the ➔ On December 19, 1991- Motion for Intervention was filed
Lateran Treaty, where Italy recognized the exclusive by the DFA, claiming its legal interest in the outcome of
dominion and sovereign jurisdiction of the Holy See the case as regards the diplomatic immunity of the Holy
over the Vatican City. See that it "adopts by reference, the allegations
→ It also recognized the right of the Holy See to contained in the petition of the Holy See insofar as they
receive foreign diplomats, to send its own diplomats refer to arguments relative to its claim of sovereign
immunity from suit"
to foreign countries, and to enter into treaties
according to International Law.
Issue: Did the Holy See properly invoke sovereign immunity
→ The Lateran Treaty established the statehood of the
for its non-suability?
Vatican City "for the purpose of assuring to the Holy
See absolute and visible independence and of
Held: Yes. The mere entering into a contract by a foreign state
guaranteeing to it indisputable sovereignty also in
with a private party cannot be the ultimate test. Such an act
the field of international relations".
can only be the start of the inquiry. The logical question is
whether the foreign state is engaged in the activity in the
Facts: regular course of business. If the foreign state is not engaged
➔ Petitioner is the Holy See who exercises sovereignty over regularly in a business or trade, the particular act or
the Vatican City in Rome, Italy, and is represented in the transaction must then be tested by its nature. If the act is in
Philippines by the Papal Nuncio. pursuit of a sovereign activity, or an incident thereof, then it
➔ Private respondent, Starbright Sales Enterprises, Inc., is a is an act jure imperii, especially when it is not undertaken for
domestic corporation engaged in the real estate gain or profit.
business.
➔ This petition arose from a controversy over a parcel of The United States passed the Foreign Sovereign Immunities
land consisting of 6,000 square meters located in the Act of 1976, which defines a commercial activity as "either a
Municipality of Parañaque, Metro Manila and registered regular course of commercial conduct or a particular
in the name of petitioner. commercial transaction or act." Furthermore, the law declared
that the "commercial character of the activity shall be
➔ The said lot is contiguous to lots 5-B and 5-D registered
determined by reference to the nature of the course of
in the name of Philippine Realty Corporation (PRC).
conduct or particular transaction or act, rather than by
These three lots were sold through an agent Msgr.
reference to its purpose." The Canadian Parliament enacted in
Domingo Cirilos Jr. to Ramon Licup. Licup assigned his
1982 an Act to Provide For State Immunity In Canadian Courts.
rights to private respondent Starbright Sales Ent. Inc.
The Act defines a "commercial activity" as any particular
(SSEI).
transaction, act or conduct or any regular course of conduct
➔ A dispute arose due to the refusal of the squatters to
that by reason of its nature, is of a "commercial character."
vacate the lots.
➔ SSEI insisted that it should be petitioner who should In the case at bench, if the petitioner has bought and sold
clear the property but petitioner refused and proposed lands in the ordinary course of a real estate business, surely
that either SSEI undertake the eviction of that the earnest the said transaction can be categorized as an act jure
money amounting to Php 100,000 will just be returned gestionis. However, petitioner has denied that the acquisition
to the former. and subsequent disposal of Lot 5-A were made for profit but
➔ Msgr. Cirilos returned the earnest money of P100,000.00 claimed that it acquired said property for the site of its mission
and wrote private respondent giving it seven days from or the Apostolic Nunciature in the Philippines.
19

