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EN BANC

[G.R. No. L-4699. November 26, 1952.]

TEODORA SANTOS, assisted by her husband Donato de Castro, JOSEFINA SANTOS,


assisted by her husband Santiago Rodriguez and EMILIANA SANTOS, plaintiffs-
appellants, vs. LEONCIO SANTOS, THE ADMINISTRATOR OF THE CIVIL AERONAUTICS
ADMINISTRATION, and NATIONAL AIRPORTS CORPORATION, defendants-appellees.

Ramon Diokno and Jose W. Diokno for appellants.


Solicitor General Pompeyo Diaz and Solicitor Esmeraldo Umali for appellees.

SYLLABUS

1. CONSTITUTIONAL LAW; OBLIGATIONS AND CONTRACTS; ACTIONS AGAINST THE STATE.


— Where the state or its government enters into a contract, through its officers or agents, in furtherance of a
legitimate aim and purpose and pursuant to constitutional legislative authority, whereby mutual or reciprocal
benefits accrue and rights and obligations arise therefrom, and if the law granting the authority to enter into
such contract does not provide for or name the officer against whom such action may be brought in the event
of a breach thereof, the state itself may be sued even without its consent, because by entering into a contract
the sovereign state has descended to the level of the citizen and its consent to be sued is implied from the very
act of entering into such contract.

DECISION

PADILLA, J p:

Teodora Santos and her nieces Emiliana and Josefina surnamed Santos complain that from 1945 to
1949 Leoncio Santos collected from the Army of the United States of America rentals for the use and
occupation of a parcel of land, known as Lot No. 4 of CAA Survey Plan AERO R-1, containing an area of
21,577 square meters, situated in the municipality of Las Piñas, province of Rizal, more particularly described
in the complaint, belonging to them and Leoncio Santos in common by inheritance from their ancestor, the
late Paulino de los Santos, father of Teodora Santos and Leoncio Santos and grandfather of
Josefina Santos and Emiliana Santos, who died sometime in 1919, in the proportion of 1/7 undivided share
for Teodora Santos and 1/14 undivided share each for Josefina Santos and Emiliana Santos and 5/7
undivided share for Leoncio Santos, for the accounting of which and payment of their respective shares
therein they made a demand upon Leoncio Santos but the latter failed and refused to do so. They also
complain that they made a demand upon Leoncio Santos to have the lot partitioned among them but the latter
refused to do so, he having sold the lot to the Administrator of the Civil Aeronautics Administration on or about
13 May 1949, who is now in possession thereof; and that the sale of the lot made by Leoncio Santos to the
Administrator of the Civil Aeronautics Administration insofar as their shares in the lot are concerned is null
and void. Upon these allegations they pray that Leoncio Santos be ordered to render an accounting of the
rentals and such other fruits, products and benefits as he might have received from 1945 on and thereafter
and to pay and deliver 1/7 thereof to Teodora Santos and 1/14 thereof each to Josefina and Emiliana
surnamed Santos; that the parcel of land be partitioned among them in the proportion above stated; that the
purported sale by Leoncio Santos to the National Airports Corporation, the predecessor of the Civil
Aeronautics Administration, insofar as their shares are concerned be declared null and void; that the
Administrator of the Civil Aeronautics Administration be directed to vacate the portions of the lot belonging to
them, to pay them a reasonable rental until after possession of their shares in the lot shall have been restored
to them and to pay damages and costs.

The Administrator of the Civil Aeronautics Administration moved to dismiss the complaint for lack of
jurisdiction and insufficiency of the complaint against him, invoking the case of Metropolitan Transportation
Service METRAN vs. Paredes, 45 Off. Gaz., 2835, where it has been held that the suit was against the state
which could not be brought without its consent. This motion was granted on the ground that the Civil
Aeronautics Administration not being a juridical person has no capacity to sue and be sued and for that
reason it cannot come under the jurisdiction of the court.
The principle that the state or its government cannot be sued without its consent has its root in the
juridical and practical notion that the state can do no wrong. Demandable and enforceable obligations which
may be the subject of judicial action come into being either by law, contract, quasi-contract, acts or omissions
punishable by law, acts which do not constitute or amount to a crime or a misdemeanor known at common
law as torts and in civil law as culpa aquiliana or extra contractual. An obligation or liability of the state created
by statute is enforceable against the officer or agent charged with the duty to execute the law. If there should
be anything demandable which had been paid or delivered to or collected by officers or agents of the state
without the authority of law, the action would not be against the state but against the responsible officers or
agents who received what was not due the state or made the unauthorized collection. Punishable acts or
omissions committed by officers or agents of the state are crimes and violations of law perpetrated by such
officers or agents and not by the state. The same postulate may be applied to torts committed by officers or
agents of the state. Nevertheless, if, where and when the state or its government enters into a contract,
through its officers or agents, in furtherance of a legitimate aim and purpose and pursuant to constitutional
legislative authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom,
and if the law granting the authority to enter into such contract does not provide for or name the officer against
whom action may be brought in the event of a breach thereof, the state itself may be sued even without its
consent, because by entering into a contract the sovereign state has descended to the level of the citizen and
its consent to be sued is implied from the very act of entering into such contract. If the dignity of the state, the
sacredness of the institution, the respect for the government are to be preserved and the dragging of its name
in a suit to be prevented, the legislative department should name the officer or agent against whom the action
may be brought in the event of breach of the contract entered into under its name and authority. And the
omission or failure of the legislative department to do so is no obstacle or impediment for an individual or
citizen, who is aggrieved by the breach of the contract, to bring an action against the state itself for the
reasons already adverted to, to wit: the descent of the sovereign state to the level of the individual or citizen
with whom it entered into a contract and its consent to be sued implied from the act of entering into such
contract.
The action brought in this case is for partition and accounting of rentals received by the defendant
Leoncio Santos from 1945 to December 1949 for the use and occupation of a parcel of land allegedly owned
in common by the plaintiffs and the defendant Leoncio Santos in the proportion stated in the complaint. It is
also averred that the National Airports Corporation created by Republic Act No. 224, which had acquired the
parcel of land from the defendant Leoncio Santos, was abolished by Executive Order No. 365, series of 1950,
and in its place and stead the Civil Aeronautics Administration was created and took over all the assets and
assumed all the liabilities of the abolished corporation. The Civil Aeronautics Administration, even if it is not a
juridical entity, cannot legally prevent a party or parties from enforcing their proprietary rights under the cloak
or shield of lack of juridical personality, because it took over all the powers and assumed all the obligations of
the defunct corporation which had entered into the contract in question. In National Airports Corporation vs.
Teodoro *, G.R. No. L-5122, 30 April 1952, we held that the Civil Aeronautics Administration may be sued and
that the principle of state immunity from suit does not apply to it.
If the plaintiffs are not entitled to any share in the parcel of land sold by Leoncio Santos and acquired
by the National Airports Corporation, now in possession of its successor, the Civil Aeronautics Administration,
the complaint would have to be dismissed. But if the right to such shares as claimed be established, the
plaintiffs should not and can not be deprived of their proprietary rights in the parcel of land sold by their co-
owner without their knowledge and consent. Leoncio Santos would be responsible for warranty and eviction to
the Civil Aeronautics Administration. If the Torrens title does not show such shares of the plaintiffs in the
parcel of land sold by Leoncio Santos to the National Airports Corporation, then the action would not lie
against the National Airports Corporation or its successor, the Civil Aeronautics Administration, but
Leoncio Santos would be responsible to his co-owners for the value of their shares in the parcel of land and of
their natural or civil fruits of which they had been deprived by the sale and conveyance of the whole parcel of
land to the National Airports Corporation by Leoncio Santos. The accounting of rentals received would not
affect the Civil Aeronautics Administration, because it would be the exclusive liability of Leoncio Santos.
The order appealed from dismissing the complaint as to the Civil Aeronautics Administration is
reversed and the case remanded to the lower court for further proceedings in accordance with law. No costs
shall be taxed.
Paras, C.J., Pablo, Bengzon, Tuason, Montemayor, Jugo, Bautista Angelo and Labrador, JJ., concur.

||| (Santos v. Santos, G.R. No. L-4699, [November 26, 1952], 92 PHIL 281-286)

FIRST DIVISION

[G.R. No. L-1232. January 12, 1948.]

METROPOLITAN TRANSPORTATION SERVICE (METRAN), petitioner, vs. JOSE


MA. PAREDES, VICENTE DE LA CRUZ and ARSENIO C. ROLDAN, Judges of Court of
Industrial Relations, and THE NATIONAL LABOR UNION, respondents.

Deogracias T. Reyes for petitioner.


Emilio Lopez for respondent judges, CIR.
Antonio Paguia and Baltazar M. Villanueva for National Labor Union.

SYLLABUS

1. PARTIES; WHO MAY BE PARTIES IN CIVIL ACTIONS. — Only natural or juridical persons may be
parties in a civil action.
2. ACTIONS; DEFINITION OF. — "Action" is defined by Rule 2, section 1, as "an ordinary suit in a court
of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention
or redness of a wrong."
3. COURTS, COURT OF INDUSTRIAL RELATIONS, A COURT OF JUSTICE. — The Court of
Industrial Relations is a court of justice within the meaning of Rule 2, section 1, of the Rules of Court.
4. ACTIONS; GOVERNMENT, SUIT AGAINST; SUIT AGAINST AGENCY OR OFFICE OF
GOVERNMENT; METROPOLITAN TRANSPORTATION SERVICE (METRAN) AS PARTY DEFENDANT. —
The Metropolitan Transportation Service (METRAN) is and was at the times covered by the petition in the Court
of Industrial Relations an office created by Executive Order No. 59 and operating under the direct supervision
and control of the Department of Public Works and Communications. Said office is not a corporation or any of
the juridical entities enumerated in article 35 of the Civil Code. Held: That any suit, action or proceeding against
it, if it were to produce any effect, would in practice be a suit, action or proceeding against the Government
itself, of which the said Metropolitan Transportation Service (Metran) is a mere office or agency. It is a well-
settled rule that the government cannot be sued without its consent (Merritt vs. Government of the Philippine
Islands, 34 Phil., 311) and here no consent of the government has been shown. This case is different from
those of the so-called government-owned corporations, such as the Philippine National Bank, National
Development Company, the Manila Hotel, etc., which have been duly incorporated under the corporation law
or special charters, one of whose powers is "to sue and be used in any court" (Corporation Law, section 13 [a].
It is not even a case governed by Act No. 3083 which specifies the instances where this government has given
its consent to be sued (Compañia General de Tobacos vs. Government of the Philippine Islands, 45 Phil., 663).
5. ID.; ID.; SUIT BY AGENCY OR OFFICE OF GOVERNMENT; METROPOLITAN
TRANSPORTATION SERVICE (METRAN) AS PARTY PLAINTIFF. — The instant proceedings should be
considered as having been instituted by the Government itself, since the Metropolitan Transportation Service
(Metran) is a mere office or agency of said government, unincorporated and not possessing juridical personality
under the law, incapable of not only being sued but suing (Rule 3, section 1). The very allegations, arguments
and contentions contained in the petition clearly show that to all intents and purposes said petition was being
presented in behalf of the Government as the real party in interest

DECISION

HILADO, J p:

