TITLE: REPUBLIC vs. VILLASOR CITATION: G.R. NO.

L-30671 1973 DATE: November 28,

Facts: The Republic of the Philippines in this certiorari and prohibition proceeding challenges the validity of an order issued by respondent Judge Guillermo P. Villasor, then of the Court of First Instance of Cebu, Branch I, declaring a decision final and executory and of an alias writ of execution directed against the funds of the Armed Forces of the Philippines subsequently issued in pursuance thereof, the alleged ground being excess of jurisdiction, or at the very least, grave abuse of discretion. On July 3, 1961, a decision was rendered in Special Proceedings No. 2156-R in favor of respondents P. J. Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation, and against the petitioner, confirming the arbitration award in the amount of P1,712,396.40, subject of Special Proceedings. It was declared final and executory by Respondent Hon. Guillermo P. Villasor, directing the Sheriffs of Rizal Province, Quezon City [as well as] Manila to execute the said decision. Pursuant to the said declaration, the corresponding Alias Writ of Execution was issued. The Provincial Sheriff of Rizal served notices of garnishment with several Banks, specially on the "monies due the Armed Forces of the Philippines in the form of deposits sufficient to cover the amount mentioned in the said Writ of Execution"; the Philippine Veterans Bank received the same notice of garnishment. The funds of the Armed Forces of the Philippines on deposit with the Banks are public funds duly appropriated and allocated for the payment of pensions of retirees, pay and allowances of military and civilian personnel and for maintenance and operations of the Armed Forces of the Philippines. The petitioner filed a petition against Villasor for acting in excess of jurisdiction [or] with grave abuse of discretion amounting to lack of jurisdiction in granting the issuance of an alias writ of execution against the properties of the Armed Forces of the Philippines, hence, the Alias Writ of Execution and notices of garnishment issued are null and void.

Issues: (1) Whether or not the Writ of Execution issued by Villasor is valid.

The Courts Ruling: The Republic of the Philippines, as mentioned at the outset, did right in filing this certiorari and prohibition proceeding. What was done by respondent Judge is not in conformity with the dictates of the Constitution.

It is a fundamental postulate of constitutionalism flowing from the juristic concept of sovereignty that the state as well as its government is immune from suit unless it gives its consent. It is readily understandable why it must be so. In the classic formulation of Holmes: "A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends." A corollary, both dictated by logic and sound sense from a basic concept is that public funds cannot be the object of a garnishment proceeding even if the consent to be sued had been previously granted and the state liability adjudged. It is made clear why the Republic of the Philippines could rightfully allege a legitimate grievance. The writs of certiorari and prohibition are GRANTED, nullifying and setting aside both the order of June 24, 1969 declaring executory the decision of July 3, 1961 as well as the alias writ of execution issued thereunder.

TITLE: REPUBLIC vs. FELICIANO CITATION: G.R. No. 70853 1987

Facts: Petitioner seeks the review of the decision of the Intermediate Appellate Court dated April 30, 1985 reversing the order of the Court of First Instance of Camarines Sur, Branch VI, dated August 21, 1980, which dismissed the complaint of respondent Pablo Feliciano for recovery of ownership and possession of a parcel of land on the ground of non-suability of the State. On January 22, 1970, Feliciano filed a complaint with the then Court of First Instance of Camarines Sur against the RP, represented by the Land Authority, for the recovery of ownership and possession of a parcel of land. The defendant, represented by the Land Authority, filed an answer, raising by way of affirmative defenses lack of sufficient cause of action and prescription. On August 29, 1970, the trial court rendered a decision declaring Lot No. 1, with an area of 701.9064 hectares, to be the private property of Feliciano. A motion to intervene and to set aside the decision of August 29, 1970 was filed by eighty-six (86) settlers. On January 25, 1971, the court a quo reconsidered its decision, reopened the case and directed the intervenors to file their corresponding pleadings and present their evidence