The Court has considered The Court has considered Is there any counterclaim?
the following transactions the following transactions Yes. When the government files a complaint, it is opening
by a foreign state with by a foreign state with itself to a counterclaim. Only compulsory counterclaims.
private parties as acts jure private parties as acts jure
imperii gestionis
Why is it not permissive?
The lease by a foreign The hiring of a cook in the
government of apartment recreation center, Permissive Counterclaims are considered separate actions;
buildings for use of its consisting of three hence it is not where the state has impliedly waive its
military officers restaurants, a cafeteria, a immunity. It thus requires ANOTHER waiver.
The conduct of public bakery, a store, and a coffee
bidding for the repair of a and pastry shop at the John
wharf at a United States Hay Air Station in Baguio Procedure when a state or international agency wishes to
Naval Station City, to cater to American plead sovereign or diplomatic immunity in a foreign
servicemen and the general court:
public 1. Public International law - requests the Foreign Office
The Change of employment The bidding for the of the state where it is sued to convey to the court
status of base employees. operation of barber shops
in Clark Air Base in Angeles that said defendant is entitled to immunity
City 2. USA - process of “suggestion” --> where the foreign
state or the international organization sued in an
Doctrine: There are two conflicting concepts of sovereign American court requests the Secretary of State to
immunity, each widely held and firmly established. According make a determination as to whether it is entitled to
to the classical or absolute theory, a sovereign cannot, without immunity.
its consent, be made a respondent in the courts of another 3. Philippines - the foreign government or the
sovereign. According to the newer or restrictive theory, the international organization to first secure an
immunity of the sovereign is recognized only with regard to executive endorsement of its claim of sovereign or
public acts or acts jure imperii of a state, but not with regard diplomatic immunity.
to private acts or acts jure gestionis.
How does it convey its endorsement to the court?
1. In International Catholic Migration Commission v.
Calleja, 190 SCRA 130 (1990), the Secretary of
Jure Gestionis Jure Imperii
Foreign Affairs just sent a letter directly to the
Private acts of the State – Public acts of the State –
Commercial and Sovereign and Secretary of Labor and Employment, informing the
proprietary governmental latter that the respondent-employer could not be
sued because it enjoyed diplomatic immunity.
Is it conclusive that since the nature of the contract is 2. In World Health Organization v. Aquino, 48 SCRA
commercial, the act itself is jure gestionis? 242 (1972), the Secretary of Foreign Affairs sent the
No. The mere entering into a contract by a foreign state with trial court a telegram to that effect.
a private party CANNOT be the determining factor whether it 3. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy
is engaged in business or not. asked the Secretary of Foreign Affairs to request the
Solicitor General to make, in behalf of the
How do we determine if the contract is commercial or Commander of the United States Naval Base at
proprietary? Olongapo City, Zambales, a "suggestion" to
➔ Regularity of the transaction respondent Judge. The Solicitor General embodied
➔ Objective or the purpose of transaction the "suggestion" in a Manifestation and
Memorandum as amicus curiae.
Considerations:
Note: In cases where the foreign states bypass the
➔ Nature of contract
Foreign Office, the courts can inquire into the facts and
➔ Pursuit of regular business or purpose
make their own determination as to the nature of the acts
➔ Conflicting theories of State Immunity?
and transactions involved.
➔ Absolute or Classical theory of State Immunity
➔ Restrictive theory of State Immunity
How does the State commence action?

As for the filing of a complaint by the government, suability
will result only where the government is claiming affirmative
relief from the defendant.
20

Republic vs. Villasor Department of Agriculture vs. NLRC
G.R. No. L-30671. November 28, 1973 G.R. No. 104269. November 11, 1993
Facts: Facts:
➔ On July 3, 1961 - Judge Villasor rendered a Decision in ➔ The Department of Agriculture and Sultan Security
favor of P.J. Kiener Co., Ltd., Gavino Unchuan and Agency entered into a contract for security services.
International Construction Corporation against the ➔ Save for the increase in the monthly rate of the guards,
Republic confirming the arbitration award in the amount the same terms and conditions were also made to apply
of Php 1, 712,396.40. to another contract. Pursuant to their arrangements, the
➔ On June 24, 1969 - Respondent Judge issued an Order guards were deployed by Sultan Agency in the various
declaring the aforestated Decision as final and executory, premises of DAR.
thus directing the sheriff to execute the said Decision. ➔ Later, several guards filed a complaint for underpayment,
➔ On June 26, 2969 - the Sheriff served notices of non-payment of 13th month pay, uniform allowances,
garnishment with the banks- Philippine Veterans Bank night shift differential pay, holiday pay, overtime pay,
and Philippine National Bank. and damages.
➔ The funds in the said banks, as certified by the AFP ➔ The Executive Labor Arbiter rendered a decision finding
Comptroller, are funds of the AFP with the said banks are DAR liable with Sultan Security Agency. Thus, the LA
public funds for the pensions, pay, and allowances of its issued a writ of execution commanding the City Sheriff
military and civilian personnel. to enforce and execute the judgment against the
➔ On July 7, 1969- the Republic filed a petition for certiorari property of the two respondents. For DAR: (1) one Toyota
and prohibition challenging the validity of an order Hi-Ace; (2) one Toyota Mini Cruiser; and (3) one Toyota
issued by respondent Judge Guillermo Villasor. Crown.
➔ A petition for injunction, prohibition, and mandamus,
Issue: May the funds of the government be subject to with a prayer for preliminary writ of injunction was filed
garnishment? by DAR with NLRC.
➔ DAR pointed out that the LA did not have jurisdiction
Held: No. Although the State may give its consent to be sued over them, thus rendering the LA’s decision null and
by private parties, there is corollary that public funds cannot void. Further, DAR alleged that the attachment or seizure
be the object of garnishment proceedings even if the consent of its property would hamper and jeopardize their
to be sued has been previously granted and the state’s liability governmental functions to the prejudice of public good.
has been adjudged.
Thus in the recent case of Commissioner of Public Highways Issue: W/N DAR may be sued and its properties be awarded
v. San Diego, such a well-settled doctrine was restated in the to the private respondents.
opinion of Justice Teehankee: "The universal rule that where
the State gives its consent to be sued by private parties either Held: Yes. The States’ consent may be given either expressly
by general or special law, it may limit claimant's action `only or impliedly. Express consent may be made through a general
up to the completion of proceedings anterior to the stage of law or a special law. In this jurisdiction, the general law
execution' and that the power of the Courts ends when the waiving the immunity of the state from suit is found in Act No.
judgment is rendered, since government funds and properties 3083, where the Philippine government "consents and
may not be seized under writs of execution or garnishment to submits to be sued upon any money claim involving liability
satisfy such judgments, is based on obvious considerations of arising from contract, express or implied, which could serve as
public policy. Disbursements of public funds must be covered a basis of civil action between private parties." Implied
by the corresponding appropriation as required by law. The consent, on the other hand, is conceded when the State itself
functions and public services rendered by the State cannot be commences litigation, thus opening itself to a counterclaim or
allowed to be paralyzed or disrupted by the diversion of when it enters into a contract.
public funds from their legitimate and specific objects, as
appropriated by law. In this situation, the government is deemed to have
descended to the level of the other contracting party and to
Doctrine: FUNDS OF THE GOVERNMENT ARE NOT SUBJECT have divested itself of its sovereign immunity. Not all
TO GARNISHMENT. Disbursements of public funds must be contracts entered into by the government operate as a waiver
covered by the corresponding appropriation as required by of its non-suability; distinction must still be made between
law. one which is executed in the exercise of its sovereign
functions 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
21