Before the Court of Industrial Relations a petition was filed in case No. 36-V entitled "National Labor
Union, versus Metropolitan Transportation Service (Metran)," wherein petitioner alleged that it was a
legitimate labor organization, thirty of whose affiliated members were working and under the employ of the
respondent; that the respondent "is a semi-governmental transportation entity, popularly known as 'Metran,'
and after several other allegations concluded with the prayer that its nine demands at length set forth in said
petition be granted. In behalf of the so-called respondent an oral petition for dismissal of the case was made
before the court on October 22, 1946. " on the ground that the respondent belongs to the Republic of the
Philippines and as such, it can not be sued" (Order of C.I.R. of November 7, 1946, Annex C). By its aforesaid
order, the court denied the motion to dismiss, citing in support of such resolution a paragraph allegedly
quoted from an opinion of Justice Ozaeta speaking for the Supreme Court "in the case of the Manila Hotel," in
the words of the order.
In behalf of the instant so-called petitioner a motion for reconsideration of that order was filed (Annex
D) but it was denied by the Court of Industrial Relations by its resolution dated December 3, 1946 (Annex E).
On December 7, 1946, a notice of appeal (Annex F) was filed by counsel, and the case is now
submitted on appeal under the provisions of Rule 44.
It appears that the Metropolitan Transportation Service (Metran) is not a corporation nor any of the
juridical entities enumerated in article 35 of the Civil Code. Rule 3, section 1 provides:
"SECTION 1. Who may be parties. — Only natural or judicial persons may be parties in
a civil action."
"Action" is defined by Rule 2, section 1, as "an ordinary suit in a court of justice, by which
one party prosecutes another for the enforcement or protection of a right, or the prevention or
redress of a wrong." Considering that the very law of its creation (Commonwealth Act No. 103,
as amended), denominates the lower tribunal as a "court" (section 1), considering the powers
and duties conferred and imposed upon it (Chapter II), its incidental powers (Chapter III), the fact
that Chapter IV of said Act and Rule 44 of the Rules of Court provide for an appeal from an award,
order, or decision of the Court of Industrial Relations to the Supreme Court, unquestionably a
court of justice, and the fact that section 20 of said Commonwealth Act No. 103 confers upon the
Court of Industrial Relations the power to adopt its rules of procedure and "such other powers as
generally pertain to a court of justice" (italics supplied), and considering finally the importance in
the life and economy of the nation of the industrial relations which have thus been placed under
the jurisdiction of said Court of Industrial Relations, in the hearing and determination of which
cases thus submitted to it, said court administers justicebetween parties, we have no hesitation
in holding that it is a "court of justice" within the meaning of Rule 2, section 1.
In the case of Health vs. Steamer "San Nicolas" (7 Phil., 532), suit was brought H. L. Heath against
the Steamer "San Nicolas." "No natural or juridical person was named as defendant in the complaint,"
commented this Court. Mr. Justice Willard, speaking for the Court, stated the important question calling for
decision therein as follows:
"The important question discussed in the briefs in this court, and to be decided, is
whether such a proceeding as the one in question, directed against the ship itself, without naming
any natural or juridical person as defendant, can be maintained in these Islands." (Page 534 of
cited volume.)
The Court, in resolving said question, inter alia, declared:
"The first question to be considered is whether this action was properly brought against
the ship and whether an action can now be maintained when the only defendant named is neither
a natural nor juridical person. Under the law in force prior to 1898 there was no doubt upon this
subject. It was absolutely indispensable for the maintenance of a contentious action in the courts
of justice to have as defendant some natural or juridical person. A suit against a ship, such as is
permitted in the English and the American admiralty courts, was unknown to the Spanish law. It
is true that the Spanish Law of Civil Procedure contained certain provisions relating to voluntary
jurisdiction in matters of commerce, but none of these provisions had any application to a
contentious suit of this character.
"It being impossible to maintain an action of this character against a ship as the only
defendant prior to June, 1901, it follows that it such action can now be maintained it must be by
virtue of some provision found in the Code of Civil Procedure and which is the only new law now
in force relating to this matter. An examination of the provisions of that code will show that no
such action is authorized. It cannot, therefore, be now maintained and the demurrer of Borja
should have been sustained on that ground." (Pages 537-538 of cited volume.)
Under the foregoing doctrine, it is obvious that the Metropolitan Transportation Service (Metran) could
not be sued in the Court of Industrial Relations. A corollary of this is that no award, order or decision could be
rendered against it. If so, how could it be said that the Court of Industrial Relations had jurisdiction to take
cognizance of the case?
Moreover, there is another vital reason why the Court of Industrial Relations lacked jurisdiction to
entertain the petition, much less to grant the remedies therein prayed for. It is beyond dispute that the
Metropolitan Transportation Service (Metran) is and was at the times covered by the petition in the Court of
Industrial Relations an office created by Executive Order No. 59 and operating under the direct supervision
and control of the Department of Public Works and Communications. (Petition par. 1, admitted by respondent
judges' answer, par. 1 and by respondent Union's answer, par. 1.) The said office not being a juridical person,
any suit, action or proceeding against it, if it were to produce any effect, would in practice be a suit, action or
proceeding against the Government itself, of which the said Metropolitan Transportation Service (Metran) is a
mere office or agency. Any award, order or decision granting any of the Union's demands, if attempted to be
executed, would necessarily operate against the government which is really the entity rendering the services
and performing the activities in question through its office or agency called Metropolitan Transportation
Service (Metran). The case is different from those of the so-called government-owned corporations, such as
the Philippine National Bank. National Development Company, the Manila Hotel, etc., which have been duly
incorporated under our corporation law or special characters, as one of whose powers is "to sue and be sued
in any court" (Corporation Law, section 13 [a], and which actually engage in business; while in rendering the
services and performing the activities here involved the Government has never engaged in business nor
intends to do so. Now, it is a well-settled rule that the Government cannot be sued without its consent
(Merritt vs. Government of the Philippine Islands, 34 Phil., 311) and here no consent of the government has
been shown. This is not even a case governed by Act No. 3083 which specifies the instances where this
government has given its consent to be sued (Compañia General de Tabacos de Filipinas vs. Government of
the Philippine Islands, 45 Phil., 663. And the Manila Hotel case relied upon by the Court of Industrial
Relations in its order Annex C, is inapplicable for the reason that the Metropolitan Transportation Service
(Metran) is not a corporation, nor any other kind of judicial person for that matter. If the Metropolitan
Transportation Service (Metran) could not be sued and the Court of Industrial Relations could not render any
decision, judgment, award or order against it, all the proceedings had in said court were null and void. A case
very similar to the present was Salgado vs. Ramos (64 Phil., 724, 727), from which we quote the following
passage;
". . . Consequently, while the claim is actually made against the Director of Lands, it is
juridically against the Government of the Philippine Islands of which the Director of Lands is a
mere agent, in accordance with the provisions of article 1727 of the Civil Code."
On the other hand, the instant proceedings should be considered, as we treat it, as having been
instituted by the Government itself, since the Metropolitan Transportation Service (Metran) is a mere office or
agency of said government, unincorporated and not possessing juridical personality under the law, incapable
of not being sued but suing (Rule 3, section 1). The very allegations, arguments and contentions contained in
the petition clearly show that to all intents and purposes said petition was being presented in behalf of the
Government as the real party in interest. Rule 3, section 2, provides that every action must be prosecuted in
the name of the real party in interest. And giving effect to the spirit of liberality inspiring Rule 1, section 2, and
in order to avoid multiplicity of suits, we believe that this is a proper case for applying the principle that the
"the law considers that as done which ought to have been done." Parenthetically, however, we may say that
were we to be more rigorous with petitioner herein in this regard, we will have to be equally rigorous with
petitioner in the Court of Industrial Relations on the same score, with the practical result that any way the
proceedings before that court will have to be dismissed.
It would be sophistical to say that the suit or action against the said office or agency of the
government is not a suit or action against the government itself, upon the ground that the prohibition only
covers suits against the government as a whole. A commonplace illustration will, we think, demonstrate the
fallacy of such a theory: In order that it may be said that a man has been attacked by another, the latter does
not need to deliver blows or shower shots all over the body of the victim injuring each and every part thereof,
but if the blow or the shot is inflicted upon the arm or any other part of his body, we say that the victim was
attacked by the aggressor. The Bureau of Public Works under whose supervision the Metropolitan
Transportation Service (Metran) has been organized and functions is an integral part of the government, just
as the said office or agency. And apart from the consideration that neither said Bureau nor said office has any
juridical personality to be sued for reasons already set forth, any suit or action attempted against either will
necessarily be a suit or action against the government itself.
". . . Accordingly it is well settled, as a general proposition, that, where a suit is brought
against an officer or agency with relation to some matter in which defendant represents the state
in action and liability, and the state, while not a party to the record, is the real party against which
relief is sought so that a judgment for plaintiff, although nominally against the named defendant
as an individual or entity distinct from the state, will operate to control the action of the state or
subject it to liability, the suit is in effect one against the state and cannot be maintained without
its consent. Apparently for this rule to apply the relief asked must involved some direct or
substantial interest of the state, as a distinct entity, apart from the mere interest a state may have
in the welfare of its citizens or the vindication of its laws. Within the inhibition of the rule, however,
are suits wherein a state officer or agency is, or will be, required to use state property or funds in
order to afford the relief demanded . . ." (59 C. J., 307-309; italics supplied.)
In a republican state, like the Philippines, government immunity from suit without its consent is
derived from the will of the people themselves in freely creating a government "of the people, by the people,
and for the people" — a representative government through which they have agreed to exercise the powers
and discharge the duties of their sovereignty for the common good and general welfare. In so agreeing, the
citizens have solemnly undertaken to surrender some of their private rights and interest which were calculated
to conflict with the higher rights and larger interests of the people as a whole, represented by the government
thus established by them all. One of those "higher rights," based upon those "larger interests" is that
government immunity. The members of the respondent Labor Union themselves are part of the people who
have freely formed that government and participated in that solemn undertaking. In this sense — and a very
real one it is — they are in effect attempting to sue themselves along with the rest of the people represented
by their common government — an anomalous and absurd situation indeed.
The case is radically different from a dictatorship, or an aristocratic, oligarchical, autocratic, or
monarchical government, where any similar immunity will be the creature of the will of one man or of a
powerful few. The principle is further grounded upon the necessity of protecting the performance of
governmental and public functions from being harassed unduly or constantly interrupted by private suits. (See
also McClellan vs. State, 170, p. 662; 35 Cal. App., 605, 606.) Where the government is "of the people, by the
people, and for the people," such immunity from suit will only be the reaffirmation of the sovereignty of the
people," such immunity from suit will only be the reaffirmation of the sovereignty of the people themselves as
represented by their government in the face of the obvious impossibility of constituting the entire people into
one single body to exercise the powers and enjoy the immunities of that sovereignty.
Upon the whole, we are clearly of opinion that the proceedings had in the Court of Industrial Relations
and now subject of this appeal are null and void, particularly said court's order of November 1, 1946 (Annex
C) and the resolution of December 3, 1946 (Annex E), with the necessary consequence that the said court
should be, as it is hereby, enjoined from taking any further action in the case inconsistent with this decision.
No costs. So ordered.
Moran, C. J., Paras, Feria, Pablo, Bengson, Hontiveros, Padilla and Tuason, JJ., concur.

Separate Opinions
PERFECTO, J., dissenting:

The present case places before us for our consideration several questions of no mean importance.
Are the laborers of an office or agency of government to be discriminated against and deprived of the
essential rights recognized by the Constitution and the laws in laborers working in the service of private
persons or companies?
Have the laborers in the service of a government office or agency lost their fundamental right to air
grievances before the competent authorities?
Have such laborers, because they are serving an official agency, lost their human personality, to
become voiceless serfs or slaves or simple beasts of burden?
Is an office or agency of government a thing placed and should be placed above the law?
Can the government itself validly pretend to be above the law?
Within our democratic system of government, is it possible to recognize anything paramount to the
supremacy of the law?
Have we lost the democratic bearings of our national way of life, as to reject now the political
philosophy to defend which we fought in the last war, to be replaced by the totalitarian practices that
enthrones the powerful above all law?
On October 21, 1946, the National Labor Union, a worker's organization with more than thirty
affiliated members, working in the service of Metran, a government agency, filed with the Court of Industrial
Relations, a petition with the following prayer:
"The demands of the petitioning union are as follows:
"1. That the present unfair and unreasonable practices should be immediately
abolished:
"(a) The 'Grading System' and its resultant unjust suspension of personnel;
"(b) The capricious 'Rotation System' which is undemocratic and based upon
favoritism;
"(c) The continued recruitment and placement of new personnel when the METRAN is
already overmanned with its regular and substitute working force — a pernicious practice that
undermines the morale and affects gravely the efficiency and economic security of its laboring
constituents;
"(d) The economic lynching in the practice of cutting the earning hours of drivers and
conductors after the lapsing of thirty (30) minutes allowance given for the repairing of buses
and trucks, which troubles are duly reported to the management, and the dictatorial practice of
retaining without pay the personnel concerned in spite of the fact that repairs of said buses had
not been effected within said time allotment and immediately thereafter;
"(e) The confiscation of badges from personnel suspended without justifiable causes
and without first returning the corresponding deposits therefor;
"2. That the general deduction of Fifty Centavos (P0.50) from the wages and salaries of
personnel affected should be returned and paid is for from the date it was effectuated up to the
time this case is finally terminated;
"3. That one hundred per cent (100%) additional compensation over the regular wages
and salaries be paid to all workers and employees compelled to work during Sundays and legal
holidays;
"4. That long waiting beyond eight (8) hours of conductors for the reporting and
accounting of daily earnings of their respects buses be considered 'Overtime Work' and be paid
for;
"5. That all overtime work already rendered by all affected workers and the employees
should be paid;
"6. That all workers and employees, especially drivers and conductors of buses and
trucks, should have one day of rest in seven with pay;
"7. That permanent employees and workers, who have rendered at least six (6) months
service to the company, should be entitled to sick leave of two (2) weeks with pay;
"8. That workers and employees should have representation in the management, a
practice initiated by the government; and
"9. All workers and employees who were dismissed or suspended because of their
union activities should be reinstated."
On October 29, 1946, Metran filed a motion praying for the dismissal of the petition upon the
allegation that "the government cannot be sued without its consent."
On November 7, 1946, Associate Judge Vicente de la Cruz, denied the motion for dismissal and
ordered respondent to file his answer, the order being based on the opinion that the Court of Industrial
Relations has jurisdiction to hear and decide the case in accordance with section 4 ofCommonwealth Act No.
103. Said section is as follows:
"Strikes and lockouts. — The Court shall take cognizance for purposes of prevention,
arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to
cause a strike or lockout, arising from differences as regards wages, shares of compensation,
hours of labor or conditions of tenancy or employment, between employers and employees or
laborers and between landlords and tenants or farm-laborers, provided that the number of
employees, laborers or tenants or farm-laborers involved exceeds thirty, and such industrial or
agricultural dispute is submitted to the Court by the Secretary of Labor, or by any or both of the
parties of the controversy and certified by the Secretary of Labor as existing and proper to be
dealt with by the Court for the sake of public interest. In all such cases, the Secretary of Labor or
the party or parties submitting the disputes, shall clearly and specifically state in writing the
questions to be decided. Upon the submission of such a controversy or question by the Secretary
of Labor, his intervention therein as authorized by law, shall cease.
"The Court shall, before hearing the dispute and in the course of such hearing, endeavor
to reconcile the parties and induce them to settle the dispute by amicable agreement. It any
agreement as to the whole or any part of the dispute is arrived at by the parties, a memorandum
of its terms shall be made in writing, signed and acknowledged by the parties thereto before the
Judge of the Court or any official acting in his behalf and authorized to administer oaths or
acknowledgments, or, before a notary public. The memorandum shall be filed in the office of the
Clerk of the Court, and, unless otherwise ordered by the Court, shall, as between the parties to
the agreement, have the same effect as, and be deemed to be, a decision or award."
On November 11, 1946, petitioner moved for the reconsideration of the order and the motion was
denied in a resolution adopted on December 3, 1946, by Judges Jose Ma. Paredes, Presiding, Arsenio C.
Roldan and Vicente de la Cruz. The following pronouncements are made in the resolution:
"We believe, however, that irrespective of the question as to whether or not the
respondent is a company, corporation or is merely an entity, so long as it is engaged in business
and an industrial dispute exists between itself and more than 30 of its employees, laborers,
drivers and conductors, arising from differences as regards to wages, compensation, dismissals,
lay-offs, or suspension of employees or laborers, causing or likely to cause a strike or lockout,
this Court is fully authorized and has complete jurisdiction to decide said dispute.
"The mere fact that the Metran Branch of the National Labor Union in whose behalf the
petition was filed is still unregistered, does not deprive this Court of its right to exercise its
jurisdiction, as provided for by law.
"It cannot be denied that the Metran is in business. It cannot screen itself behind the
sovereign power of the state, from any legal claim which its employees or laborers or third parties
may have against it."
Metran appealed against the action of the Court of Industrial Relations, by filing the petition for
certiorari under our consideration.
The position of the Court of Industrial Relations is absolutely correct and, therefore, the petition
should be denied and so we vote. Petitioner alleges that Metran was organized "in order to provide the public
with means of transportation, more efficient, faster, and cheaper than those at present available" and it "will
also be in charge of the allocation of U.S. Army trucks and motor vehicles, accessories, spare parts and
supply of gasoline, oil and others to the different private transportation companies." It is an office "under the
supervision and control of the Secretary of Public Works and Communications," under Executive Order No.
59. It distributes free tickets to all employees of the government and provides the transportation needs of the
government. Executive Order No. 28, series of 1946, directed it to furnish modern transportation facilities to
all bureaus and offices of the national government.
In support of its theory, that it cannot be sued without its consent, Metran invokes the authorities
quoted in the following paragraphs of its petition:
"Since it is an office of the Government created by the State, 'it is elemental that the state
or sovereign cannot be sued in its own courts without its consent.' (Beers vs. Arkansas, 20 How.,
527; Memphis & C.R. Co. vs. Tennessee, 101 U.S., 337.)
"This principle has been adopted 'as part of the general doctrine of publicists that the
supreme power in every State, wherever it may reside, shall not be compelled by process of
courts of its own creation, to defend itself in those courts,' because 'the sovereign power of any
nation being supreme is not amenable to the judicial department and will not permit process
against itself, either directly or indirectly, or allow its operations or instrumentalities to be affected
or disturbed except by special consent.' (U.S. vs. Lee, 106 U.S., 196.)
"'A sovereign is exempt from suit, not because of any formal conception or absolute
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. As the ground is thus logical and
practical, the doctrine is not confined to powers that are sovereign in the full sense of juridical
theory but naturally is extended to those that, in actual administration, originate and change at
their will the law of contract and property, from which persons, within the jurisdiction, derive their
rights.' (Kawawanakoa vs. Polyblank, 205 U.S., 349.)
"The practical advantages and benefits of the doctrine of non- suability of a state cannot
be over-estimated. The United States Supreme Court explained that 'the public service would be
rendered nugatory and public safety endangered, if the supreme authority could be subjected to
suit at the instance of every citizen, and consequently, controlled in the use and disposition of
the means required for the proper administration of the Government.' (Siren vs. U.S., 7; Wall,
152.) Or in the words of Justice Gray: 'The broader reason is that it would be inconsistent with
the very idea of supreme executive power and would endanger the performance of the public
duties of the sovereign, to subject him to repeated suits as a matter of right, at the will of any
citizen, and to submit to the judicial tribunals the control and disposition of his property, his
instruments and means of carrying on his government in war and peace, and the money of his
treasury.' (Briggs vs. The Light Boats, 11 Allen, 162.)"
Those who are able to read will immediately find that none of the authorities invoked by petitioner
have any bearing with the present controversy. What said authorities declare exempt from suit is what is
designated in the following words of the cited authorities: "the state or sovereign"; "the supreme power in
every state"; "the sovereign power of any nation"; "a sovereign"; "the supreme authority"; "the supreme
executive power"; "the powers that originate and change at their will the law of contract and property."
Does Metran pretend to be identified with the "state"? Is Metran another king of France proclaiming
"L'etat cest moi"? Is Metran the "sovereign," when, according to our Constitution, sovereignty resides in the
people" Is Metran "the supreme power" or the "supreme authority" of our nation? Only a paranoiac
megalomania may justify an affirmative answer to these questions.
Petitioner's proposition to the effect that, because it is an office or agency of government, it is exempt
from suit, is not supported by any authority invoked by petitioner himself, and it cannot be supported by any
authority in his senses, because it is utterly unreasonable, without any foundation in law, and diametrically
opposed to the system of government of laws, which is the one established by our Constitution. Merrit vs.
Government (34 Phil., 311) and Compañia vs. Government (45 Phil., 663) do not support the theory. The
refer to the government as a whole.
The elemental rights of the laborers working in the service of Metran should not be nullified upon such
a far-fetched proposition. Besides, it involves a dissolvent and destructive political philosophy. What
does Metran intend by denying the power of the Court of Industrial Relations to hear and decide the labor
dispute between itself and its employees? Instead of the orderly settlement of the dispute by the Court of
Industrial Relations, does it want to drive its laborers into declaring a strike, into resorting to picketing, or into
taking violent and desperate measures, whether hopelessness may suggest to persons struggling for
personal dignity, for fundamental rights, for the opportunity of enjoying a decent living? While the people, as
the sovereign, and the state representing that sovereignty, or the government as a whole, representing the
supreme authority of the state, cannot be sued in any court, no individual officer of government and no single
office or agency of government can claim such exemption. No official or agency of the government in above
the law and everybody who is under the law is amenable to be sued in court.
The old monarchs of divine origin, assumed that they could not do wrong and, therefore, they were
placed beyond the pale of the law. They were the law themselves. The dictators, such human specimens as
Hitler, Mussolini, the Japanese Emperor, had the crazedness of placing themselves above the law, and
humanity felt the overwhelming scourage of such bathismal madness or perversity. It there anyone in our
government who is attempting to emulate the misdeeds of said megalomaniacs? Has any one in our
government been infected by the virus of insanity which drove the dictators into a spree of destruction and
mass murders?
Metran's theory that it cannot be sued without its consent is too pretentious to merit consideration
from a court of justice. The theory is premised on the preposterous proposition that to sue Metran is to sue
the government, and the government cannot be sued without the consent of the same government. Since
when has Metran become the government? There is no government in the Philippines except the one
established by the Constitution, and such government is constituted by the whole and complete structure,
wherein the Legislative Department, the Executive Department, the Judicial Department are each one but a
part of a united system, deriving all its powers from the people, on whom sovereignty resides. The President
is not the government. He is but the highest personal authority within it. Congress is not the government;
neither are its component chambers — the Senate and the House of Representatives. It only holds the
highest power of determining the national policies through laws it may enact. Neither the Supreme Court nor
the whole judicial machinery is the government, although to make effective the supremacy of the law, the
Constitution placed in the Supreme Court the conclusive power of saying the last word on all matters and
controversies where law and justice are invoked.
It petitioner itself alleges that it is but an adjunct under the supervision and control of the Secretary of
Public Works and Communications, who is but a member of the Cabinet, which is only an auxiliary body to
help the President in the performance of his executive duties, — and the members may remain in office only
at the pleasure of the President — how can it be the government when even the principal to which it is but an
appendage is not and cannot be the government?
The evil consequences of petitioner's theory are immediately apparent. In case Metran should
happen to employ in its service reckless chauffeurs to drive its many heavy trucks, and by their recklessness
private property is destroyed and the life of innocent citizens is taken, shall the aggrieved parties have to
secure first the consent of Metran before they can sue? If in the simple labor disputes submitted to the Court
of Industrial Relations, Metran has chosen to refuse its consent to be sued, to the extent of seeking our help
to its claim to be placed above the law, can anyone expect that it will give its consent, where its responsibility
for property destroyed and lives taken is to be enforced in the tribunals? Shall the victims then resign to their
helplessness, without even the consolation of the sacramental "I am sorry" with which the
Nippon kempeis used to bid farewell to those who, after many months of incarceration and unbearable
torture, were finally released because the kempeis themselves concluded that all their suspicions were
absolutely groundless?
The possibility of the hypothesis being materialized is not remote. Personal safety and life are
constantly in jeopardy whether at nighttime or in the daytime, in the crowded or uncrowded streets, in the very
capital of the nation. Traffic laws, ordinances and rules are every minute wantonly violated under the very
noses of police officers in uniform and bearing all the external symbols of authority. Uncontrolled speed where
it may cause more harm; insolent cutting of way and criss-crossing; breaking lines, purportedly to get a few
meters ahead of other cars resulting in blocking the traffic and causing many persons long and unreasonably
long delays; the arrogance with which big trucks and buses enforce their self-bestowed right of way, because
they will suffer less in collision; the shameless focusing of headlights with blinding glare at nighttime, are but
some of the culpable everyday practices that are continuously endangering the property and life of innocent
citizens. Lack of discipline in the great majority of the drivers of public service vehicles, and of many low-
numbered cars of high officials, is bolstered by the indifference or leniency of many agents of the law in
charge of traffic. There is absolutely no method as to when or where passengers are to be picked. Buses and
jeeps will run at great speed to short distances, causing vexatious and deafening noise, then suddenly stop to
scramble for the favor of a lone by-stander which might be a prospective passenger. In this general scorn for
the law, for the security of property for the safety of the life and limb of the people, the Metran buses cannot
be excluded from the group of public service vehicles, which are the most frequent and worst violators. Were
all the employees of Metran advised that Metran is above the law, that it cannot be sued without its consent,
no matter what injustices, grievances and iniquities it may perpetrate?
If Metran's theory is to find support in this Court, what will preclude other offices and agencies of
government from claiming the same privilege? What will preclude all officers and employees of the
government from claiming the same immunity? The government then will become a bunch of immunes and
untouchables. No matter what arbitrariness, abuses, anomalies and culpable blunders they may commit and
no matter the magnitude of the harm they may cause to private persons, the latter will just have to keep quiet
as those herded in the Nazi concentration camps. We are not willing to live under such a condition. A people
with any sense of dignity would rather endure a thousand deaths than submit to such a humiliating and
shameless situation."
The petition must be denied. The Court of Industrial Relations must not be hampered in taking
cognizance of the case and in proceeding to try it until final decision.

