Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 104269 November 11, 1993

DEPARTMENT OF AGRICULTURE, petitioner,

vs.
THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.

Roy Lago Salcedo for private respondents.

VITUG, J.:

For consideration are the incidents that flow from the familiar doctrine of non-suability of the state.

In this petition for certiorari, the Department of Agriculture seeks to nullify the Resolution, 1 dated 27 November 1991, of
the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro City, denying the petition for
injunction, prohibition and mandamus that prays to enjoin permanently the NLRC's Regional Arbitration Branch X and
Cagayan de Oro City Sheriff from enforcing the decision 2 of 31 May 1991 of the Executive Labor Arbiter and from
attaching and executing on petitioner's property.

The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into a contract 3 on 01 April 1989
for security services to be provided by the latter to the said governmental entity. Save for the increase in the monthly rate
of the guards, the same terms and conditions were also made to apply to another contract, dated 01 May 1990, between
the same parties. Pursuant to their arrangements, guards were deployed by Sultan Agency in the various premises of the
petitioner.

On 13 September 1990, several 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, 4 before the Regional Arbitration Branch X of Cagayan de Oro City, docketed as NLRC Case No. 10-09-00455-
90 (or 10-10-00519-90, its original docket number), against the Department of Agriculture and Sultan Security Agency.

The Executive Labor Arbiter rendered a decision on 31 May finding herein petitioner and jointly and severally liable with
Sultan Security Agency for the payment of money claims, aggregating P266,483.91, of the complainant security guards.
The petitioner and Sultan Security Agency did not appeal the decision of the Labor Arbiter. Thus, the decision became
final and executory.

On 18 July 1991, the Labor Arbiter issued a writ of execution. 5 commanding the City Sheriff to enforce and execute the
judgment against the property of the two respondents. Forthwith, or on 19 July 1991, the City Sheriff levied on execution
the motor vehicles of the petitioner, i.e. one (1) unit Toyota Hi-Ace, one (1) unit Toyota Mini Cruiser, and one (1) unit
Toyota Crown. 6 These units were put under the custody of Zacharias Roa, the property custodian of the petitioner,
pending their sale at public auction or the final settlement of the case, whichever would come first.

A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of injunction was filed by the
petitioner with the National Labor Relations Commission (NLRC), Cagayan de Oro, alleging, inter alia, that the writ
issued was effected without the Labor Arbiter having duly acquired jurisdiction over the petitioner, and that, therefore, the
decision of the Labor Arbiter was null and void and all actions pursuant thereto should be deemed equally invalid and of
no legal, effect. The petitioner also pointed out that the attachment or seizure of its property would hamper and jeopardize
petitioner's governmental functions to the prejudice of the public good.

On 27 November 1991, the NLRC promulgated its assailed resolution; viz:

WHEREFORE, premises considered, the following orders are issued:

1. The enforcement and execution of the judgments against petitioner in NLRC RABX Cases Nos. 10-10-00455-90;
10-10-0481-90 and 10-10-00519-90 are temporarily suspended for a period of two (2) months, more or less, but not
extending beyond the last quarter of calendar year 1991 to enable petitioner to source and raise funds to satisfy the
judgment awards against it;

2. Meantime, petitioner is ordered and directed to source for funds within the period above-stated and to deposit the
sums of money equivalent to the aggregate amount. it has been adjudged to pay jointly and severally with respondent
Sultan Security Agency with the Regional Arbitration Branch X, Cagayan de Oro City within the same period for proper
dispositions;

3. In order to ensure compliance with this order, petitioner is likewise directed to put up and post sufficient surety
and supersedeas bond equivalent to at least to fifty (50%) percent of the total monetary award issued by a reputable
bonding company duly accredited by the Supreme Court or by the Regional Trial Court of Misamis Oriental to answer for
the satisfaction of the money claims in case of failure or default on the part of petitioner to satisfy the money claims;