governmental entity when it entered into the questioned immediate result, several towns in Bulacan were
contract; nor that it could have, in fact, performed any act inundated. Thus, hundreds of its residents died or were
proprietary in character. When the State gives its consent to reported to have died. This flood was unprecedented in
be sued, it does not thereby necessarily consent to an Norzagaray.
unrestrained execution against it. Thus, when the State waives ➔ Thus, as victims, the petitioners filed a complaint against
its immunity, all it does, in effect, is to give the other party an NPC.
opportunity to prove, if it can, that the State has liability. ➔ NPC answered and invoked that in the operation of the
Angat Dam, it is performing purely governmental
Doctrine: When the State gives its consent to be sued, it does function, hence it cannot be sued without the express
not thereby necessarily consent to an unrestrained execution consent of the state.
against it.
Issue: W/N the power of NPC to sue and be sued includes the
PNB vs. Pabalan power to be sued for tort.
G.R. No. L-33112. June 15, 1978
Held: Yes. In organizing the National Power Corporation, the
Facts: government has organized a private corporation, put money
in it, and has allowed it to sue and to be sued in any court
➔ Judge Pabalan issued a writ of execution against the
under its Charter (RA 6395).
Philippine National Bank for garnishment of the funds
deposited by the Philippine Virginia Tobacco
As a Government Owned and Controlled Corporation, it has a
Administration.
personality of its own, distinct and separate from that of the
➔ The Philippine National Bank objected to the decision
Government. Moreover, the charter provision that the NPC
and raised its “immunity from suit”, alleging that the
can “sue and be sued in any court” is without qualification on
funds deposited by the Philippine Virginia Tobacco
the cause of action and accordingly it can include a tort claim
Administration were public in character.
such as the one instituted by the petitioners.
Issue: W/N the Doctrine of State Immunity could bar a notice