BRIONES, M., disidente:

Creo que el presente recurso debe denegarse. Estimo que la Corte de Relaciones Industriales tiene
jurisdiccion para actuar y resolver la disputa obrero-industrial de que se trata y por tanto la orden, cuya
revocacion se pide, debe ser sostenida.
El caso de Manila Hotel Employees' Association contra el Manila Hotel y la Corte de Relaciones
Industriales (R. G. No. 48524, decidido por esta Corte Suprema el 1.° de Noviembre, 1941) es aplicable, por
analogia, al presente asunto. Se arguye que existe una diferencia fundamental como es la Manila Railroad, la
Metropolitan Transportation Service conocida vulgarmente por METRAN no lo es sino que es una oficina
sujeta al Departamento de Obras Publicas. En otras palabras, se arguye que la METRAN no tiene
personalidad juridica y, por tanto, no puede demandar ni ser demandada.
Creo, sin embargo, que para los efectos de la jurisdiccion de la Corte de Relaciones Industriales, tal
diferencia es immaterial y carece de importancia. Queramos o no, nuestro gobierno — el gobierno de
Filipinas — esta adherid_definitivamente desde hace bastante tiempo, tanto en el terreno de los principios
como de la realidad, a una politics limitada de explotacion de ciertos negocios y utilidades publicas para
promover la capacidad industrial y productiva de la nacion, y para fomentar el bienestar general. La
formacion de la Compañia de Fomento Nacional (National Development Company), con sus diferentes
ramificaciones como la fabrica de cemento de Cebu, la manufactura de tejidos, la conserva de pescados, la
explotaciones carboniferas, etc., etc., esta concebida e inspirada en dicha politica. La idea no es talmente
organizar un Estado socialista, sino mas bien suplir la iniciativa privada alli donde o falta y escasea el capital,
o donde este, por timidez, no quiere exponerse a riesgos. Una vez que la empresa este establecida y
funcionando con exito, el plan preconcebido es entregarla a manos particulares, yendo el gobierno a explotar
como "pioneer" otros campos no probados. En la Constitucion se autoriza expresamente la expropiacion de
utilidades publicas de propiedad particular, cuando el interes general lo exigiere.
"The State may, in the interest of national welfare and defense, establish and operate
industries and means of transportation and communication, and, upon payment of just
compensation, transfer to public ownership utilities and other private enterprises to be operated
by the government. (Art. XIII, sec. 6 Constitucion de Filipinas.)
Ahora bien; cuando el gobierno hace esto ¿ha de ser necesariamente por medio de una corporacion
debidamente organizada de acuerdo con la ley general de corporaciones, o creada mediante una ley
especial, o tambien puede hacerlo creanado una simple agencia mediante una orden ejecutiva, como en este
case de la METRAN? Creo que si, que este ultimo es perfectamente viable, y cuando el gobierno hace esto
la agencia resultante tiene tanta personalidad como cualquier otra corporation para ser, por lo menos,
sometida y regulada por la Comision de Servicios Publicos y por la Corte de Relaciones Industriales. En tal
caso, para poder interponer una queja o reclamacion contra dicha agencia ante cualquiera de estas dos
ultimas entidades, no es necesario contar con el permiso previo del gobierno como en los casos ordinarios
de demanda para exigir del mismo responsabilidades. Es absurdo pensar que el gobierno organice una
agencia como la METRAN, con la idea de sustraerla a la jurisdiccion de la Comision de Servicios Publicos o
de la Corte de Relaciones Industriales, segun sea el caso. Asi como la METRAN se somete a la Comision de
Servicios Publicos para el ajuste y regulacion de las rutas y horario de sus vehiculos, colocandose en este
respecto en el mismo nivel de las empresas y compañias particulares, sin necesidad de permiso previo del
Gobierno, tanto si ella es la recurrente como es la recurrida, asi tambin debe someterse a la Corte de
Relaciones Industriales para el arreglo y solucion de las diferencias y disputas con sus obreros, sin tampoco
necesidad de previa licencia del gobierno. Cuando el gobierno interviene en la operacion de utilidades
publicas, aunque no sea para fines de lucro como en el caso de la METRAN, debe ser tratado como un
particular cualquiera el gobierno se crearia injustamente para si ventajas y privilegios en relacion con las
empresad particulares, y sus obreros, sobre todo, estarian en peor situacion que los particulares, pues
quedarian privados del amparo y de los beneficios proveidos por las leyes que rigen las relaciones industrio-
obreras. Presumo que el gobierno no permitira que se anulen los fines altamente buenos y saludables de
dichas leyes; por el contrario, debe ser el primero en el respeto y observancia de las mismas.
Ademas, la METRAN se halla en "estoppel" para cuestionar la jurisdiccion del Tribunal de Relaciones
Industriales. De autos resulta que ella, por medio de su Gerente General interino Sr. Hermenegildo B. Reyes,
sometio al Departamento del Trabajo una solicitud de afiliacion a la National Labor Union, lo cual significa
implicitamente una sujecion voluntaria y automatica a la jurisdiccion de la Corte de Relaciones Industriales.
Es una verdadera lstima. Dicho sea con todos los respetos debidos, la dicision de la mayoria en este
asunto constituye un retroceso en los progresos y avances que nuestra legislacion y jurisprudencia sociales e
industriales han hecho firmemente en estos ultimos años. En vez de cortarle los vuelos a la Corte de
Relaciones Industriales en todo lo que es propia y legitimamente posible, debieramos permitir una sana y
vigorosa expansion de sus funciones transcendentales de arbitraje industrial y obrero.

||| (Metropolitan Transportation Service v. Paredes, G.R. No. L-1232, [January 12, 1948], 79 PHIL 819-839)

N BANC

[G.R. No. L-26386. September 30, 1969.]

PROVIDENCE WASHINGTON INSURANCE CO., plaintiff-appellant, vs. REPUBLIC OF THE


PHILIPPINES and BUREAU OF CUSTOMS, defendants-appellees.

Quasha, Asperilla, Blanco, Zafra & Tayag for plaintiff-appellant.


Solicitor General Antonio P. Barredo, Assistant Solicitor General Antonio G. Ibarra, Trial Attorney Herminio Z.
Florendo and Felipe T. Cuison for defendants-appellees.

SYLLABUS

1. CONSTITUTIONAL LAW; STATE; IMMUNITY FROM SUIT; DOCTRINE. — The doctrine of non-suability holds
undisputed sway. Its primacy appears to be undeniable. For a suit against the State to prosper, there must be a
showing of consent either in express terms or by implication through the use of statutory language too plain to be
misinterpreted.
2. ID.; ID.; ID.; REASON. — A continued adherence to the doctrine of non-suability is not to be deplored for as
against the inconvenience that may be caused private parties, the loss of government efficiency and the obstacle
to the performance of its multifarious functions are far greater if such a fundamental principle were abandoned
and the availability of judicial remedy were not restricted. With the well known propensity on the part of our people
to go to court, at the least provocation, the loss of time and energy required to defend against law suits, in the
absence of such a basic principle that constitutes such an effective obstacle, could very well be imagined.
3. ID.; ID.; ID.; REMEDY IN CASE OF CLAIM ARISING FROM CONTRACT. — In case of money claim arising
from contract, express or implied, which could serve as a basis for civil action between private parties, such a
consent has been given by a statute enacted by the Philippine legislature, even before the Constitution took effect
and still applicable at present. The procedure provided for in such a statute was made more expeditious by a
Commonwealth Act, enabling the party or entity, who feels aggrieved by the final decision of the Auditor General
required to decide the claim within sixty days, having the right to go to this Court for final adjudication.
4. ID.; ID.; ID.; NO INJUSTICE TO CLAIMANTS. — 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.
5. ID.; ID.; ID.; BUREAU OF CUSTOMS AS OPERATORS OF ARRASTRE SERVICE IS IMMUNE PROM SUIT.
— The Bureau of Customs in the operation of the Arrastre Service, is immune from suit, there being no statute to
the contrary.

DECISION

FERNANDO, J p:

Providence Washington Insurance Co. filed, on October 21, 1966, its brief as appellant against an
order of the lower court dismissing its suit for the non-delivery of thirty cases of steel files, which cargo was
insured by it against loss and damage, naming as defendants the Republic of the Philippines and the
Bureau of Customs as the operator of the arrastre service, thus rendering unavoidable the invocation of the
well-settled doctrine of non-suability ofthe government. Less than two months later, on December 17, 1966,
our decision in Mobil Philippines Exploration, Inc. v. Customs Arrastre Service was promulgated. 1 We there
explicitly held: "The Bureau of Customs, acting as part of the machinery of the national government in the
operation of the arrastre service,. pursuant to express legislative mandate and as a necessary incident of its
prime governmental function, is immune from suit, there being no statute to the contrary."

As of this date, thirty-six subsequent cases, certainly a figure far from unimpressive, have been similarly decided
expressly reaffirming the above ruling ofgovernmental immunity from suit without its consent. 2 The futility of this
appeal is quite apparent. We affirm the lower court order of dismissal.
The doctrine of non-suability thus holds undisputed sway. Its primacy appears to be undeniable. For a suit of this
character to prosper, there must be a showing of consent either in express terms or by implication through the
use of statutory language too plain to be misinterpreted. Its absence being obvious, the lower court acted
correctly.
Nor did the Mobil decision blaze a new trail. So it has been from the time the Constitution took effect in 1935.
Bull v. Yatco, a 1939 decision during the Commonwealth, spoke to that effect. 3 Adherence to such a view is
reflected in the various cases decided after independence before the Mobil Exploration case. 4 The classic
formulation of Holmes of this doctrine of non-suability thus bears restatement: "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." 5
This is not to deny that while indeed logical and far from impractical the doctrine does give rise to problems
considering how widely immersed in matters hitherto deemed outside its sphere the government is at present. Nor
is it likely considering its expanding role, demanded by the times and warranted by the Constitution, that a halt
would be called to many of its activities, at times unavoidably adversely affecting private rights. Nonetheless, a
continued adherence to the doctrine of non-suability is not to be deplored for as against the inconvenience that
may be caused private parties, the loss of governmental efficiency and the obstacle to the performance of its
multifarious functions are far greater if such a fundamental principle were abandoned and the availability ofjudicial
remedy were not thus restricted. With the well known propensity on the part of our people to go to court, at the
least provocation, the loss of time and energy required to defend against law suits, in the absence of such a basic
principle that constitutes such an effective obstacle, could very well be imagined.
At any rate, in case of a money claim arising from contract, express or implied, which could serve as a basis for
civil action between private parties, such a consent has been given by a statute enacted by the Philippine
legislature, even before the Constitution took effect and still applicable at present. 6 The procedure provided for in
such a statute 7 was made more expeditious by a Commonwealth Act, enabling the party or entity, who feels
aggrieved by the final decision of the Auditor General required to decide the claim within sixty days, having the
right to go to this Court for final adjudication. 8 It is worthy of note likewise that in the pursuit of its activities
affecting business, the government has increasingly relied on private corporations possessing the power to sue
and be sued. 9
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.
WHEREFORE, the order of dismissal of the lower court of May 23, 1966 is affirmed. With costs against plaintiff-
appellant.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Capistrano and Teehankee, JJ., concur.
Barredo, J., did not take part.
Reyes, J.B.L., J., is on official trip.
||| (Providence Washington Insurance Co. v. Republic, G.R. No. L-26386, [September 30, 1969], 140 PHIL 177-
183)

FIRST DIVISION

[G.R. No. L-46930. June 10, 1988.]