4. The City Sheriff is ordered to immediately release the properties of petitioner levied on execution within ten (10)
days from notice of the posting of sufficient surety or supersedeas bond as specified above. In the meanwhile, petitioner is
assessed to pay the costs and/or expenses incurred by the City Sheriff, if any, in connection with the execution of the
judgments in the above-stated cases upon presentation of the appropriate claims or vouchers and receipts by the city
Sheriff, subject to the conditions specified in the NLRC Sheriff, subject to the conditions specified in the NLRC Manual
of Instructions for Sheriffs;

5. The right of any of the judgment debtors to claim reimbursement against each other for any payments made in
connection with the satisfaction of the judgments herein is hereby recognized pursuant to the ruling in the Eagle Security
case, (supra). In case of dispute between the judgment debtors, the Executive Labor Arbiter of the Branch of origin may
upon proper petition by any of the parties conduct arbitration proceedings for the purpose and thereby render his decision
after due notice and hearings;

7. Finally, the petition for injunction is Dismissed 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, conditioned upon the posting of a surety or supersedeas
bond by petitioner within ten (10) days from notice pursuant to paragraph 3 of this disposition. The motion to admit the
complaint in intervention is Denied for lack of merit while the motion to dismiss the petition filed by Duty Sheriff is
Noted

SO ORDERED.

In this petition for certiorari, the petitioner charges the NLRC with grave abuse of discretion for refusing to quash the writ
of execution. The petitioner faults the NLRC for assuming jurisdiction over a money claim against the Department,
which, it claims, falls under the exclusive jurisdiction of the Commission on Audit. More importantly, the petitioner
asserts, the NLRC has disregarded the cardinal rule on the non-suability 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.

The basic postulate enshrined in the constitution that "(t)he State may not be sued without its consent," 7 reflects nothing
less than a recognition of the sovereign character of the State and an express affirmation of the unwritten rule effectively
insulating it from the jurisdiction of courts. 8 It is based on the very essence of sovereignty. As has been aptly observed,
by Justice 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. 9 True, the doctrine, not too infrequently, is derisively called "the royal prerogative of dishonesty" because it
grants the state the prerogative to defeat any legitimate claim against it by simply invoking its non-suability. 10 We have
had occasion, to explain in its defense, however, that a continued adherence to the doctrine of non-suability cannot be
deplored, for the loss of governmental efficiency and the obstacle to the performance of its multifarious functions would
be far greater in severity than the inconvenience that may be caused private parties, if such fundamental principle is to be
abandoned and the availability of judicial remedy is not to be accordingly restricted. 11

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 at times be sued. 12 The States' consent may be given expressly or impliedly. Express
consent may be made through a general law 13 or a special law. 14 In this jurisdiction, the general law waiving the
immunity of the state from suit is found in Act No. 3083, where the Philippine government "consents and submits to be
sued upon any money claims involving liability arising from contract, express or implied, which could serve as a basis of
civil action between private parties." 15 Implied consent, on the other hand, is conceded when the State itself commences
litigation, thus opening itself to a counterclaim 16 or when it enters into a contract. 17 In this situation, the government is
deemed to have descended to the level of the other contracting party and to have divested itself of its sovereign immunity.
This rule, relied upon by the NLRC and the private respondents, is not, however, without qualification. Not all contracts
entered into by the government operate as a waiver of its non-suability; distinction must still be made between one which
is executed in the exercise of its sovereign function and another which is done in its proprietary capacity. 18

In the Unites States of America vs. Ruiz, 19 where the questioned transaction dealt with improvements on the wharves in
the naval installation at Subic Bay, we held:

The traditional rule of immunity exempts a State from being sued in the courts of another State without its consent or
waiver. This rule is a necessary consequence of the principles of independence and equality of States. However, the rules
of International Law are not petrified; they are constantly developing and evolving. And because the activities of states
have multiplied, it has been necessary to distinguish them — between sovereign and governmental acts ( jure imperii) and
private, commercial and proprietary act ( jure gestionisis). The result is that State immunity now extends only to acts jure
imperii. The restrictive application of State immunity is now the rule in the United States, the United Kingdom and other
states in Western Europe.

xxx xxx xxx

The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of
the foreign sovereign, its commercial activities or economic affairs. Stated differently, a state may be said to have
descended to the level of an individual and can this be deemed to have actually given its consent to be sued only when it
enters into business contracts. It does not apply where the contracts relates to the exercise of its sovereign functions. In
this case the projects are an integral part of the naval base which is devoted to the defense of both the United States and
the Philippines, indisputably a function of the government of the highest order; they are not utilized for not dedicated to
commercial or business purposes.