DATE: March 12,

while plaintiff (Feliciano), as well as the Republic of the Philippines, could present additional evidence. The interveners did not appear on the day scheduled for the presentation of evidence and submitted a motion for postponement instead which was denied. Feliciano, on the other hand presented additional evidence. Thereafter the case was submitted for decision and the court ruled in favor of Feliciano. The interveners filed a motion to dismiss on the ground that the Republic of the Philippines cannot be sued without its consent hence the action cannot prosper. The motion was opposed by Feliciano. Issues: (1) Whether or not the state can be sued for recovery and possession of a parcel of land

The Courts Ruling:

A suit against the state is not permitted, except upon a showing that the state has consented to be sued, either expressly of by implication through the use of statutory language too plain to be misinterpreted. Waiver of immunity, being a derogation of sovereignty, will not be inferred lightly, but must be construed in strictissimi juris (of strictest right). Moreover, the Proclamation is not a legislative act. The consent of the State to be sued must emanate from statutory authority. The Waiver of State immunity can only be made by an act of the legislative body
Worthy of note is the fact, as pointed out by the Solicitor General, that the informacion posesoria registered in the Office of the Register of Deed of Camarines Sur on September 23, 1952 was a "reconstituted" possessory information; it was "reconstituted from the duplicate presented to this office (Register of Deeds) by Dr. Pablo Feliciano," without the submission of proof that the alleged duplicate was authentic or that the original thereof was lost. Reconstitution can be validly made only in case of loss of the original. 10 These circumstances raise grave doubts as to the authenticity and validity of the "informacion posesoria" relied upon by respondent Feliciano. Adding to the dubiousness of said document is the fact that "possessory information calls for an area of only 100 hectares," 11 whereas the land claimed by respondent Feliciano comprises 1,364.4177 hectares, later reduced to 701-9064 hectares.

Courts should be wary in accepting "possessory information documents, as well as other purportedly old Spanish titles, as proof of alleged ownership of lands. Judgment was rendered reversing and setting aside the appealed decision of the Intermediate Appellate Court, dated April 30, 1985, and affirming the order of the court a quo, dated August 21, 1980, DISMISSING the complaint filed by respondent Pablo Feliciano against the Republic of the Philippines.

TITLE: PNB vs. PABALAN CITATION: G.R. No. L-33112 15, 1978 DATE: June

Facts: The reliance of petitioner Philippine National Bank in this certiorari and prohibition proceeding against respondent Judge Javier Pabalan who issued a writ of execution, followed thereafter by a notice of garnishment of the funds of respondent Philippine Virginia Tobacco Administration, deposited with it, is on the fundamental constitutional law doctrine of non-suability of a state, it being alleged that such funds are public in character. It is undisputed that the judgment against respondent Philippine Virginia Tobacco Administration had reached the stage of finality. A writ of execution was, therefore, in order. It was accordingly issued on December 17, 1970. There was a notice of garnishment for the full amount mentioned in such writ of execution. In view of the objection, however, by petitioner Philippine National Bank on the above ground, coupled with an inquiry as to whether or not respondent Philippine Virginia Tobacco Administration had funds deposited with petitioners La Union branch, it was not until January 25, 1971 that the order sought to be set aside in this certiorari proceeding was issued by respondent Judge. Its dispositive portion reads as follows: Conformably with the foregoing, it is now ordered, in accordance with law, that sufficient funds of the Philippine Virginia Tobacco Administration now deposited with the Philippine National Bank, La Union Branch, shall be garnished and delivered to the plaintiff immediately to satisfy the Writ of Execution for one-half of the amount awarded in the decision of November 16, 1970. Issues: (1) Whether or not the funds are public in character, thus immune from suit The Courts Ruling: It is to be admitted that under the present Constitution, what was formerly implicit as a fundamental doctrine in constitutional law has been set forth in express terms: The State may not be sued without its consent. If the funds appertained to one of the regular departments or offices in the government, then, certainly, such provision would be a bar to garnishment. Such is not the case here. It is well-settled that when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other corporation. By engaging in a particular business through the instrumentality of a corporation, the government divests itself pro hac vice of its sovereign character, so as to render the corporation subject to the rules of law governing private corporations.