DALE SANDERS, and A.S. MOREAU, JR., petitioners, vs. HON. REGINO T. VERIDIANO II,
as Presiding Judge, Branch I, Court of First Instance of Zambales, Olongapo City,
ANTHONY M. ROSSI and RALPH L. WYERS, respondents.

DECISION

CRUZ, J p:

The basic issue to be resolved in this case is whether or not the petitioners were performing their official duties
when they did the acts for which they have been sued for damages by the private respondents. Once this
question is decided, the other answers will fall into place and this petition need not detain us any longer than it
already has.
Petitioner Sanders was, at the time the incident in question occurred, the special services director of the U.S.
Naval Station (NAVSTA) in Olongapo City. 1Petitioner Moreau was the commanding officer of the Subic Naval
Base, which includes the said station. 2 Private respondent Rossi is an American citizen with permanent
residence in the Philippines, 3 as so was private respondent Wyer, who died two years ago. 4 They were both
employed as gameroom attendants in the special services department of the NAVSTA, the former having been
hired in 1971 and the latter in 1969. 5
On October 3, 1975, the private respondents were advised that their employment had been converted from
permanent full-time to permanent part-time, effective October 18, 1975. 6 Their reaction was to protest this
conversion and to institute grievance proceedings conformably to the pertinent rules and regulations of the U.S.
Department of Defense. The result was a recommendation from the hearing officer who conducted the
proceedings for the reinstatement of the private respondents to permanent full-time status plus backwages. The
report on the hearing contained the observation that "Special Services management practices an autocratic form
of supervision." 7
In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the complaint), Sanders disagreed with
the hearing officer's report and asked for the rejection of the abovestated recommendation. The letter contained
the statements that: a) "Mr. Rossi tends to alienate most co-workers and supervisors;" b) "Messrs. Rossi and
Wyers have proven, according to their immediate supervisors, to be difficult employees to supervise;" and c)
"even though the grievants were under oath not to discuss the case with anyone, (they) placed the records in
public places where others not involved in the case could hear."
On November 7, 1975, before the start of the grievance hearings, a letter (Annex "B" of the complaint) purportedly
coming from petitioner Moreau as the commanding general of the U.S. Naval Station in Subic Bay was sent to the
Chief of Naval Personnel explaining the change of the private respondent's employment status and requesting
concurrence therewith. The letter did not carry his signature but was signed by W.B. Moore, Jr. "by direction,"
presumably of Moreau.
On the basis of these antecedent facts, the private respondent filed in the Court of First Instance of Olongapo City
a complaint for damages against the herein petitioners on November 8, 1976. 8 The plaintiffs claimed that the
letters contained libelous imputations that had exposed them to ridicule and caused them mental anguish and that
the prejudgment of the grievance proceedings was an invasion of their personal and proprietary rights.
The private respondents made it clear that the petitioners were being sued in their private or personal capacity.
However, in a motion to dismiss filed under a special appearance, the petitioners argued that the acts complained
of were performed by them in the discharge of their official duties and that, consequently, the court had no
jurisdiction over them under the doctrine of state immunity.
After extensive written arguments between the parties, the motion was denied in an order dated March 8,
1977, 9 on the main ground that the petitioners had not presented any evidence that their acts were official in
nature and not personal torts, moreover, the allegation in the complaint was that the defendants had acted
maliciously and in bad faith. The same order issued a writ of preliminary attachment, conditioned upon the filing of
a P10,000.00 bond by the plaintiffs, against the properties of petitioner Moreau, who allegedly was then about to
leave the Philippines. Subsequently, to make matters worse for the defendants, petitioner Moreau was declared in
default by the trial court in its order dated August 9, 1977. The motion to lift the default order on the ground that
Moreau's failure to appear at the pre-trial conference was the result of some misunderstanding, and the motion for
reconsideration of the denial of the motion to dismiss, which was filed by the petitioner's new lawyers, were
denied by the respondent court on September 7, 1977.
This petition for certiorari, prohibition and preliminary injunction was thereafter filed before this Court, on the
contention that the above-narrated acts of the respondent court are tainted with grave abuse of discretion
amounting to lack of jurisdiction.
We return now to the basic question of whether the petitioners were acting officially or only in their private
capacities when they did the acts for which the private respondents have sued them for damages.
It is stressed at the outset that the mere allegation that a government functionary is being sued in his personal
capacity will not automatically remove him from the protection of the law of public officers and, if appropriate, the
doctrine of state immunity. By the same token, the mere invocation of official character will not suffice to insulate
him from suability and liability for an act imputed to him as a personal tort committed without or in excess of his
authority. These well-settled principles are applicable not only to the officers of the local state but also where the
person sued in its courts pertains to the government of a foreign state, as in the present case.
The respondent judge, apparently finding that the complained acts were prima facie personal and tortious,
decided to proceed to trial to determine inter aliatheir precise character on the strength of the evidence to be
submitted by the parties. The petitioners have objected, arguing that no such evidence was needed to
substantiate their claim of jurisdictional immunity. Pending resolution of this question, we issued a temporary
restraining order on September 26, 1977, that has since then suspended the proceedings in this case in the
court a quo. LLjur
In past cases, this Court has held that where the character of the act complained of can be determined from the
pleadings exchanged between the parties before the trial, it is not necessary for the court to require them to
belabor the point at a trial still to be conducted. Such a proceeding would be superfluous, not to say unfair to the
defendant who is subjected to unnecessary and avoidable inconvenience.
Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint against the commanding general of the
Olongapo Naval Base should not have been denied because it had been sufficiently shown that the act for which
he was being sued was done in his official capacity on behalf of the American government. The United States had
not given its consent to be sued. It was the reverse situation in Syquia v. Almeda Lopez, 11 where we sustained
the order of the lower court granting a motion to dismiss a complaint against certain officers of the U.S. armed
forces also shown to be acting officially in the name of the American government. The United States had also not
waived its immunity from suit. Only three years ago, in United States of America v. Ruiz, 12 we set aside the
denial by the lower court of a motion to dismiss a complaint for damages filed against the United States and
several of its officials, it appearing that the act complained of was governmental rather than proprietary, and
certainly not personal. In these and several other cases, 13 the Court found it redundant to prolong the
proceedings after it had become clear that the suit could not prosper because the acts complained of were
covered by the doctrine of state immunity.
It is abundantly clear in the present case that the acts for which the petitioners are being called to account were
performed by them in the discharge of their official duties. Sanders, as director of the special services department
of NAVSTA, undoubtedly had supervision over its personnel, including the private respondents, and had a hand in
their employment, work assignments, discipline, dismissal and other related matters. It is not disputed that the
letter he had written was in fact a reply to a request from his superior, the other petitioner, for more information
regarding the case of the private respondents. 14Moreover, even in the absence of such request, he still was
within his rights in reacting to the hearing officer's criticism — in effect a direct attack against him — that Special
Services was practicing "an autocratic form of supervision."
As for Moreau, what he is claimed to have done was write the Chief of Naval Personnel for concurrence with the
conversion of the private respondents' type of employment even before the grievance proceedings had even
commenced. Disregarding for the nonce the question of its timeliness, this act is clearly official in nature,
performed by Moreau as the immediate superior of Sanders and directly answerable to Naval Personnel in
matters involving 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 above-described letters, we have to conclude that 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 government, and not the petitioners personally, that
is responsible for their acts. Assuming that the trial can proceed and it is proved that the claimants have a right to
the payment of damages, such award will have to be satisfied not by the petitioners in their personal capacities
but by the United States government as their principal. This will require that government to perform an affirmative
act to satisfy the judgment, viz., the appropriation of the necessary amount to cover the damages awarded, thus
making the action a suit against that government without its consent. cdrep

There should be no question by now that such complaint cannot prosper unless the government sought to be held
ultimately liable has given its consent to be sued. So we have ruled not only in Baer but in many other decisions
where we upheld the doctrine of state immumity as applicable not only to our own government but also to foreign
states sought to be subjected to the jurisdiction of our courts. 15
The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right against the authority
which makes the law on which the right depends." 16 In the case of foreign states, the rule is derived from the
principle of the sovereign equality of states which wisely admonishes that par in parem non habet imperium and
that a contrary attitude would "unduly vex the peace of nations." 17 Our adherence to this precept is formally
expressed in Article II, Section 2, of our Constitution, where we reiterate from our previous charters that the
Philippines "adopts the generally accepted principles of international law as part of the law of the land."
All this is not to say that in no case may a public officer be sued as such without the previous consent of the state.
To be sure, there are a number of well-recognized exceptions. It is clear that a public officer may be sued as such
to compel him to do an act required by law, as where, say, a register of deeds refuses to record a deed of
sale; 18 or to restrain a Cabinet member, for example, from enforcing a law claimed to be unconstitutional; 19 or
to compel the national treasurer to pay damages from an already appropriated assurance fund; 20 or the
commissioner of internal revenue to refund tax overpayments from a fund already available for the purpose; 21 or,
in general, to secure a judgment that the officer impleaded may satisfy by himself without the government itself
having to do a positive act to assist him. We have also held that where the government itself has violated its own
laws, the aggrieved party may directly implead the government even without first filing his claim with the
Commission on Audit as normally required, as the doctrine of state immunity "cannot be used as an instrument for
perpetrating an injustice." 22
This case must also be distinguished from such decisions as Festejo v. Fernando, 23 where the Court held that a
bureau director could be sued for damages on a personal tort committed by him when he acted without or in
excess of authority in forcibly taking private property without paying just compensation therefor although he did
convert it into a public irrigation canal. It was not necessary to secure the previous consent of the state, nor could
it be validly impleaded as a party defendant, as it was not responsible for the defendant's unauthorized act.
The case at bar, to repeat, comes under the rule and not under any of the recognized exceptions. The
government of the United States has not given its consent to be sued for the official acts of the petitioners, who
cannot satisfy any judgment that may be rendered against them. As it is the American government itself that will
have to perform the affirmative act of appropriating the amount that may be adjudged for the private respondents,
the complaint must be dismissed for lack of jurisdiction.
The Court finds that, even under the law of public officers, the acts of the petitioners are protected by the
presumption of good faith, which has not been overturned by the private respondents. Even mistakes concededly
committed by such public officers are not actionable as long as it is not shown that they were motivated by malice
or gross negligence amounting to bad faith. 24 This, too, is well-settled. 25 Furthermore, applying now our own
penal laws, the letters come under the concept of privileged communications and are not punishable, 26 let alone
the fact that the resented remarks are not defamatory by our standards. It seems the private respondents have
overstated their case.
A final consideration is that since the questioned acts were done in the Olongapo Naval Base by the petitioners in
the performance of their official duties and the private respondents are themselves American citizens, it would
seem only proper for the courts of this country to refrain from taking cognizance of this matter and to treat it as
coming under the internal administration of the said base.
The petitioners' counsel have submitted a memorandum replete with citations of American cases, as if they were
arguing before a court of the United States. The Court is bemused by such attitude. While these decisions do
have persuasive effect upon us, they can at best be invoked only to support our own jurisprudence, which we
have developed and enriched on the basis of our own persuasions as a people, particularly since we became
independent in 1946. LLjur
We appreciate the assistance foreign decisions offer us, and not only from the United States but also from Spain
and other countries from which we have derived some if not most of our own laws. But we should not place undue
and fawning reliance upon them and regard them as indispensable mental crutches without which we cannot
come to our own decisions through the employment of our own endowments. We live in a different ambience and
must decide our own problems in the light of our own interests and needs, and of our qualities and even
idiosyncrasies as a people, and always with our own concept of law and justice.
The private respondents must, if they are still so minded, pursue their claim against the petitioners in accordance
with the laws of the United States, of which they are all citizens and under whose jurisdiction the alleged offenses
were committed. Even assuming that our own laws are applicable, the United States government has not decided
to give its consent to be sued in our courts, which therefore has not acquired the competence to act on the said
claim.
WHEREFORE, the petition is GRANTED. The challenged orders dated March 8, 1977, August 9, 1977, and
September 7, 1977, are SET ASIDE. The respondent court is directed to DISMISS Civil Case No. 2077-O. Our
Temporary restraining order of September 26, 1977, is made PERMANENT. No costs.
SO ORDERED.
Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.
||| (Sanders v. Veridiano II, G.R. No. L-46930, [June 10, 1988], 245 PHIL 63-76)

N BANC
[G.R. No. 84607. March 19, 1993.]

REPUBLIC OF THE PHILIPPINES, GEN. RAMON MONTANO, GEN. ALFREDO LIM, GEN.
ALEXANDER AGUIRRE, COL. EDGAR DULA TORRES, COL. CEZAR NAZARENO, MAJ.
FILEMON GASMEN, PAT. NICANOR ABANDO, PFC SERAPIN CEBU, JR., GEN. BRIGIDO
PAREDES, COL. ROGELIO MONFORTE, PFC ANTONIO LUCERO, PAT. JOSE MENDIOLA,
PAT. NELSON TUAZON, POLICE CORPORAL PANFILO ROGOS, POLICE LT. JUAN B.
BELTRAN, PAT. NOEL MANAGBAO, MARINE THIRD CLASS TRAINEE (3CT) NOLITO
NOGATO, 3CT ALEJANDRO B. NAGUIO, JR., EFREN ARCILLAS, 3CT AGERICO LUNA,
3CT BASILIO BORJA, 3CT MANOLITO LUSPO, 3CT CRISTITUTO GERVACIO, 3CT
MANUEL DELA CRUZ, JR., MARINE (CDC) BN., (CIVIL DISTURBANCE CONTROL),
MOBILE DISPERSAL TEAM (MDT), LT. ROMEO PAQUINTO, LT. LAONGLAANG GOCE,
MAJ. DEMETRIO DE LA CRUZ, POLICE CAPTAIN RODOLFO NAVAL, JOHN DOE,
RICHARD DOE, ROBERTO DOE AND OTHER DOES,petitioners, vs. HON. EDILBERTO
G. SANDOVAL, Regional Trial Court of Manila, Branch IX, ERLINDA C. CAYLAO,
ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO, ELMA
GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM, PURITA YUMUL, MIGUEL
ARABE, TERESITA ARJONA, RONALDO CAMPOMANES AND CARMENCITA ARDONI
VDA. DE CAMPOMANES, ROGELIO DOMUNICO, in their capacity as heirs of the
deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ, DIONESIO BAUTISTA, DANTE
EVANGELIO, ADELFA ARIBE, DANILO ARJONA, VICENTE CAMPOMANES, RONILO
DOMUNICO) respectively; and (names of sixty-two injured victims) EDDIE AGUINALDO,
FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE MENSOLA,
ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO
LABAMBA, JR., EFREN MACARAIG, SOLOMON MANALOTO, ROMEO DURAN, NILO
TAGUBAT, JUN CARSELLAR, JOEY CLEMENTE, GERARDO COYOCA, LUISITO DACO,
BENJAMIN DELA CRUZ, ARTHUR FONTANILLA, WILSON GARCIA, CARLOS SIRAY,
JOSE PERRAS, TOMAS VALLOS, ARNOLD ENAJE, MARIANITA DIMAPILIS, FRANCISCO
ANGELES, MARCELO ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS MENDOZA,
VICTORINO QUIJANO, JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS
ALCANTARA, MAMERTO ALIAS, EMELITO ALMONTE, BENILDA ALONUEVO, EMMA
ABADILLO, REYNALDO CABALLES, JR., JAIME CALDETO, FABIAN CANTELEJO,
RODRIGO CARABARA, ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO DEMASACA,
FRANCISCO GONZALES, ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA,
PERLITO SALAYSAY, JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI
UMALI, REMIGIO MAHALIN, BONG MANLULO, ARMANDO MATIENZO, CARLO MEDINA,
LITO NOVENARIO, and ROSELLA ROBALE, respondents.