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

But, be that as it may, the claims of private respondents, i.e. for underpayment of wages, holiday pay, overtime pay and
similar other items, arising from the Contract for Service, clearly constitute money claims. Act No. 3083, aforecited, gives
the consent of the State to be "sued upon any moneyed claim involving liability arising from contract, express or implied,
. . . Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by Presidential Decree ("P.D.") No. 1145,
the money claim first be brought to the Commission on Audit. Thus, in Carabao, Inc., vs. Agricultural Productivity
Commission, 20 we ruled:

(C)laimants have to prosecute their money claims against the Government under Commonwealth Act 327, stating that Act
3083 stands now merely as the general law waiving the State's immunity from suit, subject to the general limitation
expressed in Section 7 thereof that "no execution shall issue upon any judgment rendered by any Court against the
Government of the (Philippines), and that the conditions provided in Commonwealth Act 327 for filing money claims
against the Government must be strictly observed."

We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327 and the Labor Code with
respect to money claims against the State. The Labor code, in relation to Act No. 3083, provides the legal basis for the
State liability but the prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the rules
and procedures laid down in C.A. No. 327, as amended by P.D. 1445.

When the state gives its consent to be sued, it does thereby necessarily consent to unrestrained execution against it. tersely
put, when the State waives its immunity, all it does, in effect, is to give the other party an opportunity to prove, if it can,
that the State has a liability. 21 In Republic vs. Villasor 22 this Court, in nullifying the issuance of an alias writ of
execution directed against the funds of the Armed Forces of the Philippines to satisfy a final and executory judgment, has
explained, thus —

The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it
may limit the claimant's action "only up to the completion of proceedings anterior to the stage of execution" and that the
power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under
writs or execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the correspondent appropriation as required by law. The functions and
public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from
their legitimate and specific objects, as appropriated by law. 23

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.

SO ORDERED.

Feliciano, Bidin, Romero and Melo, JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-11154 March 21, 1916

E. MERRITT, plaintiff-appellant,
vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.

Crossfield and O'Brien for plaintiff.

Attorney-General Avanceña for defendant..

TRENT, J.:

This is an appeal by both parties from a judgment of the Court of First Instance of the city of Manila in favor of the
plaintiff for the sum of P14,741, together with the costs of the cause.

Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages which the plaintiff suffered to
P5,000, instead of P25,000 as claimed in the complaint," and (2) "in limiting the time when plaintiff was entirely disabled
to two months and twenty-one days and fixing the damage accordingly in the sum of P2,666, instead of P6,000 as claimed
by plaintiff in his complaint."

The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding that the collision between
the plaintiff's motorcycle and the ambulance of the General Hospital was due to the negligence of the chauffeur; (b) in
holding that the Government of the Philippine Islands is liable for the damages sustained by the plaintiff as a result of the
collision, even if it be true that the collision was due to the negligence of the chauffeur; and (c) in rendering judgment
against the defendant for the sum of P14,741.

The trial court's findings of fact, which are fully supported by the record, are as follows:

It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a motorcycle, was going toward the
western part of Calle Padre Faura, passing along the west side thereof at a speed of ten to twelve miles an hour, upon
crossing Taft Avenue and when he was ten feet from the southwestern intersection of said streets, the General Hospital
ambulance, upon reaching said avenue, instead of turning toward the south, after passing the center thereof, so that it
would be on the left side of said avenue, as is prescribed by the ordinance and the Motor Vehicle Act, turned suddenly and
unexpectedly and long before reaching the center of the street, into the right side of Taft Avenue, without having sounded
any whistle or horn, by which movement it struck the plaintiff, who was already six feet from the southwestern point or
from the post place there.