The non-suability clause raised by PVTA being a government owned corporation was also denied citing previous decisions held by the Supreme Court specifically citing that of Manila Hotel Employees Association vs Manila Hotel Company and to quote 'it is well-settled that when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other corporation.' WHEREFORE, this petition for certiorari and prohibition is DISMISSED. No costs

TITLE: DEPARTMENT OF AGRICULTURE vs NLRC, et al CITATION: G.R. No. 104269 1993 Facts:
Petitioner DOA and Sultan Security Agency and Sultan Security Agency entered into a contract for security services to be provided to the said government entity. In September 13, 1990, several security guards of the Sultan Security Agency filed a complaint for underpayment of wages, non-payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay and overtime pay, as well as for damages against the DOA and the Sultan Security Agency before the Regional Arbitration Branch in Cagayan De Oro City. The Labor Arbiter rendered a decision finding the DOA jointly and severally liable with the security agency for the payment of money claims of the complainant security guards. The DA and the security agency did not appeal the decision. Thus, the decision became final and executory. The Labor Arbiter issued a writ of execution to enforce and execute the judgment against the property of the DA and the security agency. Petitioner DOA filed a petition for injunction, prohibition and mandamus, with prayer for preliminary injunction with the NRC Cagayan De Oro. It argued that the writ of exection was effected without the Labor Arbiter hacing acquired jurisdiction over the DOA. Hence, its decision was null and void. It also pointed out that the attachment of its property would jeopardize its governmental functions to the prejudice of the public good. NLRC dismissed the petition for injunction for lack of basis.The writ of preliminary injunction previously issued is Lifted and Set Aside and in lieu thereof, a Temporary Stay of Execution is issued for a period of two (2) months but not extending beyond the last quarter of calendar year 1991. In this petition for certiorari, the petitioner [DOA] charges the NLRC with grave abuse of discretion for refusing to quash the writ of execution. It argued that money laims against the Department falls under the exclusive jusrisdiction of the Commission on Audit. More

DATE: November 11,

importantly, the petitioner asserts, the NLRC has disregarded the cardinal rule on the nonsuability of the State. The private respondents, on the other hand, argue that the petitioner has impliedly waived its immunity from suit by concluding a service contract with Sultan Security Agency. NLRC, on the other hand, argue that the petitioner has impliedly waived its immunity from suit by concluding service contract with Sultan Security Agency.

Issues: (1) Whether or not the Department of Agriculture can be sued

The Courts Rulings: The basic postulate enshrined in the Constitution that the State may not be sued without its consent reflects nothing less than recognition of the sovereign character of the State and an express affirmation of the unwritten rule effectively insulating it from the jurisdiction of courts. It is based on the very essence of sovereignty. A sovereign is exempt from suit based on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends.

The rule, in any case, is not really absolute for it does not say that the state may not be sued under any circumstances. On the contrary, as correctly phrased, the doctrine only conveys, "the state may not be sued without its consent;" its clear import then is that the State may be sued at times. The States consent may be given expressly or impliedly. Express consent may be made through a general law or a special law. Implied consent, on the other hand, is conceded when the State itself commences litigation, thus opening itself to a counterclaim, or when it enters into a contract. In this situation, the government is deemed to have descended to the level of the other contracting party and to have divested itself of its sovereign immunity.

But not all contracts entered into by the government operate as a waiver of its non-suability; distinction must still be made between one which is executed in the exercise of its sovereign function and another which is done in its proprietary capacity. A State may be said to have descended to the level of an individual and can this be deemed to have actually given its consent to be sued only when it enters in to business contracts. It does not apply where the contract relates to the exercise of its sovereign functions.

In the case, the DA has not pretended to have assumed a capacity apart from its being a governmental entity when it entered into the questioned contract; nor that it could have, in fact, performed any act proprietary in character.