[G.R. No. 84645. March 19, 1993.]

ERLINDA C. CAYLAO, ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA


EVANGELIO, ELMA GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM, PURITA
YUMUL, MIGUEL ARABE, TERESITA ARJONA, RONALDO CAMPOMANES AND
CARMENCITA ARDONI VDA. DE CAMPOMANES, ROGELIO DOMUNICO, in their capacity
as heirs of the deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ, DIONESIO
BAUTISTA, DANTE EVANGELIO, RODRIGO GRAMPA, ANGELITO GUTIERREZ,
BERNABE LAKINDANUM, ROBERTO YUMUL, LEOPOLDO ALONZO, ADELFA ARIBE,
DANILO ARJONA, VICENTE CAMPOMANES, RONILO DOMUNICO) respectively; and
(names of sixty-two injured victims) EDDIE AGUINALDO, FELICISIMO ALBASIA,
NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE MENSOLA, ALBERT PITALBO, VICENTE
ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO LABAMBA, JR. EFREN MACARAIG,
SOLOMON MANALOTO, ROMEO DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY
CLEMENTE, GERARDO COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR
FONTANILLA, WILSON GARCIA, CARLOS SIRAY, JOSE PERRAS, TOMAS VALLOS,
ARNOLD ENAJE, MARIANITA DIMAPILIS, FRANCISCO ANGELES, MARCELO
ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS MENDOZA, VICTORINO QUIJANO,
JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS ALCANTARA, MAMERTO
ALIAS, EMELITO ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO
CABALLES, JR., JAIME CALDETO, FABIAN CANTELEJO, RODRIGO CARABARA,
ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO DEMASACA, FRANCISCO
GONZALES, ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA, PERLITO
SALAYSAY, JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI,
REMIGIO MAHALIN, BONG MANLULO, ARMANDO MATIENZO, CARLO MEDINA, LITO
NOVENARIO, ROSELLA ROBALE,petitioners, vs. REPUBLIC OF THE PHILIPPINES, and
HONORABLE EDILBERTO G. SANDOVAL, Regional Trial Court of Manila, Branch
9,respondents.

SYLLABUS

1. POLITICAL LAW; PRINCIPLE OF STATE'S IMMUNITY FROM SUIT; CONSTRUED. — Under


our Constitution the principle of immunity of the government from suit is expressly provided in Article XVI, Section
3. The principle is based on the very essence of sovereignty, and on the practical ground that there can be no
legal right as against the authority that makes the law on which the right depends. It also rests on reasons of
public policy — that public service would be hindered, and the public endangered, if the sovereign authority could
be subjected to law suits at the instance of every citizen and consequently controlled in the uses and dispositions
of the means required for the proper administration of the government.
2. ID.; ID.; NOT DEEMED WAIVED WHEN THE GOVERNMENT AUTHORIZES THE INDEMNIFICATION FOR
THE VICTIM OR THROUGH PUBLIC ADDRESSES MADE BY THE PRESIDENT. — Petitioners (Caylao group)
advance the argument that the State has impliedly waived its sovereign immunity from suit. It is their considered
view that by the recommendation made by the Commission for the government to indemnity the heirs and victims
of the Mendiola incident and by the public addresses made by then President Aquino in the aftermath of the
killings, the State has consented to be sued. This is not a suit against the State with its consent. Firstly, the
recommendation made by the Commission regarding indemnification of the heirs of the deceased and the victims
of the incident by the government does not in any way mean that liability automatically attaches to the State. It is
important to note that A.O. 11 expressly states that the purpose of creating the Commission was to have a body
that will conduct an "investigation of the disorder, deaths and casualties that took place." In the exercise of its
functions, A.O. 11 provides guidelines, and what is relevant to Our discussion reads: "1. Its conclusions regarding
the existence of probable cause for the commission of any offense and of the persons probably guilty of the same
shall be sufficient compliance with the rules on preliminary investigation and the charges arising therefrom may be
filed directly with the proper court." In effect, whatever may be the findings of the Commission, the same shall only
serve as the cause of action in the event that any party decides to litigate his/her claim. Therefore, the
Commission is merely a preliminary venue. The Commission is not the end in itself. Whatever recommendation it
makes cannot in any way bind the State immediately, such recommendation not having become final and
executory. This is precisely the essence of it being a fact-finding body. Secondly, whatever acts or utterances that
then President Aquino may have done or said, the same are not tantamount to the State having waived its
immunity from suit. The President's act of joining the marchers, days after the incident, does not mean that there
was an admission by the State of any liability. In fact to borrow the words of petitioners (Caylao group), "it was an
act of solidarity by the government with the people." Moreover, petitioners rely on President Aquino's speech
promising that the government would address the grievances of the rallyists. By this alone, it cannot be inferred
that the State has admitted any liability, much less can it be inferred that it has consented to the suit.
3. ID.; ID.; WHEN AVAILABLE; RULE; CASE AT BAR. — Some instances when a suit against the State is proper
are" (1) When the Republic is sued by name; (2) When the suit is against an unincorporated government agency;
(3) When the suit is on its face against a government officer but the case is such that ultimate liability will belong
not to the officer but to the government. While the Republic in this case is sued by name, the ultimate liability does
not pertain to the government. Although the military officers and personnel, then party defendants, were
discharging their official functions when the incident occurred, their functions ceased to be official the moment
they exceeded their authority. Based on the Commission findings, there was lack of justification by the
government forces in the use of firearms. Moreover, the members of the police and military crowd dispersal units
committed a prohibited act under B.P. Blg. 880 as there was unnecessary firing by them in dispersing the
marchers.
4. ID.; ID.; CANNOT INSTITUTIONALIZE IRRESPONSIBILITY AND NON-ACCOUNTABILITY NOR GRANT A
PRIVILEGE STATUS NOT CLAIMED BY ANY OTHER OFFICIAL OF THE REPUBLIC. — As early as 1954, this
Court has pronounced that an officer cannot shelter himself by the plea that he is a public agent acting under the
color of his office when his acts are wholly without authority. Until recently in 1991, this doctrine still found
application, this Court saying that immunity from suit cannot institutionalize irresponsibility and non-accountability
nor grant a privileged status not claimed by any other official of theRepublic. The military and police forces were
deployed to ensure that the rally would be peaceful and orderly as well as to guarantee the safety of the very
people that they are duty-bound to protect. However, the facts as found by the trial court showed that they fired at
the unruly crowd to disperse the latter.
5. ID.; ID.; DOES NOT APPLY WHEN THE RELIEF DEMANDED BY THE SUIT REQUIRES NO AFFIRMATIVE
OFFICIAL ACTION ON THE PART OF THE STATE NOR THE AFFIRMATIVE DISCHARGE OF ANY
OBLIGATION WHICH BELONGS TO THE STATE IN ITS POLITICAL CAPACITY. — While it is true that nothing
is better settled than the general rule that a sovereign state and its political subdivisions cannot be sued in the
courts except when it has given its consent, it cannot be invoked by both the military officers to release them from
any liability, and by the heirs and victims to demand indemnification from the government. The principle of state
immunity from suit does not apply, as in this case, when the relief demanded by the suit requires no affirmative
official action on the part of the State nor the affirmative discharge of any obligation which belongs to the State in
its political capacity, even though the officers or agents who are made defendants claim to hold or act only by
virtue of a title of the state and as its agents and servants. This Court has made it quite clear that even a "high
position in the government does not confer a license to persecute or recklessly injure another."

DECISION

CAMPOS, JR., J p:
People may have already forgotten the tragedy that transpired on January 22, 1987. It is quite ironic that then,
some journalists called it a Black Thursday, as a grim reminder to the nation of the misfortune that befell twelve
(12) rallyists. But for most Filipinos now, the Mendiola massacre may now just as well be a chapter in our history
books. For those however, who have become widows and orphans, certainly they would not settle for just that.
They seek retribution for the lives taken that will never be brought back to life again. LLjur
Hence, the heirs of the deceased, together with those injured(Caylao group), instituted this petition, docketed as
G.R. No. 84645, under Section 1 of Rule 65 of the Rules of Court, seeking the reversal and setting aside of the
Orders of respondent Judge Sandoval, 1 dated May 31 and August 8, 1988, dismissing the complaint for
damages of herein petitioners against the Republic of the Philippines in Civil Case. No. 88-43351.
Petitioner, the Republic of the Philippines, through a similar remedy, docketed as G.R. No. 84607, seeks to set
aside the Order of respondent Judge dated May 31, 1988, in Civil Case No. 88-43351 entitled "Erlinda Caylao, et
al. vs. Republic of the Philippines, et al."
The pertinent portion of the questioned Order 2 dated May 31, 1988, reads as follows:
"With respect however to the other defendants, the impleaded Military Officers, since they are
being charged in their personal and official capacity, and holding them liable, if at all, would not
result in financial responsibility of the government, the principle of immunity from suit can not
conveniently and correspondingly be applied to them.
WHEREFORE, the case as against the defendant Republic of the Philippines is hereby
dismissed. As against the rest of the defendants the motion to dismiss is denied. They are
given a period of ten (10) days from receipt of this order within which to file their respective
pleadings."
On the other hand, the Order 3 , dated August 8, 1988, denied the motions filed by both parties, for a
reconsideration of the abovecited Order, respondent Judge finding no cogent reason to disturb the said order.
The massacre was the culmination of eight days and seven nights of encampment by members of the militant
Kilusang Magbubukid sa Pilipinas (KMP) at the then Ministry (now Department) of Agrarian Reform (MAR) at the
Philippine Tobacco Administration Building along Elliptical Road in Diliman, Quezon City.
The farmers and their sympathizers presented their demands for what they called "genuine agrarian reform". The
KMP, led by its national president, Jaime Tadeo, presented their problems and demands, among which were: (a)
giving lands for free to farmers; (b) zero retention of lands by landlords; and (c) stop amortizations of land
payments.
The dialogue between the farmers and the MAR officials began on January 15, 1987. The two days that followed
saw a marked increase in people at the encampment. It was only on January 19, 1987 that Jaime Tadeo arrived
to meet with then Minister Heherson Alvarez, only to be informed that the Minister can only meet with him the
following day. On January 20, 1987, the meeting was held at the MAR conference room. Tadeo demanded that
the minimum comprehensive land reform program be granted immediately. Minister Alvarez, for his part, can only
promise to do his best to bring the matter to the attention of then President Aquino, during the cabinet meeting on
January 21, 1987.
Tension mounted the following day. The farmers, now on their seventh day of encampment, barricaded the MAR
premises and prevented the employees from going inside their offices. They hoisted the KMP flag together with
the Philippine flag.
At around 6:30 p.m. of the same day, Minister Alvarez, in a meeting with Tadeo and his leaders, advised the latter
to instead wait for the ratification of the1987 Constitution and just allow the government to implement its
comprehensive land reform program. Tadeo, however, countered by saying that he did not believe in
the Constitution and that a genuine land reform cannot be realized under a landlord-controlled Congress. A
heated discussion ensued between Tadeo and Minister Alvarez. This notwithstanding, Minister Alvarez suggested
a negotiating panel from each side to meet again the following day.
On January 22, 1987, Tadeo's group instead decided to march to Malacañang to air their demands. Before the
march started, Tadeo talked to the press and TV media. He uttered fiery words, the most telling of which were:
". . . inalis namin ang barikada bilang kahilingan ng ating Presidente, pero kinakailangan alisin din niya ang
barikada sa Mendiola sapagkat bubutasin din namin iyon at dadanak ang dugo . . ." 4
The farmers then proceeded to march to Malacañang, from Quezon Memorial Circle, at 10:00 a.m. They were
later joined by members of other sectoral organizations such as the Kilusang Mayo Uno (KMU), Bagong
Alyansang Makabayan (BAYAN), League of Filipino Students (LFS) and Kongreso ng Pagkakaisa ng Maralitang
Lungsod (KPML).
At around 1:00 p.m., the marchers reached Liwasang Bonifacio where they held a brief program. It was at this
point that some of the marchers entered the eastern side of the Post Office Building, and removed the steel bars
surrounding the garden. Thereafter, they joined the march to Malacañang. At about 4:30 p.m., they reached C.M.
Recto Avenue.
In anticipation of a civil disturbance, and acting upon reports received by the Capital Regional Command
(CAPCOM) that the rallyists would proceed to Mendiola to break through the police lines and rush towards
Malacañang, CAPCOM Commander General Ramon E. Montaño inspected the preparations and adequacy of the
government forces to quell impending attacks.
OPLAN YELLOW (Revised) was put into effect. Task Force Nazareno under the command of Col. Cesar
Nazareno was deployed at the vicinity of Malacañang. The civil disturbance control units of the Western Police
District under Police Brigadier General Alfredo S. Lim were also activated.
Intelligence reports were also received that the KMP was heavily infiltrated by CPP/NPA elements and that an
insurrection was impending. The threat seemed grave as there were also reports that San Beda College and
Centro Escolar University would be forcibly occupied.
In its report, the Citizens' Mendiola Commission (a body specifically tasked to investigate the facts surrounding
the incident, Commission for short) stated that the government anti-riot forces were assembled at Mendiola in a
formation of three phalanges, in the following manner:
"(1) The first line was composed of policemen from police stations Nos. 3, 4, 6, 7, 8, 9 and 10
and the Chinatown detachment of the Western Police District. Police Colonel Edgar Dula
Torres, Deputy Superintendent of the Western Police District, was designated as ground
commander of the CDC first line of defense. The WPD CDC elements were positioned at the
intersection of Mendiola and Legarda Streets after they were ordered to move forward from the
top of Mendiola bridge. The WPD forces were in khaki uniform and carried the standard CDC
equipment — aluminum shields, truncheons and gas masks.
(2) At the second line of defense about ten (10) yards behind the WPD policemen were the
elements of the Integrated National Police (INP) Field Force stationed at Fort Bonifacio from the
61st and 62nd INP Field Force, who carried also the standard CDC equipment — truncheons,
shields and gas masks. The INP Field Force was under the command of Police Major Demetrio
dela Cruz.
(3) Forming the third line was the Marine Civil Disturbance Control Battalion composed of the
first and second companies of the Philippine Marines stationed at Fort Bonifacio. The marines
were all equipped with shields, truncheons and M-16 rifles (armalites) slung at their
backs, under the command of Major Felimon B. Gasmin. The Marine CDC Battalion was
positioned in line formation ten (10) yards farther behind the INP Field Force.
At the back of the marines were four (4) 6 x 6 army trucks, occupying the entire width of
Mendiola street, followed immediately by two water cannons, one on each side of the street
and eight fire trucks, four trucks on each side of the street. The eight fire trucks from Fire
District I of Manila under Fire Superintendent Mario C. Tanchanco, were to supply water to the
two water cannons.
Stationed farther behind the CDC forces were the two Mobile Dispersal Teams (MDT) each
composed of two tear gas grenadiers, two spotters, an assistant grenadier, a driver and the
team leader.
In front of the College of the Holy Spirit near Gate 4 of Malacañang stood the VOLVO Mobile
Communications Van of the Commanding General of CAPCOM/INP, General Ramon E.
Montaño. At this command post, after General Montaño had conferred with TF Nazareno
Commander, Colonel Cezar Nazareno, about the adequacy and readiness of his forces, it was
agreed that Police General Alfredo S. Lim would designate Police Colonel Edgar Dula
Torres and Police Major Conrado Francisco as negotiators with the marchers. Police General
Lim then proceeded to the WPD CDC elements already positioned at the foot of Mendiola
bridge to relay to Police Colonel Torres and Police Major Francisco the instructions that the
latter would negotiate with the marchers." 5 (Emphasis supplied)
The marchers, at around 4:30 p.m., numbered about 10,000 to 15,000. From C.M. Recto Avenue, they proceeded
toward the police lines. No dialogue took place between the marchers and the anti-riot squad. It was at this
moment that a clash occurred and, borrowing the words of the Commission "pandemonium broke loose". The
Commission stated in its findings, to wit:
". . . There was an explosion followed by throwing of pillboxes, stones and bottles. Steel bars,
wooden clubs and lead pipes were used against the police. The police fought back with their
shields and truncheons. The police line was breached. Suddenly shots were heard. The
demonstrators disengaged from the government forces and retreated towards C.M. Recto
Avenue. But sporadic firing continued from the government forces.