By reason of the resulting collision, the plaintiff was so severely injured that, according to Dr. Saleeby, who examined
him on the very same day that he was taken to the General Hospital, he was suffering from a depression in the left parietal
region, a would 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 was had suffered
material injury. At ten o'clock of the night in question, which was the time set for performing the operation, his pulse was
so weak and so irregular that, in his opinion, there was little hope that he would live. His right leg was broken in such a
way that the fracture extended to the outer skin in such manner that it might be regarded as double and the would be
exposed to infection, for which reason it was of the most serious nature.

At another examination six days before the day of the trial, Dr. Saleeby noticed that the plaintiff's 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 patient apparently
was slightly deaf, had a light weakness in his eyes and in his mental condition. This latter weakness was always noticed
when the plaintiff had to do any difficult mental labor, especially when he attempted to use his money for mathematical
calculations.

According to the various merchants who testified as witnesses, the plaintiff's mental and physical condition prior to the
accident was excellent, and that after having received the injuries that have been discussed, his physical condition had
undergone a noticeable depreciation, for he had lost the agility, energy, and ability that he had constantly displayed before
the accident as one of the best constructors of wooden buildings and he could not now earn even a half of the income that
he had secured for his work because he had lost 50 per cent of his efficiency. As a contractor, he could no longer, as he
had before done, climb up ladders and scaffoldings to reach the highest parts of the building.

As a consequence of the loss the plaintiff suffered in the efficiency of his work as a contractor, he had to dissolved the
partnership he had formed with the engineer. Wilson, because he was incapacitated from making mathematical
calculations on account of the condition of his leg and of his mental faculties, and he had to give up a contract he had for
the construction of the Uy Chaco building."

We may say at the outset that we are in full accord with the trial court to the effect that the collision between the plaintiff's
motorcycle and the ambulance of the General Hospital was due solely to the negligence of the chauffeur.

The two items which constitute a part of the P14,741 and which are drawn in question by the plaintiff are (a) P5,000, the
award awarded for permanent injuries, and (b) the P2,666, the amount allowed for the loss of wages during the time the
plaintiff was incapacitated from pursuing his occupation. We find nothing in the record which would justify us in
increasing the amount of the first. As to the second, the record shows, and the trial court so found, that the plaintiff's
services as a contractor were worth P1,000 per month. The court, however, limited the time to two months and twenty-one
days, which the plaintiff was actually confined in the hospital. In this we think there was error, because it was clearly
established that the plaintiff was wholly incapacitated for a period of six months. The mere fact that he remained in the
hospital only two months and twenty-one days while the remainder of the six months was spent in his home, would not
prevent recovery for the whole time. We, therefore, find that the amount of damages sustained by the plaintiff, without
any fault on his part, is P18,075.

As the negligence which caused 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.

Act No. 2457, effective February 3, 1915, reads:

An Act authorizing E. Merritt to bring suit against the Government of the Philippine Islands and authorizing the Attorney-
General of said Islands to appear in said suit.
Whereas a claim has been filed against the Government of the Philippine Islands by Mr. E. Merritt, of Manila, for
damages resulting from a collision between his motorcycle and the ambulance of the General Hospital on March twenty-
fifth, nineteen hundred and thirteen;

Whereas it is not known who is responsible for the accident nor is it possible to determine the amount of damages, if any,
to which the claimant is entitled; and

Whereas the Director of Public Works and the Attorney-General recommended that an Act be passed by the Legislature
authorizing Mr. E. Merritt to bring suit in the courts against the Government, in order that said questions may be decided:
Now, therefore,

By authority of the United States, be it enacted by the Philippine Legislature, that:

SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of the city of Manila against the
Government of the Philippine Islands in order to fix the responsibility for the collision between his motorcycle and the
ambulance of the General Hospital, and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled
on account of said collision, and the Attorney-General of the Philippine Islands is hereby authorized and directed to
appear at the trial on the behalf of the Government of said Islands, to defendant said Government at the same.