But, be that as it may, the claims of private respondents, i.e. for underpayment of wages, holiday pay, overtime pay and similar other items, arising from the Contract for Service, clearly constitute money claims. Act No. 3083, aforecited, gives the consent of the State to be "sued upon any moneyed claim involving liability arising from contract, express or implied. Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by Presidential Decree ("P.D.") No. 1145, the money claim must first be brought to the Commission on Audit.

WHEREFORE, the petition is GRANTED.

The resolution, dated 27 November 1991, is hereby REVERSED and SET ASIDE. The writ of execution directed against the property of the Department of Agriculture is nullified, and the public respondents are hereby enjoined permanently from doing, issuing and implementing any and all writs of execution issued pursuant to the decision rendered by the Labor Arbiter against said petitioner.

TITLE: MOBIL PHILIPPINES EXPLORATION, INC. vs. CUSTOMS ARRASTRE SERVICE and BUREAU of CUSTOMS CITATION: G.R. No. L-23139 1966 Facts:
Four cases of rotary drill parts were shipped from abroad on S.S. "Leoville", sometime in November of 1962, consigned to Mobil Philippines Exploration, Inc., Manila. The shipment arrived at the Port of Manila on April 10, 1963, and was discharged to the custody of the Customs Arrastre Service, the unit of the Bureau of Customs handling arrastre operations. The Customs Arrastre Service later delivered to the broker of the consignee three cases only of the shipment. On April 4, 1964 Mobil Philippines Exploration, Inc., filed suit in the Court of First Instance of Manila against the Customs Arrastre Service and the Bureau of Customs to recover the value of the undelivered case in the amount of P18,493.37 plus other damages.

DATE: December 17,

On April 20, 1964 the defendants filed a motion to dismiss the complaint on the ground that not being persons under the law, defendants cannot be sued. After plaintiff opposed the motion, the court, on April 25, 1964, dismissed the complaint on the ground that neither the Customs Arrastre Service nor the Bureau of Customs is suable. Plaintiff appealed to Us from the order of dismissal. Raised, therefore, in this appeal is the purely legal question of the defendants' suability under the facts stated.Appellant contends that not all government entities are immune from suit; that defendant Bureau of Customs as operator of the arrastre service at the Port of Manila, is discharging proprietary functions and as such, can be sued by private individuals. Issues: (1) Whether or not the defendants can invoke state immunity The Courts Ruling: The Rules of Court, in Section 1, Rule 3, provide: SECTION 1. Who may be parties.Only natural or juridical persons or entities authorized by law may be parties in a civil action. Accordingly, a defendant in a civil suit must be (1) a natural person; (2) a juridical person or (3) an entity authorized by law to be sued. Neither the Bureau of Customs nor (a fortiori) its function unit, the Customs Arrastre Service, is a person. They are merely parts of the machinery of Government. The Bureau of Customs is a bureau under the Department of Finance (Sec. 81, Revised Administrative Code); and as stated, the Customs Arrastre Service is a unit of the Bureau of Custom, set up under Customs Administrative Order No. 8-62 of November 9, 1962 (Annex "A" to Motion to Dismiss, pp. 13-15, Record an Appeal). It follows that the defendants herein cannot he sued under the first two abovementioned categories of natural or juridical persons. Nonetheless it is urged that by authorizing the Bureau of Customs to engage in arrastre service, the law therebyimpliedly authorizes it to be sued as arrastre operator, for the reason that the nature of this function (arrastre service) is proprietary, not governmental. Thus, insofar as arrastre operation is concerned, appellant would put defendants under the third category of "entities authorized by law" to be sued. Stated differently, it is argued that while there is no law expressly authorizing the Bureau of Customs to sue or be sued, still its capacity to be sued is implied from its very power to render arrastre service at the Port of Manila, which it is alleged, amounts to the transaction of a private business.

The Bureau of Customs, to repeat, is p a r t o f t h e D e p a r t m e n t o f F i n a n c e w i t h n o personality of its own apart from that of the national government. Its primary function is governmental, that of assessing and collecting collecting lawful revenues from imported articles and all other tariff and customs duties, fees, charges, fines and penalties. To this function, arrastre service is a necessary incident. WHEREFORE, the order of dismissal appealed from is hereby affirmed, with costs against appellant. So ordered.