Doctrine: Expressio unius est exclusio alterius or what is not
of garnishment.
included is deemed excluded.
Held: No. As a general rule, the doctrine of non-suability
cannot be legally set forth as a bar or impediment to a notice Bureau of Printing vs. Bureau of Printing Employees
of garnishment. Funds of the government may not be Association
garnished, attached, or levied upon as a GOCC has a G.R. No. L-15751
personality of its own, distinct and separate from that of the
government. Facts:
➔ The Bureau of Printing Employees Association (NLU) filed
However, as an exception, when the government enters into a a complaint for unfair labor practice against the Bureau
commercial business, it abandons its sovereign capacity and of Printing (Bureau).
is to be treated like any other corporation. By engaging in a ➔ NLU asserted that the Bureau was interfering with or
particular business thru the instrumentality of a corporation, coercing the employees to discourage them in pursuing
the government divests itself pro hac vice of its sovereign union activities.
character, so as to render the corporation subject to the rules ➔ Answering the complaint of NLU, the Bureau stated that
of law governing private corporations. the respondents were suspended pending the result of
an administrative investigation against them, for breach
Doctrine: As Justice Ozaeta said, when the government enters of Civil Service rules and regulations. Further, the Bureau
into a commercial business, it abandons its sovereign asserted that they don’t have a separate juridical
capacity. personality to sue or be sued, adding that it is a mere
agency of the Republic, which performs governmental
Pro hac vice – “For this occasion only” functions; thus, the Court of Industrial Relations (CIR) has
no jurisdiction over the issue at hand.
Rayo vs. CFI of Bulacan ➔ The motion of the Bureau was granted, but after the
G.R. No. L-55273-83. December 19, 1981 hearing, the judge of CIR sustained the theory that the
functions of the Bureau are exclusively propriety in
Facts: nature and denied the prayer for dismissal.
➔ During the height of typhoon Kading, National Power
Corporation (NPC), acting through its plant Issue: W/N Bureau of Printing may be sued.
superintendent Chavez, opened or caused to open all the
three floodgates of Angat Dam. As a direct and
22

Held: No. The Bureau of Printing is an office of the How much of the function is commercial?
Government created by the Administrative Code of 1916 (Act The volume of private jobs done, in comparison with
No. 2657). As such, it operates under the direct supervision of government jobs, is only ½ of 1%.
the Executive Secretary, Office of the President, and is charged
with the execution of all printing and binding, including work Mobil Philippines Exploration vs. Custom Arrastre Service
incidental to those processes, required by the National G.R. No. L-23139. December 17, 1966
Government. It has no corporate existence, and its
appropriations are provided for in the General Appropriations Facts:
Act (GAA).
➔ 4 cases of rotary drill parts were shipped from abroad via
S.S. Leoville. It was consigned to Mobil Philippines
Although the Bureau receives outside jobs and that many of
Exploration, Inc.
its employees are paid for overtime work, this does not justify
➔ The shipment arrived at the Port of Manila and was
the conclusion that its functions are exclusively proprietary in
discharged to the custody of the Customs Arrastre
nature. As a matter of administrative policy, the OT
Service, the unit of the Bureau of Customs handling the
compensation may be paid; however, upon the discretion of
arrastre operations.
the head of the Bureau depending on the GAA. So, it cannot
➔ The Customs Arrastre Service, later, delivered to the
be the basis for holding that the functions are wholly
broker of the consignee 3 cases only.
proprietary in nature.
➔ Thus, Mobil filed a suit against the Customs Arrastre
The Bureau is the only one authorized to use the Government Service and the Bureau of Customs to recover the value
seal on bank checks and other documents. The volume of of the undelivered case.
private jobs done, in comparison with government jobs, is ➔ The defendants filed a motion to dismiss on the ground
only ½ of 1%. that it cannot be sued as per the law.
➔ The Court, then, dismissed the complaint on the ground
Although the Bureau is allowed to undertake private printing that neither the Customs Arrastre Service nor the Bureau
jobs, it cannot be pretended that it is an industrial or business of Customs is suable. Thus, this petition.
concerns as the additional work is merely incidental to its
function since there is no showing that the employees Issue: W/N Custom Arrastre Service may be sued.
performing the said proprietary functions are separate and
distinct from those employed with general governmental Held: No. First of all, the Bureau of Customs, acting as part of
functions. the machinery of the National Government in the operation
of the arrastre service, pursuant to express legislative mandate
As an office of the Government, without any corporate or and as a necessary incident of its prime governmental
juridical personality, the Bureau cannot be sued. Any suit, function, is immune from suit, there being no statute to the
action, or proceeding against it, if it were to produce any contrary.
effect, would actually be a suit, action, or proceeding against
the Government, and the rule is settled that the Government Further, although the said arrastre function may be deemed
cannot be sued without its consent, much less over its proprietary, such function is a necessary incident of the
objection. primary and governmental function of the Bureau of Customs,
so that engaging in the same does not necessarily render said
ON THE ISSUE OF THE JURISDICTION OF THE CIR OVER THE Bureau liable to suit. For otherwise, it could not perform its
CASE: governmental function without necessarily exposing itself to
The Court of Industrial Relations has no jurisdiction over the suit. Sovereign immunity granted as to the end, should not be
subject matter because the Industrial Peace Act was intended denied as to the necessary means to that end.
to apply only to industrial employment, and to govern the
relations between employers engaged in industry and Doctrine: The fact that a non-corporate government entity
occupations for purposes of gain, and their industrial performs a function proprietary in nature does not necessarily
employees. In this case, the administrative charges for result in its being suable. If said non-governmental function is
insubordination, grave misconduct, and acts prejudicial to undertaken as an incident to its governmental function, there
public service committed by the respondents must only be is no waiver thereby of the sovereign immunity from suit
investigated and further petitioned with the Heads of extended to such government entity.
Departments and Bureaus authorized to institute and
investigate administrative charges. Thus, for the CIR to take What is its function?
cognizance of such matters is beyond its functions as an The Bureau of Customs has no personality of its own, apart
Industrial Court. from that of the national government. Its primary function is
governmental as it assesses and collects lawful revenues from
Doctrine: An office of the government without any corporate imported articles and all other tariff and custom duties, fees,
or juridical personality cannot be sued without its consent.
23