SEC. 2. This Act shall take effect on its passage.

Enacted, February 3, 1915.

Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it also concede its
liability to the plaintiff? If only the former, then it cannot be held that the Act created any new cause of action in favor of
the plaintiff or extended the defendant's liability to any case not previously recognized.

All admit that the Insular Government (the defendant) cannot be sued by an individual without its consent. It is also
admitted that the instant case is one against the Government. As the consent of the Government to be sued by the plaintiff
was entirely voluntary on its part, it is our duty to look carefully into the terms of the consent, and render judgment
accordingly.

The plaintiff was authorized to bring this action against the Government "in order to fix the responsibility for the collision
between his motorcycle and the ambulance of the General Hospital and to determine the amount of the damages, if any, to
which Mr. E. Merritt is entitled on account of said collision, . . . ." These were the two questions submitted to the court for
determination. The Act was passed "in order that said questions may be decided." We have "decided" that the accident
was due solely to the negligence of the chauffeur, who was at the time an employee of the defendant, and we have also
fixed the amount of damages sustained by the plaintiff as a result of the collision. Does the Act authorize us to hold that
the Government is legally liable for that amount? If not, we must look elsewhere for such authority, if it exists.

The Government of the Philippine Islands having been "modeled after the Federal and State Governments in the United
States," we may look to the decisions of the high courts of that country for aid in determining the purpose and scope of
Act No. 2457.

In the United States the rule that the state is not liable for the torts committed by its officers or agents whom it employs,
except when expressly made so by legislative enactment, is well settled. "The Government," says Justice Story, "does not
undertake to guarantee to any person the fidelity of the officers or agents whom it employs, since that would involve it in
all its operations in endless embarrassments, difficulties and losses, which would be subversive of the public interest."
(Claussen vs. City of Luverne, 103 Minn., 491, citing U. S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and Beers vs.
States, 20 How., 527; 15 L. Ed., 991.)

In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from the state for personal injuries
received on account of the negligence of the state officers at the state fair, a state institution created by the legislature for
the purpose of improving agricultural and kindred industries; to disseminate information calculated to educate and benefit
the industrial classes; and to advance by such means the material interests of the state, being objects similar to those
sought by the public school system. In passing upon the question of the state's liability for the negligent acts of its officers
or agents, the court said:

No claim arises against any government is favor of an individual, by reason of the misfeasance, laches, or unauthorized
exercise of powers by its officers or agents. (Citing Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86 N. C., 51, 53;
41 Am. Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Green vs. State, 73 Cal., 29; Bourn vs. Hart,
93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency, sec. 319.)

As to the scope of legislative enactments permitting individuals to sue the state where the cause of action arises out of
either fort or contract, the rule is stated in 36 Cyc., 915, thus:

By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its liability to plaintiff,
or create any cause of action in his favor, or extend its liability to any cause not previously recognized. It merely gives a
remedy to enforce a preexisting liability and submits itself to the jurisdiction of the court, subject to its right to interpose
any lawful defense.

In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of 1913, which authorized the
bringing of this suit, read:

SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit, Waukesha County, Wisconsin,
to bring suit in such court or courts and in such form or forms as he may be advised for the purpose of settling and
determining all controversies which he may now have with the State of Wisconsin, or its duly authorized officers and
agents, relative to the mill property of said George Apfelbacher, the fish hatchery of the State of Wisconsin on the Bark
River, and the mill property of Evan Humphrey at the lower end of Nagawicka Lake, and relative to the use of the waters
of said Bark River and Nagawicka Lake, all in the county of Waukesha, Wisconsin.