After the firing ceased, two MDTs headed by Lt. Romeo Paguinto and Lt. Laonglaan Goce sped
towards Legarda Street and lobbed tear gas at the remaining rallyist still grouped in the vicinity
of Mendiola. After dispersing the crowd, the two MDTs, together with the two WPD MDTs,
proceeded to Liwasang Bonifacio upon order of General Montaño to disperse the rallyists
assembled thereat. Assisting the MDTs were a number of policemen from the WPD, attired in
civilian clothes with white head bands, who were armed with long firearms." 6 (Emphasis ours)
After the clash, twelve (12) marchers were officially confirmed dead, although according to Tadeo, there were
thirteen (13) dead, but he was not able to give the name and address of said victim. Thirty-nine (39) were
wounded by gunshots and twelve (12) sustained minor injuries, all belonging to the group of the marchers.
Of the police and military personnel, three (3) sustained gunshot wounds and twenty (20) suffered minor physical
injuries such as abrasions, contusions and the like.
In the aftermath of the confrontation, then President Corazon C. Aquino issued Administrative Order No.
11, 7 (A.O. 11, for brevity) dated January 22, 1987, which created the Citizens' Mendiola Commission. The body
was composed of retired Supreme Court Justice Vicente Abad Santos as Chairman, retired Supreme Court
Justice Jose Y. Feria and Mr. Antonio U. Miranda, both as members. A.O. 11 stated that the Commission was
created precisely for the "purpose of conducting an investigation of the disorder, deaths, and casualties that took
place in the vicinity of Mendiola Bridge and Mendiola Street and Claro M. Recto Avenue, Manila, in the afternoon
of January 22, 1987". The Commission was expected to have submitted its findings not later than February 6,
1987. But it failed to do so. Consequently, the deadline was moved to February 16, 1987 by Administrative Order
No. 13. Again, the Commission was unable to meet this deadline. Finally, on February 27, 1987, it submitted its
report, in accordance with Administrative Order No. 17, issued on February 11, 1987.
In its report, the Commission recapitulated its findings, to wit:
"(1) The march to Mendiola of the KMP led by Jaime Tadeo, together with the other sectoral
groups, was not covered by any permit as required under Batas Pambansa Blg. 880, the Public
Assembly Act of 1985, in violation of paragraph (a) Section 13, punishable under paragraph (a),
Section 14 of said law.
(2) The crowd dispersal control units of the police and the military were armed with .38 and .45
caliber handguns, and M-16 armalites, which is a prohibited act under paragraph 4(g), Section
13, and punishable under paragraph (b), Section 14 of Batas Pambansa Blg. 880.
(3) The security men assigned to protect the WPD, INP Field Force, the Marines and
supporting military units, as well as the security officers of the police and military commanders
were in civilian attire in violation of paragraph (a), Section 10, Batas Pambansa 880.
(4) There was unnecessary firing by the police and military crowd dispersal control units in
dispersing the marchers, a prohibited act under paragraph (e), Section 13, and punishable
under paragraph (b), Section 14, Batas Pambansa Blg. 880.
(5) The carrying and use of steel bars, pillboxes, darts, lead pipe, wooden clubs with spikes,
and guns by the marchers as offensive weapons are prohibited acts punishable under
paragraph (g), Section 13, and punishable under paragraph (e), Section 14 of Batas Pambansa
Blg. 880.
(6) The KMP farmers broke off further negotiations with the MAR officials and were determined
to march to Malacañang, emboldened as they are, by the inflammatory and incendiary
utterances of their leader, Jaime Tadeo — "bubutasin namin ang barikada. Dadanak and
dugo . . . Ang nagugutom na magsasaka ay gagawa ng sariling butas . . ."
(7) There was no dialogue between the rallyists and the government forces. Upon approaching
the intersections of Legarda and Mendiola, the marchers began pushing the police lines and
penetrated and broke through the first line of the CDC contingent.
(8) The police fought back with their truncheons and shields. They stood their ground but the
CDC line was breached. There ensued gunfire from both sides. It is not clear who started the
firing.
(9) At the onset of the disturbance and violence, the water cannons and tear gas were not put
into effective use to disperse the rioting crowd.
(10) The water cannons and fire trucks were not put into operation because (a) there was no
order to use them; (b) they were incorrectly prepositioned; and (c) they were out of range of the
marchers.
(11) Tear gas was not used at the start of the disturbance to disperse the rioters. After the
crowd had dispersed and the wounded and dead were being carried away, the MDTs of the
police and the military with their tear gas equipment and components conducted dispersal
operations in the Mendiola area and proceeded to Liwasang Bonifacio to disperse the remnants
of the marchers.
(12) No barbed wire barricade was used in Mendiola but no official reason was given for its
absence." 8
From the results of the probe, the Commission recommended 9 the criminal prosecution of four unidentified,
uniformed individuals, shown either on tape or in pictures, firing at the direction of the marchers. In connection
with this, it was the Commission's recommendation that the National Bureau of Investigation (NBI) be tasked to
undertake investigations regarding the identities of those who actually fired their guns that resulted in the death of
or injury to the victims of the incident. The Commission also suggested that all the commissioned officers of both
the Western Police District and the INP Field Force, who were armed during the incident, be prosecuted for
violation of paragraph 4(g) of Section 13, Batas Pambansa Blg. 880, the Public Assembly Act of 1985. The
Commission's recommendation also included the prosecution of the marchers, for carrying deadly or offensive
weapons, but whose identities have yet to be established. As for Jaime Tadeo, the Commission said that he
should be prosecuted both for violation of paragraph (a), Section 13, Batas Pambansa Blg. 880 for holding the
rally without a permit and for violation of Article 142, as amended, of the Revised Penal Code for inciting to
sedition. As for the following officers, namely: (1) Gen. Ramon E. Montaño; (2) Police Gen. Alfredo S. Lim; (3)
Police Gen. Edgar Dula Torres; (4) Police Maj. Demetrio dela Cruz; (5) Col. Cezar Nazareno; and (5) Maj.
Felimon Gasmin, for their failure to make effective use of their skill and experience in directing the dispersal
operations in Mendiola, administrative sanctions were recommended to be imposed. LLpr
The last and the most significant recommendation of the Commission was for the deceased and wounded victims
of the Mendiola incident to be compensated by the government. It was this portion that petitioners (Caylao group)
invoke in their claim for damages from the government.
Notwithstanding such recommendation, no concrete form of compensation was received by the victims. Thus, on
July 27, 1987, herein petitioners, (Caylao group) filed a formal letter of demand for compensation from the
Government. 10 This formal demand was indorsed by the office of the Executive Secretary to the Department of
Budget and Management (DBM) on August 13, 1987. The House Committee on Human Rights, on February 10,
1988, recommended the expeditious payment of compensation to the Mendiola victims. 11
After almost a year, on January 20, 1988, petitioners (Caylao group) were constrained to institute an action for
damages against the Republic of the Philippines, together with the military officers, and personnel involved in the
Mendiola incident, before the trial court. The complaint was docketed as Civil Case No. 88-43351.
On February 23, 1988, the Solicitor General filed a Motion to Dismiss on the ground that the State cannot be sued
without its consent. Petitioners opposed said motion on March 16, 1988, maintaining that the State has waived its
immunity from suit and that the dismissal of the instant action is contrary to both the Constitution and the
International Law on Human Rights.
Respondent Judge Sandoval, in his first questioned Order, dismissed the complaint as against the Republic of the
Philippines on the ground that there was no waiver by the State. Petitioners (Caylao group) filed a Motion for
Reconsideration therefrom, but the same was denied by respondent judge in his Order dated August 8, 1988.
Consequently, Caylao and her co-petitioners filed the instant petition.
On the other hand, the Republic of the Philippines, together with the military officers and personnel impleaded as
defendants in the court below, filed its petition for certiorari.
Having arisen from the same factual beginnings and raising practically identical issues, the two (2) petitions were
consolidated and will therefore be jointly dealt with and resolved in this Decision.
The resolution of both petitions revolves around the main issue of whether or not the State has waived its
immunity from suit.
Petitioners (Caylao group) advance the argument that the State has impliedly waived its sovereign immunity from
suit. It is their considered view that by the recommendation made by the Commission for the government to
indemnify the heirs and victims of the Mendiola incident and by the public addresses made by then President
Aquino in the aftermath of the killings, the State has consented to be sued.
Under our Constitution the principle of immunity of the government from suit is expressly provided in Article XVI,
Section 3. The principle is based on the very essence of sovereignty, and on the practical ground that there can
be no legal right as against the authority that makes the law on which the right depends. 12It also rests on
reasons of public policy — that public service would be hindered, and the public endangered, if the sovereign
authority could be subjected to law suits at the instance of every citizen and consequently controlled in the uses
and dispositions of the means required for the proper administration of the government. 13

This is not a suit against the State with its consent.


Firstly, the recommendation made by the Commission regarding indemnification of the heirs of the deceased and
the victims of the incident by the government does not in any way mean that liability automatically attaches to the
State. It is important to note that A.O. 11 expressly states that the purpose of creating the Commission was to
have a body that will conduct an "investigation of the disorder, deaths and casualties that took place." 14 In the
exercise of its functions, A.O. 11 provides guidelines, and what is relevant to Our discussion reads:
"1. Its conclusions regarding the existence of probable cause for the commission of any offense
and of the persons probably guilty of the same shall be sufficient compliance with the rules on
preliminary investigation and the charges arising therefrom may be filed directly with the proper
court." 15
In effect, whatever may be the findings of the Commission, the same shall only serve as the cause of action in the
event that any party decides to litigate his/her claim. Therefore, the Commission is merely a preliminary venue.
The Commission is not the end in itself. Whatever recommendation it makes cannot in any way bind the State
immediately, such recommendation not having become final and executory. This is precisely the essence of it
being a fact-finding body.
Secondly, whatever acts or utterances that then President Aquino may have done or said, the same are not
tantamount to the State having waived its immunity from suit. The President's act of joining the marchers, days
after the incident, does not mean that there was an admission by the State of any liability. In fact to borrow the
words of petitioners (Caylao group), "it was an act of solidarity by the government with the people". Moreover,
petitioners rely on President Aquino's speech promising that the government would address the grievances of the
rallyists. By this alone, it cannot be inferred that the State has admitted any liability, much less can it be inferred
that it has consented to the suit.
Although consent to be sued may be given impliedly, still it cannot be maintained that such consent was given
considering the circumstances obtaining in the instant case.
Thirdly, the case does not qualify as a suit against the State.
Some instances when a suit against the State is proper are: 16
(1) When the Republic is sued by name;
(2) When the suit is against an unincorporated government agency;
(3) When the suit is on its face against a government officer but the case is such that ultimate
liability will belong not to the officer but to the government.
While the Republic in this case is sued by name, the ultimate liability does not pertain to the government.
Although the military officers and personnel, then party defendants, were discharging their official functions when
the incident occurred, their functions ceased to be official the moment they exceeded their authority. Based on the
Commission findings, there was lack of justification by the government forces in the use of firearms. 17 Moreover,
the members of the police and military crowd dispersal units committed a prohibited act under B.P. Blg. 880 18 as
there was unnecessary firing by them in dispersing the marchers. 19
As early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea that he is a public
agent acting under the color of his office when his acts are wholly without authority. 20 Until recently in
1991, 21 this doctrine still found application, this Court saying that immunity from suit cannot institutionalize
irresponsibility and non-accountability nor grant a privileged status not claimed by any other official of
the Republic. The military and police forces were deployed to ensure that the rally would be peaceful and orderly
as well as to guarantee the safety of the very people that they are duty-bound to protect. However, the facts as
found by the trial court showed that they fired at the unruly crowd to disperse the latter.
While it is true that nothing is better settled than the general rule that a sovereign state and its political
subdivisions cannot be sued in the courts except when it has given its consent, it cannot be invoked by both the
military officers to release them from any liability, and by the heirs and victims to demand indemnification from the
government. The principle of state immunity from suit does not apply, as in this case, when the relief demanded
by the suit requires no affirmative official action on the part of the State nor the affirmative discharge of any
obligation which belongs to the State in its political capacity,even though the officers or agents who are made
defendants claim to hold or act only by virtue of a title of the state and as its agents and servants. 22 This Court
has made it quite clear that even a "high position in the government does not confer a license to persecute or
recklessly injure another." 23
The inescapable conclusion is that the State cannot be held civilly liable for the deaths that followed the incident.
Instead, the liability should fall on the named defendants in the lower court. In line with the ruling of this court
in Shauf vs. Court of Appeals, 24 herein public officials, having been found to have acted beyond the scope of
their authority, may be held liable for damages.
WHEREFORE, finding no reversible error and no grave abuse of discretion committed by respondent Judge in
issuing the questioned orders, the instant petitions are hereby DISMISSED.
SO ORDERED.
Narvasa, C . J ., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Bellosillo,
Melo and Quiason, JJ., concur.
Gutierrez, Jr., J., on terminal leave.
||| (Republic v. Sandoval, G.R. No. 84607, 84645, [March 19, 1993])

FIRST DIVISION

[G.R. No. L-1648. August 17, 1949.]

PEDRO SYQUIA, GONZALO SYQUIA, and LEOPOLDO SYQUIA, petitioners, vs.


NATIVIDAD ALMEDA LOPEZ, Judge of Municipal Court of Manila, CONRADO V.
SANCHEZ, Judge of Court of First Instance of Manila, GEORGE F. MOORE ET
AL., respondents.

Gibbs, Gibbs, Chuidian & Quasha for petitioners.


J. A. Wolfson for respondent.

SYLLABUS

1. COURTS; JURISDICTIONS; CLAIM OF TITLE AND POSSESSION OF PROPERTY BY PRIVATE


CITIZEN; AGAINST OFFICERS AND AGENTS OF THE GOVERNMENT. — A private citizen claiming title and
right of possession of a certain property may, to recover possession of said property, sue as individuals, officers
and agents of the Government who are said to be illegally withholding the same from him, though in doing so,
said officers and agents claim that they are acting for the Government, and the courts may entertain such a suit
although the Government itself is not included as a party-defendant.
2. ID.; ID.; ID.; IF JUDGMENT WILL INVOLVE FINANCIAL LIABILITY OF GOVERNMENT, SUIT
CANNOT PROSPER OR BE ENTERTAINED EXCEPT WITH GOVERNMENT'S CONSENT. — But where the
judgment in the suit by the private citizen against the officers and agents of the government would result not
only in the recovery of possession of property in favor of said citizen but also in a charge against or financial
liability to the Government, then the suit should be regarded as one against the Government itself, and,
consequently, it cannot prosper or be entertained by courts except with the consent of said government
3. ID.; ID.; SUIT BY CITIZEN AGAINST FOREIGN GOVERNMENT WITHOUT LATTER'S CONSENT;
COURTS LACK OF JURISDICTION. — This is not only a case of a citizen filing a suit against his own
Government without the latter's consent but it is of citizen filing an action against a foreign government without
said government's consent, which renders more obvious the lack of jurisdiction of the courts of his country.