TITLE: MUNICIPALITY OF SAN FERNANDO, LA UNION vs. HON. JUDGE ROMEO N. FIRME
CITATION: G.R. No. L-52179 1991 DATE: April 8,

FACTS: This is a petition for certiorari with prayer for the issuance of a writ of preliminary mandatory injunction seeking the nullification or modification of the proceedings and the orders issued by the respondent Judge Romeo N. Firme in Civil Case No. 107-BG, entitled "Juana Rimando Bania, et al. vs. Macario Nieveras, et al.", decision dated October 10, 1979 ordering defendants Municipality of San Fernando, La Union and Alfredo Bislig to pay, jointly and severally, the plaintiffs for funeral expenses, actual damages consisting of the loss of earning capacity of the deceased, attorney's fees and costs of suit and dismissing the complaint against the Estate of Macario Nieveras and Bernardo Balagot. On October 10, 1979 the trial court rendered a decision, the dispositive portion is hereunder quoted as follows: IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered for the plaintiffs, and defendants Municipality of San Fernando, La Union and Alfredo Bislig are ordered to pay jointly and severally, plaintiffs Juana Rimando-Bania, Mrs. Priscilla B. Surell, Laureano Bania Jr., Sor Marietta Bania, Mrs. Fe B. Soriano, Montano Bania, Orja Bania and Lydia B. Bania the sums of P1,500.00 as funeral expenses and P24,744.24 as the lost expected earnings of the late Laureano Bania Sr., P30,000.00 as moral damages, and P2,500.00 as attorney's fees. Costs against said defendants. The Complaint is dismissed as to defendants Estate of Macario Nieveras and Bernardo Balagot. Petitioner filed a motion for reconsideration and for a new trial without prejudice to another motion which was then pending. Motion was first denied. Finally, the respondent judge issued an order dated December 3, 1979 providing that if defendants municipality and Bislig further wish to pursue the matter disposed of in the order of July 26, 1979, such should be elevated to a higher court in accordance with the Rules of Court. Hence, this petition. Petitioner maintains that the respondent judge committed grave abuse of discretion amounting to excess of jurisdiction in issuing the aforesaid orders and in rendering a decision. Furthermore, petitioner asserts that while appeal of the decision maybe available, the same is not the speedy and adequate remedy in the ordinary course of law. On the other hand, private respondents controvert the position of the petitioner and allege that the petition is devoid of merit, utterly lacking the good faith which is indispensable in a petition for certiorari and prohibition.

The controversy boils down to the main issue of whether or not the respondent court committed grave abuse of discretion when it deferred and failed to resolve the defense of nonsuability of the State amounting to lack of jurisdiction in a motion to dismiss. Issues: (1) Whether or not the judge committed grave abuse of discretion amounting to lack of jusrisdiction for failing to resolve defense of non-suability and holding Municipality liable The Courts Ruling: In the case at bar, the judge deferred the resolution of the defense of non-suability of the State until trial. However, the judge failed to resolve such defense, proceeded with the trial and then rendered a decision against the municipality and its driver. The judge did not commit GAD when it arbitrarily failed to resolve the issue of non-suability of the State in the guise of the municipality. However, the judge acted in excess of his jurisdiction when in his decision he held the municipality liable for the quasi-delict committed by its regular employee. The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Consti, to wit: "the State may not be sued without its consent." Express consent may be embodied in a general law or a special law. The standing consent of the State to be sued in case of money claims involving liability arising from contracts is found in Act No. 3083. A special law may be passed to enable a person to sue the government for an alleged quasi-delict. Consent is implied when the government enters into business contracts, thereby descending to the level of the other contracting party, and also when the State files a complaint, thus opening itself to a counterclaim. Municipal corporations are agencies of the State when they are engaged in governmental functions and therefore should enjoy the sovereign immunity from suit. Nevertheless, they are subject to suit even in the performance of such functions because their charter provided that they can sue and be sued. A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable."

Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the test of liability of the municipality depends on whether or not the driver, acting in behalf of the municipality, is performing governmental or proprietary functions. t has already been remarked that municipal corporations are suable because their charters grant them the competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the discharge of governmental functions and can be held answerable only if it can be shown that they were acting in a proprietary capacity. In the case at bar, the driver of the dump truck of the municipality insists that "he was on his way to the Naguilian river to get a load of sand and gravel for the repair of San Fernando's municipal streets." In the absence of any evidence to the contrary, the regularity of the performance of official duty is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule that the driver of the dump truck was performing duties or tasks pertaining to his office.We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District Engineer, and the Provincial Treasurer that "the construction or maintenance of roads in which the truck and the driver worked at the time of the accident are admittedly governmental activities." After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the municipality cannot be held liable for the torts committed by its regular employee, who was then engaged in the discharge of governmental functions. Hence, the death of the passenger tragic and deplorable though it may be imposed on the municipality no duty to pay monetary compensation. All premises considered, the Court is convinced that the respondent judge's dereliction in failing to resolve the issue of non-suability did not amount to grave abuse of discretion. But said judge exceeded his jurisdiction when it ruled on the issue of liability. ACCORDINGLY, the petition is GRANTED and the decision of the respondent court is hereby modified, absolving the petitioner municipality of any liability in favor of private respondents.

TITLE: MERRIT vs. GOVERNMENT OF THE PHILIPPINE ISLANDS CITATION: G.R. No. L-11154 21, 1916 DATE: March

FACTS:
It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a motorcycle, when an ambulance of the General Hospital struck the plaintiff in an intersection. By reason of the resulting collusion, the plaintiff was so severely injured that, according to Dr. Saleeby, he was suffering from a depression in the left parietal region, a wound in the same place and in the back part of his head, while blood issued from his nose and he was entirely unconscious. The marks revealed that he had one or more fractures of the skull and that the grey matter and brain had suffered material injury.

Upon recovery the doctor noticed that the plaintiffs leg showed a contraction of an inch and a half and a curvature that made his leg very weak and painful at the point of the fracture. Examination of his head revealed a notable readjustment of the functions of the brain and nerves. The damages that the plaintiff got from the collision disabled him to do this work as a contractor and forced him to give up contracts he recently had.

As the negligence which cause the collision is a tort committed by an agent or employee of the Government, the inquiry at once arises whether the Government is legally-liable for the damages resulting therefrom. The Philippine Legislature made an Act (Act No. 2457) that authorizes the plaintiff to bring suit against the GPI and authorizing the Attorney- General to appear in said suit.

ISSUE: (1) Whether or not the Government is legally liable for the damages incurred by the plaintiff

RULING: It is quite clear that Act. No. 2457 does not operate to extend the Governments liability to any cause not previously recognized.

According to paragraph 5 of Article 1903 of the Civil Code and the principle laid down in a decision, among others, of the May 18, 1904, in a damage case, the responsibility of the state is limited to that which it contracts through a special agent, duly empowered by a definite order or commission to perform some act or charged with some definite purpose which gives rise to the claim, and not where the claim is based on acts or omissions imputable to a public official charged with some administrative or technical office who can be held to the proper responsibility in the manner laid down by the law of civil responsibility. Consequently, the trial court in not so deciding and in sentencing the said entity to the payment of damages, caused by an official of the second class referred to, has by erroneous interpretation infringed the provisions of Articles 1902 and 1903 of the Civil Code.

It is, therefore, evidence that the State (GPI) is only liable, according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents, officers and employees when they act as special agents within the meaning of paragraph 5 of Article 1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an agent.

For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance. Whether the Government intends to make itself legally liable for the amount of damages above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, be legislative enactment and by appropriating sufficient funds therefore, we are not called upon to determine. This matter rests solely with the Legislature and not with the courts.

TITLE: USA vs. GUINTO

CITATION: G.R. No. 76607 1990

DATE: February 26,

Facts: The private respondents are suing several officers of the U.S. Air Force stationed in Clark Air Base in connection with the bidding conducted by them for contracts for barber services in the said base.