charges, fines, and penalties. To this function, arrastre service Suits against State agencies with relation to matters in which
is a necessary incident. they have assumed to act in private or non-governmental
capacity, and various suits against certain corporations
How many percent of its function is governmental? created by the State for public purposes, but to engage in
0% matters partaking more of the nature of ordinary business
rather than a governmental or political character, are not
To be sued, a defendant in a civil suit must be? regarded as suits against the State.
➔ A natural person
➔ A juridical person Doctrine: If the power to sue and be sued has been granted
➔ An entity authorized by law to be sued without qualification, it can include a claim based on tort
or quasi-delict. Immunity from suit is determined by the
Civil Aeronautics Administration vs. CA character of the objects for which the entity was organized.
G.R. No. L-51808. November 8, 1988
National Airports vs. Teodoro, Sr. – In this case, the Court held
Facts:
otherwise, stating that it can include a claim based on tort or
➔ Private respondent, Ernest E. Simke, is a naturalized
quasi-delict. Further, it was settled that CAA, as an agency, is
Filipino citizen and at the time of the incident was the not immune from suit as it is engaged in functions pertaining
Honorary Consul General of Israel in the Philippines. to a private entity. To state, “CAA is engaged in an enterprise
➔ Simke, with several other persons, went to the Manila which, far from being the exclusive prerogative of the State,
International Airport to meet his future son-in-law. In may, more than the construction of public roads, be
order to get a better view, their group proceeded to the undertaken by private concerns.”
viewing deck or terrace of the airport.
➔ While walking on the terrace, Simke slipped over an Can the CAA answer to damages?
elevation. As a result, he broke his thigh bone. Yes. The liability of CAA to answer for damages, whether
➔ After his operation, Simke filed an action for damages actual, moral, or exemplary, cannot be seriously doubted in
based on quasi-delict against the Civil Aeronautics view of the conferment of the power to sue and be sued upon
Administration (CAA) as the entity empowered to it.
administer, operate, manage, control, maintain, and
develop the Manila International Airport. Air Transportation Administration vs. Sps. David
➔ Judgment was rendered in favor of Simke. However, G.R. No. 159402. February 23, 2011
CAA’s motion to reconsideration on the ground of
immunity of suit, was denied by the trial court. Facts:
➔ Sps. Ramos discovered that a portion of their land was
Issue: W/N CAA may be sued. being used as part of the runway and running shoulder
of the Loakan Airport, which was being operated by the
Held: Yes. Air Transportation Office (ATO).
➔ Executive Order No. 365 – The law prevailing in the 1952 ➔ Subsequently, Sps. Ramos agreed to sell such property
Teodoro case, which reorganized the CAA; thus, to ATO for a certain consideration.
abolishing the National Airports Corporation. ➔ However, ATO failed to pay.
➔ Republic Act No. 776 – Or the Civil Aeronautics Act of the ➔ Thus, Sps. Ramos filed an action for collection against
Philippines, did not alter the character of CAA’s
ATO and some of its officials with the RTC.
objectives under Executive Order No. 365, which led the
➔ In their answer, ATO invoked as an affirmative defense
Court to consider the CAA in the category of a private
the issuance of Proclamation No. 1358, whereby
entity.
President Marcos had reserved certain parcels of land for
the use of the Loakan Airport—which unfortunately
From the foregoing, it can be seen that CAA is tasked with included Sps. Ramos land. Further, ATO asserted that the
private or non-governmental functions which operate to RTC has no jurisdiction.
remove it from the purview of the rule on State Immunity from
suit. Issue: W/N the Doctrine of State Immunity be extended to
ATO.
Not all government entities, whether corporate or non-
corporate, are immune from suits. Immunity from suit is Held: No. In the previous case of Civil Aeronautics Association
determined by the character of the objects for which the vs. CA, it was upheld that not all government entities, whether
entity was organized. corporate or non-corporate, are immune from suits. Immunity
from suit is determined by the character of the objects for
which the entity was organized.
24