In determining the scope of this act, the court said:

Plaintiff claims that by the enactment of this law the legislature admitted liability on the part of the state for the acts of its
officers, and that the suit now stands just as it would stand between private parties. It is difficult to see how the act does,
or was intended to do, more than remove the state's immunity from suit. It simply gives authority to commence suit for the
purpose of settling plaintiff's controversies with the estate. Nowhere in the act is there a whisper or suggestion that the
court or courts in the disposition of the suit shall depart from well established principles of law, or that the amount of
damages is the only question to be settled. The act opened the door of the court to the plaintiff. It did not pass upon the
question of liability, but left the suit just where it would be in the absence of the state's immunity from suit. If the
Legislature had intended to change the rule that obtained in this state so long and to declare liability on the part of the
state, it would not have left so important a matter to mere inference, but would have done so in express terms. (Murdock
Grate Co. vs. Commonwealth, 152 Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)
In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and considered, are as follows:

All persons who have, or shall hereafter have, claims on contract or for negligence against the state not allowed by the
state board of examiners, are hereby authorized, on the terms and conditions herein contained, to bring suit thereon against
the state in any of the courts of this state of competent jurisdiction, and prosecute the same to final judgment. The rules of
practice in civil cases shall apply to such suits, except as herein otherwise provided.

And the court said:

This statute has been considered by this court in at least two cases, arising under different facts, and in both it was held
that said statute did not create any liability or cause of action against the state where none existed before, but merely gave
an additional remedy to enforce such liability as would have existed if the statute had not been enacted. (Chapman vs.
State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs. State, 121 Cal., 16.)

A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims against the
commonwealth, whether at law or in equity," with an exception not necessary to be here mentioned. In construing this
statute the court, in Murdock Grate Co. vs. Commonwealth (152 Mass., 28), said:

The statute we are discussing disclose no intention to create against the state a new and heretofore unrecognized class of
liabilities, but only an intention to provide a judicial tribunal where well recognized existing liabilities can be adjudicated.

In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the statute of New York,
jurisdiction of claims for damages for injuries in the management of the canals such as the plaintiff had sustained, Chief
Justice Ruger remarks: "It must be conceded that the state can be made liable for injuries arising from the negligence of its
agents or servants, only by force of some positive statute assuming such liability."

It being quite clear that Act No. 2457 does not operate to extend the Government's liability to any cause not previously
recognized, we will now examine the substantive law touching the defendant's liability for the negligent acts of its
officers, agents, and employees. Paragraph 5 of article 1903 of the Civil Code reads:

The state is liable in this sense when it acts through a special agent, but not when the damage should have been caused by
the official to whom properly it pertained to do the act performed, in which case the provisions of the preceding article
shall be applicable.

The supreme court of Spain in defining the scope of this paragraph said:

That the obligation to indemnify for damages which a third person causes to another by his fault or negligence is based, as
is evidenced by the same Law 3, Title 15, Partida 7, on that the person obligated, by his own fault or negligence, takes
part in the act or omission of the third party who caused the damage. It follows therefrom that the state, by virtue of such
provisions of law, is not responsible for the damages suffered by private individuals in consequence of acts performed by
its employees in the discharge of the functions pertaining to their office, because neither fault nor even negligence can be
presumed on the part of the state in the organization of branches of public service and in the appointment of its agents; on
the contrary, we must presuppose all foresight humanly possible on its part in order that each branch of service serves the
general weal an that of private persons interested in its operation. Between these latter and the state, therefore, no relations
of a private nature governed by the civil law can arise except in a case where the state acts as a judicial person capable of
acquiring rights and contracting obligations. (Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)
That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out of fault or negligence; and
whereas in the first article thereof. No. 1902, where the general principle is laid down that where a person who by an act
or omission causes damage to another through fault or negligence, shall be obliged to repair the damage so done,
reference is made to acts or omissions of the persons who directly or indirectly cause the damage, the following articles
refers to this persons and imposes an identical obligation upon those who maintain fixed relations of authority and
superiority over the authors of the damage, because the law presumes that in consequence of such relations the evil caused
by their own fault or negligence is imputable to them. This legal presumption gives way to proof, however, because, as
held in the last paragraph of article 1903, responsibility for acts of third persons ceases when the persons mentioned in
said article prove that they employed all the diligence of a good father of a family to avoid the damage, and among these
persons, called upon to answer in a direct and not a subsidiary manner, are found, in addition to the mother or the father in
a proper case, guardians and owners or directors of an establishment or enterprise, the state, but not always, except when
it acts through the agency of a special agent, doubtless because and only in this case, the fault or negligence, which is the
original basis of this kind of objections, must be presumed to lie with the state.