On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S. Air Force, solicited bids for such contracts through its contracting officer, James F. Shaw. The bidding was won by Ramon Dizon, over the objection of the private respondents, who claimed that he had made a bid for four facilities, including the Civil Engineering Area, which was not included in the invitation to bid. The private respondents complained to the Philippine Area Exchange (PHAX). The latter, through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse explained that the Civil Engineering concession had not been awarded to Dizon as a result of the February 24, 1986 solicitation. Dizon was already operating this concession, then known as the NCO club concession, and the expiration of the contract had been extended from June 30, 1986 to August 31, 1986. They further explained that the solicitation of the CE barbershop would be available only by the end of June and the private respondents would be notified. On June 30, 1986, the private respondents filed a complaint in the court to compel PHAX and the individual petitioners to cancel the award to defendant Dizon, to conduct a rebidding for the barbershop concessions and to allow the private respondents by a writ of preliminary injunction to continue operating the concessions pending litigation. Upon the filing of the complaint, the respondent court issued an ex parte order directing the individual petitioners to maintain the status quo. On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for preliminary injunction on the ground that the action was in effect a suit against the United States of America, which had not waived its non-suability. The individual defendants, as official employees of the U.S. Air Force, were also immune from suit. On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary injunction. On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part as follows: From the pleadings thus far presented to this Court by the parties, the Court's attention is called by the relationship between the plaintiffs as well as the defendants, including the US Government, in that prior to the bidding or solicitation in question, there was a binding contract between the plaintiffs as well as the defendants, including the US Government. By virtue of said contract of concession it is the Court's understanding that neither the US Government nor the herein principal defendants would become the employer/s of the plaintiffs but that the latter are the employers themselves of the barbers, etc. with the employer, the plaintiffs herein, remitting the stipulated percentage of commissions to the Philippine Area Exchange. The same circumstance would become in effect when the Philippine Area Exchange opened for bidding or solicitation the questioned barber shop concessions. To this extent, therefore, indeed a

commercial transaction has been entered, and for purposes of the said solicitation, would necessarily be entered between the plaintiffs as well as the defendants. Issues: (1) Whether or not the defendants were immune from suit under the RP-US Bases Treaty for acts done by them in the performance if their official duties

The Courts Ruling:

A state may not be sued without its consent. This doctrine is not absolute and does not say the state may not be sued under any circumstance.

The rule says that the state may not be sued without its consent, which clearly imports that it may be sued if it consents.

The consent of the state to be sued may be manifested expressly or impliedly. Express consent may be embodied in a general law or a special law. Consent is implied when the state enters into a contract or it itself commences litigation. When the government enters into a contract, it is deemed to have descended to the level of the other contracting party and divested itself of its sovereign immunity from suit with its implied consent. Waiver is also implied when the government files a complaint, thus opening itself to a counterclaim.

The USA, like any other state, will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity.

The barbershops concessions are commercial enterprises operated by private persons. They are not agencies of the US Armed forces.

Therefore, petition to plead immunity was DENIED. Case should be remanded to the lower court.