Suits against State agencies with relation to matters in which ➔ However, the said driver and owner of the jeepney filed
they have assumed to act in private or non-governmental a third party complaint against the Municipality of San
capacity, and various suits against corporation created by the Fernando and the driver of the dump truck.
State for public purposes, but to engaged in matters partaking
more of the nature of ordinary business rather than functions Issue: W/N the respondent court committed GADALEJ when it
of a governmental or political character, are not regarded as deferred and failed to resolve the defense of non-suability of
suits against the State. the State amounting to lack of jurisdiction in a motion to
dismiss.
In this case, ATO, as an agency of the Government not
performing a purely governmental or sovereign function, but Held: The respondent judge did not commit grave abuse of
was instead involved in the management and maintenance of discretion when in the exercise of its judgment it arbitrarily
the Loakan Airport, an activity that was not the exclusive failed to resolve the issue of non-suability of the State.
prerogative of the State in its sovereign capacity. Hence, ATO However, said judge acted in excess of his jurisdiction when
had no claim to the State’s Immunity from suit. Hence, the he held the Municipality liable for the quasi-delict committed
Doctrine of State Immunity cannot be successfully invoked to by its employee.
defeat a valid claim for compensation arising from taking
without just compensation and without proper expropriation Express consent may be embodied in a general law or a
proceedings. special law. The standing consent of the State to be sued in
case of money claims involving liability arising from contracts
Republic Act No. 9497 – The Civil Aviation Authority Act of is found in Act No. 3083. A special law may be passed to
2008 rendered the issue of whether or not ATO could be sued enable a person to sue the government for an alleged quasi-
without the State’s consent moot. Under its transitory delict. Consent is implied when the government enters into
provisions, RA 9497 was established in place of the ATO the business contracts, thereby descending to the level of the
Civil Aviation Authority of the Philippines, which thereby other contracting party, and also when the State files a
assumed all of ATO’s powers, duties and rights, assets, real complaint, thus opening itself to a counterclaim.
and personal properties, funds, and revenues. With the CAAP
having legally succeeded ATO, the obligations of ATO had Municipal corporations are agencies of the State when they
incurred by virtue of deed of sale with the Ramos spouses are engaged in governmental functions and therefore should
might now be enforced against the CAAP. enjoy the sovereign immunity from suit. Nevertheless, they
are subject to suit even in the performance of such functions
Doctrine: The Doctrine of State Immunity is not an instrument because their charter provided that they can sue and be sued.
for perpetrating any injustice on a citizen. Municipal corporations are suable because their charters
grant them the competence to sue and be sued. Nevertheless,
Practical considerations for the immunity of suit according to they are generally not liable for torts committed by them in
Justice Holmes – A sovereign is exempt from suit, not because the discharge of governmental functions and can be held
of any formal conception or obsolete theory, but on the answerable only if it can be shown that they were acting in a
logical and practical ground that there can be no legal right proprietary character. In permitting such entities to be sued,
as against the authority that makes the law on which the right the State merely gives the claimant the right to show that the
depends. Practical considerations dictate the establishment of defendant was not acting in its governmental capacity when
an immunity from suit in favor of the State. Otherwise, if the the injury was committed or that the case comes under the
State is suable at the instance of every other individual, exceptions recognized by law. Failing this, the claimant cannot
government service may be severely obstructed and public recover.
safety endangered because of the number of suits that the
State has to defend against it. In this case, the driver of the dump truck of the municipality
insists that he was on his way to the Naguilian river to get a
Mun. of San Fernando vs. Firme load of sand and gravel for the repair of San Fernando’s
G.R. No. 52179. April 8, 1991 municipal streets. In the absence of any evidence to the
contrary, the regularity of the performance of official duty is
presumed.
Facts:
➔ A collision occurred involving a passenger jeepney and a
Thus, the driver of the dump truck was performing duties or
dump truck owned by the Municipality of San Fernando.
tasks pertaining to his office. This Court arrived at the
➔ Due to the impact, several passengers of the jeepney conclusion that the municipality cannot be held liable for torts
died, some sustained injuries, while others suffered committed by its regular employee, who was then engaged in
physical injuries. the discharge of governmental functions.
➔ Thus, the private respondent-victims filed a complaint
for damages against the driver and owner of the jeepney.
25