That although in some cases the state might by virtue of the general principle set forth in article 1902 respond for all the
damage that is occasioned to private parties by orders or resolutions which by fault or negligence are made by branches of
the central administration acting in the name and representation of the state itself and as an external expression of its
sovereignty in the exercise of its executive powers, yet said article is not applicable in the case of damages said to have
been occasioned to the petitioners by an executive official, acting in the exercise of his powers, in proceedings to enforce
the collections of certain property taxes owing by the owner of the property which they hold in sublease.

That the responsibility of the state is limited by article 1903 to the case wherein it acts through a special agent (and a
special agent, in the sense in which these words are employed, is one who receives a definite and fixed order or
commission, foreign to the exercise of the duties of his office if he is a special official) so that in representation of the
state and being bound to act as an agent thereof, he executes the trust confided to him. This concept does not apply to any
executive agent who is an employee of the acting administration and who on his own responsibility performs the functions
which are inherent in and naturally pertain to his office and which are regulated by law and the regulations." (Supreme
Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)

That according to paragraph 5 of article 1903 of the Civil Code and the principle laid down in a decision, among others, of
the 18th of May, 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. (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)

It is, therefore, evidence that the State (the Government of the Philippine Islands) 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, by legislative enactment and by appropriating sufficient
funds therefor, we are not called upon to determine. This matter rests solely with the Legislature and not with the courts.
 REPUBLIC v PURISIMA

FACTS:
A motion to dismiss was filed on September 7, 1972 by defendant Rice and Corn Administration in a pending civil suit in
the sala of respondent Judge for the collection of a money claim arising from an alleged breach of contract, the plaintiff
being private respondent Yellow Ball Freight Lines, Inc. At that time, the leading case of Mobil Philippines Exploration,
Inc. v. Customs Arrastre Service, where Justice Bengzon stressed the lack of jurisdiction of a court to pass on the merits
of a claim against any office or entity acting as part of the machinery of the national government unless consent be shown,
had been applied in 53 other decisions. Respondent Judge Amante P. Purisima of the Court of First Instance of Manila
denied the motion to dismiss dated October 4, 1972. Hence, the petition for certiorari and prohibition.

ISSUE:
Whether the respondent’s decision is valid.

RULING:
No. The position of the Republic has been fortified with the explicit affirmation found in this provision of the present
Constitution: “The State may not be sued without its consent.

The doctrine of non-suability recognized in this jurisdiction even prior to the effectivity of the [1935] Constitution is a
logical corollary of the positivist concept of law which, to para-phrase Holmes, negates the assertion of any legal right as
against the state, in itself the source of the law on which such a right may be predicated. Nor is this all, even if such a
principle does give rise to problems, considering the vastly expanded role of government enabling it to engage in business
pursuits to promote the general welfare, it is not obeisance to the analytical school of thought alone that calls for its
continued applicability. Nor is injustice thereby cause private parties. They could still proceed to seek collection of their
money claims by pursuing the statutory remedy of having the Auditor General pass upon them subject to appeal to judicial
tribunals for final adjudication. We could thus correctly conclude as we did in the cited Providence Washington Insurance
decision: “Thus the doctrine of non-suability of the government without its consent, as it has operated in practice, hardly
lends itself to the charge that it could be the fruitful parent of injustice, considering the vast and ever-widening scope of
state activities at present being undertaken. Whatever difficulties for private claimants may still exist, is, from an objective
appraisal of all factors, minimal. In the balancing of interests, so unavoidable in the determination of what principles must
prevail if government is to satisfy the public weal, the verdict must be, as it has been these so many years, for its
continuing recognition as a fundamental postulate of constitutional law.

The consent, to be effective, must come from the State acting through a duly enacted statute as pointed out by Justice
Bengzon in Mobil. Thus, whatever counsel for defendant Rice and Corn Administration agreed to have no binding force
on the government.