DECISION

MONTEMAYOR, J p:
For the purposes of this decision, the following facts gathered from and based on the pleadings, may
be stated. The plaintiffs named Pedro, Gonzalo, and Leopoldo, all surnamed Syquia, are the undivided joint
owners of three apartment buildings situated in the City of Manila known as the North Syquia Apartments,
South Syquia Apartments and Michel Apartments located at 1131 M. H. del Pilar, 1151 M. H. del Pilar and
1188 A. Mabini Streets, respectively.
About the middle of the year 1945, said plaintiffs executed three lease contracts, one for each of the
three apartments, in favor of the United States of America at a monthly rental of P1,775 for the
North Syquia Apartments, P1,890 for the South Syquia Apartments, and P3,335 for the Michel Apartments.
The term or period for the three leases was to be "for the duration of the war and six months thereafter,
unless sooner terminated by the United States of America." The apartment buildings were used for billeting
and quartering officers of the U. S. armed forces stationed in the Manila area.
In March, 1947, when these court proceedings were commenced, George F. Moore was the
Commanding General, United States Army, Philippine Ryukus Command, Manila, and as Commanding
General of the U. S. Army in the Manila Theatre, was said to control the occupancy of the said apartment
houses and had authority in the name of the United States Government to assign officers of the U. S. Army to
said apartments or to order said officers to vacate the same. Erland A. Tillman was the Chief, Real Estate
Division, Office of the District Engineers, U. S. Army, Manila, who, under the command of defendant Moore
was in direct charge and control of the lease and occupancy of said three apartment buildings. Defendant
Moore and Tillman themselves did not occupy any part of the premises in question.
Under the theory that said leases terminated six months after September 2, 1945, when Japan
surrendered, plaintiffs sometime in March, 1946, approached the predecessors in office of defendants Moore
and Tillman and requested the return of the apartment buildings to them, but they were advised that the U. S.
Army wanted to continue occupying the premises. On May 11, 1946, said plaintiffs requested the
predecessors in office of Moore and Tillman to renegotiate said leases, execute lease contracts for a period of
three years and to pay a reasonable rental higher than those payable under the old contracts. The
predecessor in office of Moore in a letter dated June 6, 1946, refused to execute new leases but advised that
"it is contemplated that the United States Army will vacate subject properties prior to 1 February 1947." Not
being in conformity with the continuance of the old leases because of the alleged comparatively low rentals
being paid thereunder, plaintiffs formally requested Tillman to cancel said three leases and to release the
apartment buildings on June 28, 1946. Tillman refused to comply with the request. Because of the alleged
representation and assurance that the U. S. Government would vacate the premises before February 1, 1947,
the plaintiffs took no further steps to secure possession of the buildings and accepted the monthly rentals
tendered by the predecessors in office of Moore and Tillman on the basis of a month to month lease subject
to cancellation upon thirty days notice. Because of the failure to comply with the alleged representation and
assurance that the three apartment buildings will be vacated prior to February 1, 1947, plaintiffs on February
17, 1947, served formal notice upon defendants Moore and Tillman and 64 other army officers or members of
the United States Armed Forces who were then occupying apartments in said three buildings, demanding (a)
cancellation of said leases; (b) increase in rentals to P300 per month per apartment effective thirty days from
notice; (c) execution of new leases for the three or any one or two of the said apartment buildings for a
definite term, otherwise, (d) release of said apartment buildings within thirty days of said notice in the event of
the failure to comply with the foregoing demands. The thirty-day period having expired without any of the
defendants having complied with plaintiffs' demands, the plaintiffs commenced the present action in the
Municipal Court of Manila in the form of an action for unlawful detainer (desahucio) against Moore and Tillman
and the 64 persons occupying apartments in the three buildings for the purpose of having them vacate the
apartments, each occupant to pay P300 a month for his particular apartment from January 1, 1947 until each
of said particular defendant had vacated said apartment; to permit plaintiffs access to said apartment
buildings for the purpose of appraising the damages sustained as the result of the occupancy by defendants;
that defendants be ordered to pay plaintiffs whatever damages may have been actually caused on said
property; and that in the event said occupants are unable to pay said P300 a month and/or the damages
sustained by said property, the defendants Moore and Tillman jointly and severally be made to pay said
monthly rentals of P300 per month per apartment from January 1, 1947 to March 19, 1947, inclusive, and/or
the damages sustained by said apartments, and that defendants Moore and Tillman be permanently enjoined
against ordering any additional parties in the future from entering and occupying said premises.
Acting upon a motion to dismiss filed through the Special Assistant of the Judge Advocate, Philippine
Ryukus Command on the ground that the court had no jurisdiction over the defendants and over the subject
matter of the action, because the real party in interest was the U. S. Government and not the individual
defendants named in the complaint, and that the complaint did not state a cause of action, the municipal court
of Manila in an order dated April 29, 1947, found that the war between the United States of America and her
allies on one side and Germany and Japan on the other, had not yet terminated and, consequently, the period
or term of the three leases had not yet expired; that under the well settled rule of International Law, a foreign
government like the United States Government cannot be sued in the courts of another state without its
consent; that it was clear from the allegations of the complaint that although the United States of America has
not been named therein as defendant, it is nevertheless the real defendant in this case, as the parties named
as defendants are officers of the United States Army and were occupying the buildings in question as such
and pursuant to orders received from that Government. The municipal court dismissed the action with costs
against the plaintiffs with the suggestion or opinion that a citizen of the Philippines, who feels aggrieved by the
acts of the Government of a foreign country has the right to demand that the Philippine Government study his
claim and if found meritorious, take such diplomatic steps as may be necessary for the vindication of the
rights of that citizen, and that the matter included or involved in the action should be a proper subject matter
of representations between the Government of the United States of America and the Philippines. Not being
satisfied with the order, plaintiffs appealed to the Court of First Instance of Manila, where the motion to
dismiss was renewed.
The Court of First Instance of Manila in an order dated July 12, 1947, affirmed the order of the
municipal court dismissing plaintiffs' complaint. It conceded that under the doctrine laid down in the case of U.
S. vs. Lee, 106 U. S., 196 and affirmed in the case of Tindal vs. Wesley, 167 U. S., 204, ordinarily, courts
have jurisdiction over cases where private parties sue to recover possession of property being held by officers
or agents acting in the name of the U. S. Government even though no suit can be brought against the
Government itself, but inasmuch as the plaintiffs in the present case are bringing this action against officers
and agents of the U. S. Government not only to recover the possession of the three apartment houses
supposedly being held illegally by them in the name of their government, but also to collect back rents, not
only at the rate agreed upon in the lease contracts entered into by the United States of America but in excess
of said rate, to say nothing of the damages claimed, as a result of which, a judgment in these proceedings
may become a charge against the U. S. Treasury, then under the rule laid down in the case of Land vs.
Dollar, 91 Law. ed., 1209, the present suit must be regarded as one against the United States Government
itself, which cannot be sued without its consent, specially by citizens of another country.
The plaintiffs as petitioners have brought this case before us on a petition for a writ of mandamus
seeking to order the Municipal Court of Manila to take jurisdiction over the case. On October 30, 1947,
counsel for respondents Almeda Lopez, Sanchez, Moore and Tillman filed a motion to dismiss on several
grounds. The case was orally argued on November 26, 1947. On March 4, 1948, petitioners filed a petition
which, among other things, informed this Court that the North Syquia Apartments, the
South Syquia Apartments and Michel Apartments would be vacated by their occupants on February 29,
March 31, and May 31, 1948, respectively. As a matter of fact, said apartments were actually vacated on the
dates already mentioned and were received by the plaintiffs-owners.
On the basis of this petition and because of the return of the three apartment houses to the owners,
counsel for respondents Almeda Lopez, Sanchez, Moore and Tillman filed a petition to dismiss the present
case on the ground that it is moot. Counsel for the petitioners answering the motion, claimed that the plaintiffs
and petitioners accepted possession of the three apartment houses, reserving all of their rights against
respondents including the right to collect rents and damages; that they have not been paid rents since
January 1, 1947; that respondents admitted that there is a total of P109,895 in rentals due and owing to
petitioners; that should this case be now dismissed, the petitioners will be unable to enforce collection; that
the question of law involved in this case may again come up before the courts when conflicts arise between
Filipino civilian property owners and the U. S. Army authorities concerning contracts entered into in the
Philippines between said Filipinos and the U. S. Government. Consequently, this Court, according to the
petitioners, far from dismissing the case, should decide it, particularly the question of jurisdiction.
On June 18, 1949, through a "petition to amend complaint" counsel for the petitioners informed this
court that petitioners had already received from the U. S. Army Forces in the Western Pacific the sum of
P109,895 as rentals for the three apartments, but with the reservation that said acceptance should not be
construed as jeopardizing the rights of the petitioners in the case now pending in the courts of the Philippines
or their rights against the U. S. Government with respect to the three apartment houses. In view of this last
petition, counsel for respondents alleging that both respondents Moore and Tillman had long left the Islands
for other Army assignments, and now that both the possession of the three apartments in question as well as
the rentals for their occupation have already been received by the petitioners renew their motion for dismissal
on the ground that this case has now become moot.
The main purpose of the original action in the municipal court was to recover the possession of the
three apartment houses in question. The recovery of rentals as submitted by the very counsel for the
petitioners was merely incidental to the main action. Because the prime purpose of the action had been
achieved, namely, the recovery of the possession of the premises, apart from the fact that the rentals
amounting to P109,895 had been paid to the petitioners and accepted by them though under reservations,
this Court may now well dismiss the present proceedings on the ground that the questions involved therein
have become academic and moot. Counsel for the petitioners however, insists that a decision be rendered on
the merits, particularly on the question of jurisdiction of the municipal court over the original action, not only
for the satisfaction of the parties involved but also to serve as a guide in future cases involving cases of
similar nature such as contracts of lease entered into between the Government of the United States of
America on one side and Filipino citizens on the other regarding properties of the latter. We accept the
suggestion of petitioners and shall proceed to discuss the facts and law involved and rule upon them.
We shall concede as correctly did the Court of First Instance, that following the doctrine laid down in
the cases of U. S. vs. Lee and U. S. vs. Tindal,supra, a private citizen claiming title and right of possession of
a certain property may, to recover possession of said property, sue as individuals, officers and agents of the
Government who are said to be illegally withholding the same from him, though in doing so, said officers and
agents claim that they are acting for the Government, and the courts may entertain such a suit altho the
Government itself is not included as a party-defendant. Of course, the Government is not bound or concluded
by the decision. The philosophy of this ruling is that unless the courts are permitted to take cognizance and to
assume jurisdiction over such a case, a private citizen would be helpless and without redress and protection
of his rights which may have been invaded by the officers of the government professing to act in its name. In
such a case the officials or agents asserting rightful possession must prove and justify their claim before the
courts, when it is made to appear in the suit against them that the title and right of possession is in the private
citizen. However, and this is important, where the judgment in such a case would result not only in the
recovery of possession of the property in favor of said citizen but also in a charge against or financial liability
to the Government, then the suit should be regarded as one against the government itself, and, consequently,
it cannot prosper or be validly entertained by the courts except with the consent of said Government.
(See case of Land vs. Dollar, 91 Law. ed., 1209.)
From a careful study of this case, considering the facts involved therein as well as those of public
knowledge of which we take judicial cognizance, we are convinced that the real party in interest as defendant
in the original case is the United States of America. The lessee in each of the three lease agreements was the
United States of America and the lease agreements themselves were executed in her name by her officials
acting as her agents. The consideration or rentals was always paid by the U. S. Government. The original
action in the municipal court was brought on the basis of these three lease contracts and it is obvious in the
opinion of this court that any back rentals or increased rentals will have to be paid by the U. S. Government
not only because, as already stated, the contracts of lease were entered into by such Government but also
because the premises were used by officers of her armed forces during the war and immediately after the
termination of hostilities.
We cannot see how the defendants and respondents Moore and Tillman could be held individually
responsible for the payment of rentals or damages in relation to the occupancy of the apartment houses in
question. Both of these army officials had no intervention whatsoever in the execution of the lease
agreements nor in the initial occupancy of the premises both of which were effected thru the intervention of
and at the instance of their predecessors in office. The original request made by the petitioners for the return
of the apartment buildings after the supposed termination of the leases, was made to, and denied not by
Moore and Tillman but by their predecessors in office. The notice and decision that the U. S. Army wanted
and in fact continued to occupy the premises was made not by Moore and Tillman but by their predecessors
in office. The refusal to renegotiate the leases as requested by the petitioners was made not by Moore but by
his predecessors in office according to the very complaint filed in the municipal court. The assurance that the
U. S. Army will vacate the premises prior to February 29, 1947, was also made by the predecessors in office
of Moore.
As to the defendant Tillman, according to the complaint he was Chief, Real Estate Division, Office of
the District Engineer, U.S. Army, and was in direct charge and control of the leases and occupancy of the
apartment buildings, but he was under the command of defendant Moore, his superior officer. We cannot see
how said defendant Tillman in assigning new officers to occupy apartments in the three buildings, in
obedience to order or direction from his superior, defendant Moore, could be held personally liable for the
payment of rentals or increase thereof, or damages said to have been suffered by the plaintiffs.
With respect to defendant General Moore, when he assumed his command in Manila, these lease
agreements had already been negotiated and executed and were in actual operation. The three apartment
buildings were occupied by army officers assigned thereto by his predecessors in office. All that he must have
done was to assign or billet incoming army officers to apartments as they were vacated by outgoing officers
due to changes in station. He found these apartment buildings occupied by his government and devoted to
the use and occupancy of army officers stationed in Manila under his command, and he had reason to believe
that he could continue holding and using the premises theretofore assigned for that purpose and under
contracts previously entered into by his government, as long as and until orders to the contrary were received
by him. It is even to be presumed that when demand was made by the plaintiffs for the payment of increased
rentals or for vacating the three apartment buildings, defendant Moore, not a lawyer by profession but a
soldier, must have consulted and sought the advise of his legal department, and that his action in declining to
pay the increased rentals or to eject all his army officers from the three buildings must have been in
pursuance to the advice and counsel of his legal division. At least, he was not in a position to pay increased
rentals above those set and stipulated in the lease agreements, without the approval of his government,
unless he personally assumed financial responsibility therefor. Under these circumstances, neither do we
believe nor find that defendant Moore can be held personally liable for the payment of back or increased
rentals and alleged damages.
As to the army officers who actually occupied the apartments involved, there is less reason for
holding them personally liable for rentals and supposed damages as sought by the plaintiffs. It must be
remembered that these army officers when coming to their station in Manila were not given the choice of their
dwellings. They were merely assigned quarters in the apartment buildings in question. Said assignments or
billets may well be regarded as orders, and all that those officers did was to obey them, and, accordingly,
occupied the rooms assigned to them. Under such circumstances, can it be supposed or conceived that such
army officers would first inquire whether the rental being paid by their government for the rooms or
apartments assigned to them by order of their superior officer was fair and reasonable or not, and whether the
period of lease between their government and the owners of the premises had expired, and whether their
occupancy of their rooms or apartments was legal or illegal? And if they dismissed these seemingly idle
speculations, assuming that they ever entered their minds, and continued to live in their apartments unless
and until orders to the contrary were received by them, could they later be held personally liable for any back
rentals which their government may have failed to pay to the owners of the buildings, or for any damages to
the premises incident to all leases of property, specially in the absence of proof that such damages to
property had been caused by them and not by the previous occupants, also army officers who are not now
parties defendant to this suit? Incidentally it may be stated that both defendants Moore and Tillman have long
left these Islands to assume other commands or assignments and in all probability none of their 64 co-
defendants is still within this jurisdiction.
On the basis of the foregoing considerations we are of the belief and we hold that the real party
defendant in interest is the Government of the United States of America; that any judgment for back or
increased rentals or damages will have to be paid not by defendants Moore and Tillman and their 64 co-
defendants but by the said U.S. Government. On the basis of the ruling in the case of Land vs. Dollar already
cited, and on what we have already stated, the present action must be considered as one against the U.S.
Government. It is clear that the courts of the Philippines including the Municipal Court of Manila have no
jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was raised and
interposed at the very beginning of the action. The U.S. Government has not given its consent to the filing of
this suit which is essentially against her, though not in name. Moreover, this is not only a case of a citizen
filing a suit against his own Government without the latter's consent but it is of citizen filing an action against a
foreign government without said government's consent, which renders more obvious the lack of jurisdiction of
the courts of his country. The principles of law behind this rule are so elementary and of such general
acceptance that we deem it unnecessary to cite authorities in support thereof.
In conclusion we find that the Municipal Court of Manila committed no error in dismissing the case for
lack of jurisdiction and that the Court of First Instance acted correctly in affirming the municipal court's order
of dismissal. Case dismissed, without pronouncements as to costs.
Moran, C.J., Paras, Feria, Bengzon, Tuason and Reyes, JJ., concur.