Doctrine: Municipal corporations are suable because their Reconveyance and to pay them on the proportion
charters grant them the competence to sue and be sued. mentioned, which corresponds to the rentals it has
Nevertheless, they are generally not liable for torts committed collected from the occupants for their use and
by them in the discharge of governmental functions and can occupation from 1970 to 1975.
be held answerable only if it can be shown that they were ➔ When the judgment became final, the Municipality filed
acting in a proprietary character. an appeal, but it was dismissed due to failure to file on
time.
What is the function involved? ➔ Later, the Municipality filed a Motion to Quash the writ
The driver in this case was performing his duties/tasks in the of execution on the ground that the municipality’s
discharge of his governmental functions. property or funds are all public funds exempt from
execution. However, it was also denied.
What is the primary consideration?
The primary consideration is the absence of any evidence to Issue: W/N the funds of the Municipality of San Miguel exempt
the contrary. If there is no evidence, there is a presumption from execution for the satisfaction of the money judgment.
that there was regularity in the performance of official duty.
Held: Yes. Public funds are not subject to levy and execution
In incorporated agencies, will courts only look at the charter? as they are held in trust for the people, intended and used for
Yes, its suability depends upon whether its own organic act, the accomplishment of the purposes for which municipal
specifically when it provides that it can sue and be sued in corporations are created, and that to subject said properties
Court. and public funds to execution would materially impede, even
defeat and in some instances destroy the said purpose.
What do they need to look at in determining the liability of
the government? Public property, taxes, and public revenues of such
The Courts need to look into the function to determine the corporations cannot be seized under execution, either in the
suability, and the charter as well, regardless of function. treasury or when in transit to it. Judgments rendered for taxes,
and the proceeds of such judgments in the hands of the
Is it liable if it acts thru a special agent? officers of the law, are not subject to execution unless so
No. The State is generally not liable for torts committed by declared by statute.
their agents in the discharge of governmental functions.
However, as an exception, if it can be shown that they were In this case, it is clear that all the funds of the petitioner-
acting in a proprietary character, the State may be sued for municipality in the possession of the Municipal Treasurer, as
the acts of their agents. well as those in the possession of the Provincial Treasurer, are
also public funds and as such they are exempt from execution.
What is the suability of an unincorporated government office?
An unincorporated government agency without any separate Presidential Decree No. 477 – Local government financial
juridical personality of its own enjoys immunity from suit affairs, transactions, and operations shall be governed by the
because it is invested with an inherent power of sovereignty. fundamental principles set forth hereunder:
Accordingly, a claim for damages against the agency cannot (a) No money shall be paid out of the treasury except
prosper; otherwise, the doctrine of sovereign immunity is in pursuance of a lawful appropriation or other
violated. However, the need to distinguish between an specific statutory authority.
unincorporated government agency performing Otherwise stated, there must be a corresponding
governmental function and one performing proprietary appropriation in the form of an ordinance duly passed by the
functions has arisen. The immunity has been upheld in favor Sangguniang Bayan before any money of the Municipality
of the former because its function is governmental or may be paid out.
incidental to such function; it has not been upheld in favor of
the latter whose function was not in pursuit of a necessary In this case, it has not been shown that the Sangguniang
function of government but was essentially a business. Bayan has passed an ordinance to this effect.
Mun. if San Miguel vs. Fernandez Doctrine: Public funds are not subject to levy and execution;
G.R. No. L-61744. June 25, 1984 thus, taxes are not subject to execution, unless so declared by
statute.
Facts:
➔ Margarita Imperio filed a case against the Municipality of
San Miguel and ordered the partial revocation of the
Deed of Donation signed by the deceased Carlos Imperio
in favor of the Municipality of San Miguel.
➔ Further, Margarita ordered the Municipality of San
Miguel to execute the corresponding Deed of
26