TITLE: REPUBLIC of INDONESIA vs. VINZON CITATION: G.R. NO. 154705

FACTS: This is a petition for review on certiorari to set aside the Decision of the Court of Appeals dated May 30, 2002 and its Resolution dated August 16, 2002, in CA-G.R. SP No. 66894 entitledThe Republic of Indonesia, His Excellency Ambassador Soeratmin and Minister Counselor Azhari Kasim v. Hon. Cesar Santamaria, Presiding Judge, RTC Branch 145, Makati City, and James Vinzon, doing business under the name and style of Vinzon Trade and Services. Petitioner, Republic of Indonesia, entered into a Maintenance Agreement in August 1995 with respondent James Vinzon, sole proprietor of Vinzon Trade and Services. The agreement stated that respondent shall, for a consideration, maintain specified equipment at the Embassy Main Building, Embassy Annex Building and the Wisma Duta, the official residence of petitioner Ambassador Soeratmin. The equipments covered by the agreement are air conditioning units, generator sets, electrical facilities, water heaters, and water motor pumps. The agreement shall be effective for a period of four years and will renew itself automatically unless cancelled by either party by giving thirty days prior written notice from the date of expiry. Petitioners claim that sometime prior to the date of expiration of the said agreement, they informed respondent that the renewal of the agreement shall be at the discretion of the incoming Chief of Administration, who allegedly found respondents work and services unsatisfactory and not in compliance with the standards set in the Agreement. Hence, the Indonesian Embassy terminated the agreement. Petitioners claim that they had earlier verbally informed respondent of their decision to terminate the agreement. On the other hand, respondent claims that the aforesaid termination was arbitrary and unlawful. Hence, respondent filed a complaint in the (RTC) of Makati. Petitioners filed a Motion to Dismiss, alleging that the Republic of Indonesia, as a foreign sovereign State, has sovereign immunity from suit and cannot be sued as a party-defendant in the Philippines. The said motion further alleged that Ambassador Soeratmin and Minister Counsellor Kasim are diplomatic agents as defined under the Vienna Convention on Diplomatic Relations and therefore enjoy diplomatic immunity. In turn, respondent filed on March 20, 2001, an Opposition to the said motion alleging that the Republic of Indonesia has expressly waived its immunity from suit. He based this claim upon the following provision in the Maintenance Agreement:

DATE: June 26, 2003

(a) Any legal action arising out of this Maintenance Agreement shall be settled according to the laws of the Philippines and by the proper court of Makati City, Philippines. Respondents Opposition likewise alleged that Ambassador Soeratmin and Minister Counsellor Kasim can be sued and held liable in their private capacities for tortuous acts done with malice and bad faith. The trial court denied herein petitioners Motion to Dismiss. It likewise denied the Motion for Reconsideration subsequently filed. The trial courts denial of the Motion to Dismiss was brought up to the Court of Appeals by herein petitioners in a petition for certiorari and prohibition. The said petition alleged that the trial court gravely abused its discretion in ruling that the Republic of Indonesia gave its consent to be sued and voluntarily submitted itself to the laws and jurisdiction of Philippine courts and that petitioners Ambassador Soeratmin and Minister Counsellor Kasim waived their immunity from suit. Issues: (1) Whether or not the Court of Appeals erred in sustaining the trial courts decision that petitioners have waived their immunity from suit by using as its basis the abovementioned provision in the Maintenance Agreement. RULING: The petition is impressed with merit. International law is founded largely upon the principles of reciprocity, comity, independence, and equality of States which were adopted as part of the law of our land under Article II, Section 2 of the 1987 Constitution. The rule that a State may not be sued without its consent is a necessary consequence of the principles of independence and equality of States. Annunciated in Sanders v. Veridiano II, the practical justification for the doctrine of sovereign immunity is that there can be no legal right against the authority that makes the law on which the right depends. In the case of foreign States, the rule is derived from the principle of the sovereign equality of States, as expressed in the maxim par in parem non habet imperium. All states are sovereign equals and cannot assert jurisdiction over one another. A contrary attitude would unduly vex the peace of nations. The rules of International Law, however, are neither unyielding nor impervious to change. The increasing need of sovereign States to enter into purely commercial activities remotely connected with the discharge of their governmental functions brought about a new concept of sovereign immunity. This concept, the restrictive theory, holds that the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii, but not with regard to private acts. In United States of America v. Ruiz, for instance, we held that the conduct of public bidding for the repair of a wharf at a United States Naval Station is an act jure imperii. On the other hand, we considered as an act jure gestionis the hiring of a cook in there creation center catering to American servicemen and

the general public at the John Hay Air Station in Baguio City, as well as the bidding for the operation of barber shops in Clark Air Base in Angeles City. The petition is hereby GRANTED. The decision and resolution of the Court of Appeals in CA G.R. SP No. 66894 are REVERSED and SET ASIDE and the complaint in Civil Case No. 18203 against petitioners is DISMISSED.