Mun. of Makati vs. CA City of Caloocan vs. Judge Allarde
G.R. No. 89898-99. October 1, 1990 G.R. No. 107271. September 10, 2003
Facts: Facts:
➔ A bank account was opened with PNB under the name ➔ Samson, Mayor of Caloocan, through Ordinance No.
of the Municipality of Makati. 1749, abolished the position of Assistant City
➔ After due hearing, where the parties presented their Administrator and 17 other positions from the plantilla
appraisal reports regarding the value of the property, the of the local government of Caloocan.
RTC Judge rendered a decision which fixed the appraised ➔ Then Assistant City Administrator, Santiago, assailed the
value of the property at P5,291,666 and ordering the legality of the abolition. The CFI declared the abolition
Municipality to pay this amount minus the advance illegal and ordered the reinstatement of the dismissed
payment of P338,160, which was earlier released to the employees and the payment of their backwages.
private respondent. ➔ The City of Caloocan appealed to the CA, but Santiago
➔ After this decision became final and executory, private and the others moved for the dismissal for being dilatory
respondent moved for the issuance of a writ of and frivolous. But the appellate court denied their
execution, which the RTC Judge granted. Thus, a Notice motion. Thus, when it was elevated to the SC, the SC
of Garnishment was served by the respondent sheriff stated that the decision was correct.
upon the manager of PNB. ➔ Thus, the City of Caloocan paid Santiago P75,083.37 in
➔ However, the respondent sheriff was informed that a partial payment of her backwages, leaving a balance of
hold code was placed on the account of the Municipality P530,761.91. While, her other co-complainants were paid
of Makati. As a result, private respondent filed a motion in full.
directing PNB to deliver to respondent sheriff the unpaid ➔ A year later, the City of Caloocan appropriated funds for
balance of the Municipality of Makati. her unpaid back salaries. It was included in Supplemental
➔ Petitioner filed a motion for reconsideration, contending Budget No. 3 for the fiscal year 1987. However, the City
that its funds deposited with PNB could neither be refused to release the money to Santiago.
garnished nor levied upon execution, for to do so would
result in the disbursement of public funds without the Issue: W/N Santiago may recover from the City of Caloocan.
proper appropriation required under the law.
Held: Yes. As a general rule, all government funds deposited
Issue: W/N the funds of the Municipality of Makati exempt in PNB or any other official depositary of the Philippine
from garnishment and levy upon execution. Government, whether by general or special deposit, remain
government funds and may not be subject to garnishment or
Held: Yes. The properties of a municipality, whether real or levy, in the absence of a corresponding appropriation
personal, which are necessary for public use cannot be required by law. Further, the functions and public services
attached and sold at execution sale to satisfy a money rendered by the State cannot be allowed to be paralyzed or
judgment against the municipality. Municipal revenues disrupted by the diversion of public funds from their
derived from taxes, licenses, and market fees, which are legitimate and specific objects, as appropriated by law.
intended primarily and exclusively for the purpose of However, as an exception, when there is a corresponding
financing the governmental activities and functions of the appropriation as required by law, the rule on immunity of
municipality, are exempt from execution. public funds from seizure or garnishment does not apply.
In this case, the Municipality has passed an ordinance In this case, the City Council of Caloocan has already approved
appropriating from its public funds an amount corresponding and passed Ordinance No. 0134, Series of 1992, allocating the
to the balance due under the RTC decision. amount of P439,377.14 for Santiago’s back salaries plus
interest. For all intents and purposes, the above-mentioned
OTHER LEGAL RECOURSE ordinance for Santiago was deemed automatically segregated
Where a municipality fails or refuses, without justifiable from the other budgetary allocations of the City of Caloocan
reason, to effect payment of a final money judgment rendered and earmarked solely for the City’s monetary obligation to
against it, the claimant may avail of the remedy of mandamus her.
in order to compel the enactment and approval of the
necessary appropriation ordinance, and the corresponding Doctrine: Immunity of public funds from seizure or
disbursement of municipal funds. garnishment does not apply where the funds sought to be
levied under execution are already allocated by law
Doctrine: The State’s power of eminent domain should be specifically for the satisfaction of the money judgment against
exercised within the bounds of fair play and justice. Thus, it the government.
cannot hide behind the mantle of the doctrine of State
Immunity for such acts of injustice. They are political laws; hence they are deemed abrogated.
27


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POLITICAL LAW REVIEW

Given the official character of the letter, the petitioners were,

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

It does not apply where the contract relates to the exercise of

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

RESTRICTIVE THEORY OF STATE IMMUNITY Veterans Manpower vs. CA

POLI RECIT Qs / STATE IMMUNITY

The correct test for the application of state immunity is not

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

How does the State commence action?

POLI RECIT Qs / STATE IMMUNITY

In the instant case, the Department of Agriculture has not

POLI RECIT Qs / STATE IMMUNITY

Issue: W/N the Doctrine of State Immunity could bar a notice

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

POLI RECIT Qs / STATE IMMUNITY

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