Separate Opinions

PERFECTO, J., dissenting:


The petition must be granted. This is the conclusion we have arrived at long ago, soon after this case
had been submitted for our decision. We regret that, to avoid further delay in the promulgation of the decision
in this case, we are constrained to limit ourselves to a synthesis of the reasons for our stand. So that this
opinion may be released immediately, we are making it as short as possible. To said effect we have to waive
the opportunity of elaborating on our arguments.
We are of the opinion that both the municipal court and the Court of First Instance of Manila erred in
dismissing petitioners' complaint and the majority of the Supreme Court have given their exequatur to such
grievous error.
There is no question that the Municipal Court of Manila had and has complete jurisdiction to take
cognizance of and decide the case initiated by petitioners. That jurisdiction is the same whether the true
defendants are those specifically mentioned in the complaint or the Government of the United States.
The contention that the Government of the United States of America is the real party defendant does
not appear to be supported either by the pleadings or by the text of the contract of lease in question. If said
government is the real party defendant and had intended to impugn the jurisdiction of the Municipal Court of
Manila, it must have done so through its diplomatic representative in the Philippines, i. e., the American
Ambassador. It does not appear that the American Ambassador had intervened in the case in any way and
we believe no one appearing in the case has the legal personality to represent said government.
In the hypothesis that the Government of the United States of America is the lessee in the contract in
question and, therefore, should be considered as the real party defendant in the ejectment case, that simple
fact does not deprive our courts of justice of their jurisdiction to try any legal litigation relating to said contract
of lease. The very fact that the government of the United States of America had entered into a private contract
with private citizens of the Philippines and the deed executed in our country concerns real property located in
Manila, places said government, for purposes of the jurisdiction of our courts, on the same legal level of the
lessors.
Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice,
such rule is inapplicable to cases in which the foreign government enters into private contracts with the
citizens of the court's jurisdiction. A contrary view would simply run against all principles of decency and
violative of all tenets of morals.
Moral principles and principles of justice are as valid and applicable as well with regard to private
individuals as with regard to governments either domestic or foreign. Once a foreign government enters into a
private contract with the private citizens of another country, such foreign government cannot shield its non-
performance or contravention of the terms of the contract under the cloak of non- jurisdiction. To place such
foreign government beyond the jurisdiction of the domestic courts is to give approval to the execution of
unilateral contracts, graphically described in Spanish as "contratos leoninos," because one party gets the
lion's share to the detriment of the other. To give validity to such contract is to sanctify bad faith, deceit, fraud.
We prefer to adhere to the thesis that all parties in a private contract, including governments and the most
powerful of them, are amenable to law, and that such contracts are enforceable through the help of the courts
of justice with jurisdiction to take cognizance of any violation of such contracts if the same had been entered
into only by private individuals.
To advance the proposition that the Government of the United States of America, soon after liberating
the Philippines from the invading Japanese forces, had entered with the petitioners into the lease contract in
question with the knowledge that petitioners could not bring an action in our courts of justice to enforce the
terms of said contract is to hurl against said government the blackest indictment. Under such situation, all the
vociferous avowals of adherence to the principles of justice, liberty, democracy, of said Government would
appear as sham. We cannot believe that the Government of the United States of America can in honest
conscience support the stand of respondents in this case. We cannot believe that said government is so
callous as not to understand the meaning of the shame entailed in the legal stand of non-jurisdiction intended
to place said government beyond the reach of our courts of justice.
||| (Syquia v. Lopez, G.R. No. L-1648, [August 17, 1949], 84 PHIL 312-326)

EN BANC

[G.R. No. L-5156. Marzo 11, 1954.]


CARMEN FESTEJO, demandante y apelante, contra ISAIAS FERNANDO, Director de
Obras Públicas, demandado y apelado.

D. Eloy B. Bello en representacion de la apelante.


El Procurador General Sr. Pompeyo Díaz y el Procurador Sr. Antonio A. Torres en representacion del
apelado.

SYLLABUS

PRACTICA FORENSE; ACCION CONTRA UN FUNCIONARIO PUBLICO POR DAÑOS Y


PERJUICIOS. — La acción contra el demandado como Director de Obras Públicas encargado y responsable
de la construcción de los sistemas de irrigación en Filipinas, por alegadas extralimitaciones en el desempeño
de sus funciones oficiales, es una dirigida personalmente contra él. "Ordinarily the officer or employee
committing the tort is personally liable therefor, and may be sued as any other citizen and held answerable for
whatever injury or damage results from his tortious act." (49 Am. Jur. 28.) En ese caso, no procede el
sobreseimiento de la demanda por el fundamento de que la acción es una dirigida contra la República de
Filipinas.

DECISION

DIOKNO, M p:

Carmen Festejo, dueña de unos terrenos azucareros, de un total de unas 9 hectáreas y media de
superfice, demandó a "Isaías Fernando Director, Bureau of Public Works, que como tal Director de Obras
Públicas tiene a su cargo los sistemas y proyectos de irrigación y es el funcionario responsable de la
construcción de los sistemas de irrigación en el país," alegando que — .
"The defendant, as Director of the Bureau of Public Works, without authority obtained
first from the Court of First Instance of Ilocos Sur, without obtaining first a right of way, and without
the consent and knowledge of the plaintiff, and against her express objection, unlawfully took
possession of portions of the three parcels of land described above, and caused an irrigation
canal to be constructed on the portion of the three parcels of land on or about the month of
February 1951 the aggregate area being 24,179 square meters to the damage and prejudice of
the plaintiff." — R. on A., p. 3.
causando a ella variados daños y perjuicios. Pidió, en su consecuencia, sentencia condenando el
demandado:
". . . to return or cause to be returned the possession of the portions of land unlawfully
occupied and appropriated in the aggregate area of 24,179 square meters and to return the land
to its former condition
under the expenses of the defendant." . . .
"In the remote event that the portions of land unlawfully occupied and appropriated can
not be returned to the plaintiff, then to order the defendant to pay to the plaintiff the sum of
P19,343.20 as value of the portions totalling an area of 24,179 square meters;" — R. on A., p.
5.
y además a pagar P9,756.19 de daños y P5,000 de honorarios de abogado, con las costas R. on A., pp. 5-6.
El demandado, por medio del Procurador General, presentó moción de sobreseimiento de la
demanda por el fundamento de que el Juzgado no tiene jurisdicción para dictar sentencia válida contra él,
toda vez que judicialmente la reclamación es contra la República de Filipinas, y esta no ha presentado su
consentimiento a la demanda. El Juzgado inferior estimó la moción y sobreseyó la demanda sin perjuicio y
sin costas.
En apelación, la demandante sostiene que fué un error considerar la demanda como una contra la
República y sobreseer en su virtud la demanda.
La moción contra "Isaías Fernando, Director de Obras Públicas, encargado y responsable de la
construcción de los sistemas de irrigación en Filipinas" es una dirigida personalmente contra él, por actos
que asumió ejecutar en su concepto oficial. La ley no le exime de responsabilidad por las extralimitaciones
que cometa o haga cometer en el desempeño de sus funciones oficiales.
Un caso semejante es el de Nelson vs. Bobcock (1933) 18 minn. 584, 24 NW 49, 90 ALR 1472. Allí
el Comisionado de Carreteras, al mejorar un trozo de la carretera ocupó o se apropió de terrenos contiguos
al derecho de paso. El Tribunal Supremo del Estado declaró que es personalmente responsable al dueño de
los daños causados. Declaró además que la ratificación de lo que hicieron sus subordinados era equivalente
a una orden a los mismos. He aquí lo dijo el Tribunal.
"We think the evidence and conceded facts permitted the jury in finding that in the
trespass on plaintiff's land defendant committed acts outside the scope of his authority. When
he went outside the boundaries of the right of way upon plaintiff's land and damaged it or
destroyed its former condition and usefulness, he must be held to have designedly departed
from the duties imposed on him by law. There can be no claim that he thus invaded plaintiff's
land southeasterly of the right of way innocently. Surveys clearly marked the limits of the land
appropriated for the right of way of this trunk highway before construction began. . . .
"'Ratification may be equivalent to command, and cooperation may be inferred from
acquiescence where there is power to restrain.' It is unnecessary to consider other cases
cited, . . ., for as before suggested, the jury could find or infer that, in so far as there was actual
trespass by appropriation of plaintiff's land as a dumping place for the rock to be removed from
the additional appropriated right of way, defendant planned, approved, and ratified what was
done by his subordinates." — Nelson vs. Bobcock, 90 A. L. R., 1472, 1476, 1477.
La doctrina sobre la responsabilidad civil de los funcionarios en casos parecidos se resume como
sigue:
"Ordinarily the officer or employee committing the tort is personally liable therefor, and
may be sued as any other citizen and held answerable for whatever injury or damage results
from his tortious act." — 49 Am. Jur. 289. . . If an officer, even while acting under color of his
office, exceeds the power conferred on him by law, he cannot shelter himself under the plea
that he is a public agent." — 43 Am. Jur. 86.
"It is a general rule that an officer-executive, administrative quasi-judicial, ministerial, or
otherwise who acts outside the scope of his jurisdiction and without authorization of law may
thereby render himself amenable to personal liability in a civil suit. If he exceeds the power
conferred on him by law, he cannot shelter himself by the plea that he is a public agent acting
under color of his office, and not personally. In the eye of the law, his acts then are wholly without
authority." — 43 Am. Jur. 89-90.
El articulo 32 del Código Civil dice, a su vez:
"ART. 32. Any public officer or employee, or any private individual, who directly or
indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following
rights and liberties of another person shall be liable to the latter for damages:
xxx xxx xxx.
"(6) The right against deprivation of property without due process of law;
xxx xxx xxx.
"In any of the cases referred to in this article, whether or not the defendant's acts or
omission constitutes a criminal offense, the aggrieved party has a right to commence an
entirely separate and distinct civil action for damages, and for other relief. Such civil action shall
proceed independently of any criminal prosecution (if the latter be instituted), and may be
proved by a preponderance of evidence.
"The indemnity shall include moral damages. Exemplary damages may also be
adjudicated."
Veanse tambien Lung vs. Aldanese, 45 Phil., 784; Syquia vs. Almeda, No. L-1648,
Agosto 17, 1947; Marquez vs. Nelson, No. L-2412, Septiembre 1950.
Se revoca la orden apelada y se ordena la continuación de la tramitación de la demanda conforme
proveen los reglamentos. Sin especial pronunciamiento en cuanto a las costas. Así se ordena.
Padilla, Reyes, Jugo, Bautista Angelo y Labrador, MM., estan conformes.

Separate Opinions

CONCEPCION, J., dissenting:

To my mind, the allegations of the complaint lead to no other conclusion than that appellee
Isaias Fernando is a party in this case, not in his personal capacity, but as an officer of the Government.
According to said pleading the defendant is "Isaias Fernando, Director, Bureau of Public Works." Moreover, in
paragraphs 4 and 5 of the complaint, it is alleged:
"4. That the defendant as Director of the Bureau of Public Works is in charge of irrigation
projects and systems, and the official responsible for the construction of irrigation system in the
Philippines:
5. That the defendant, as Director of the Bureau of Public Works, without authority
obtained first from the Court of First Instance of Ilocos Sur, without obtaining first a right of way
and without the consent and knowledge of the plaintiff, and against her express objection,
unlawfully took possession of portions of the three parcels of land described above, and caused
an irrigation canal to be constructed on the portion of the three parcels of land on or about the
month of February 1951 the aggregate area being 24,179 square meters to the damage and
prejudice of the plaintiff." (Italics supplied.)
The emphasis thus placed upon the allegation that the acts complained of were performed by said
defendant "as Director of the Bureau of Public Works," clearly shows that the designation of his office was
included in the title of the case to indicate that he was being sued in his official capacity. This conclusion is
bolstered up by the fact that, among other things, plaintiff prays, in the complaint, for a judgment.
"Ordering the defendant to return or caused to be returned the possession of the
portions of land unlawfully occupied and appropriated in the aggregate area of 24,179 square
meters and to return the land to its former condition under the expense of the defendant".
(Paragraph a, of the complaint).
We take judicial notice of the fact that the irrigation projects and system referred to in the complaint —
of which the defendant, Isaias Fernando, according to the same pleading, is "in charge" and for which he is
"responsible" as Director of the Bureau of Public Works — are established and operated with public funds,
which pursuant to the Constitution, must be appropriated by law. Irrespective of the manner in which the
construction may have been undertaken by the Bureau of Public Works, the system or canal is, therefore, a
property of the Government. Consequently, in praying that possession of the portions of land occupied by the
irrigation canal involved in the present case be returned to plaintiff herein, and that said land be restored to its
former condition, plaintiff seeks to divest the Government of its possession of said irrigation canal, and, what
is worse, to cause said property of the Government to be removed or destroyed. As held in
Syquia vs. Lopez * (47 Off. Gaz., 665), the Government is, accordingly, "the real party in interest as
defendant" in the case at bar. In other words, the same partakes of the nature of a suit against the state and
may not be maintained without its consent.
Hence I am constrained to dissent.
Bengzon, J., concurs.
||| (Festejo v. Fernando, G.R. No. L-5156, [March 11, 1954], 94 PHIL 504-509)

EN BANC

[G.R. No. 76607. February 26, 1990.]


UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE
REEVES, petitioners, vs. HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional
Trial Court, Angeles City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO
C. DEL PILAR, respondents.

[G.R. No. 79470. February 26, 1990.]

UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF, WILFREDO BELSA,


PETER ORASCION AND ROSE CARTALLA, petitioners, vs.HON. RODOLFO D. RODRIGO, as
Presiding Judge of Branch 7, Regional Trial Court (BAGUIO CITY), La Trinidad, Benguet and
FABIAN GENOVE,respondents.

[G.R. No. 80018. February 26, 1990.]

UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F.


BOSTICK, petitioners, vs. HON. JOSEFINA D. CEBALLOS, As Presiding Judge, Regional Trial
Court, Branch 66, Capas, Tarlac, and LUIS BAUTISTA, respondents.

[G.R. No. 80258. February 26, 1990.]

UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC ERNEST E.


RIVENBURGH, AIC ROBIN BLEVINS, SGT. NOEL A. GONZALES, SGT. THOMAS MITCHELL,
SGT. WAYNE L. BENJAMIN, ET AL., petitioners, vs. HON. CONCEPCION S. ALARCON
VERGARA, as Presiding Judge, Branch 62 REGIONAL TRIAL COURT, Angeles City, and
RICKY SANCHEZ, FREDDIE SANCHEZ AKA FREDDIE RIVERA, EDWIN MARIANO, AKA JESSIE
DOLORES SANGALANG, ET AL., respondents.

Luna, Sison & Manas Law Office for petitioners.

SYLLABUS

1. CONSTITUTIONAL LAW; DOCTRINE OF STATE IMMUNITY FROM SUIT; GENERALLY ACCEPTED


PRINCIPLE OF INTERNATIONAL LAW; EMBODIED INPHILIPPINE CONSTITUTION. — The rule that a state
may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987 Constitution, is
one of the generally accepted principles of international law that we have adopted as part of the law of our land
under Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in the 1935 and
1973 Constitutions and also intended to manifest our resolve to abide by the rules ofthe international community.
2. ID., ID., ID., PRINCIPLE DEEMED INCORPORATED IN THE LAW OF EVERY CIVILIZED STATE; STATE IS
AUTOMATICALLY OBLIGATED TO COMPLY WITH THE PRINCIPLE. — Even without such affirmation, we
would still be bound by the generally accepted principles of international law under the doctrine ofincorporation.
Under this doctrine, as accepted by the majority of states, such principles are deemed incorporated in the
law of every civilized state as a condition and consequence of its membership in the society of nations. Upon its
admission to such society, the state is automatically obligated to comply with these principles in its relations with
other states.
3. ID.; ID.; BASIS. — As applied to the local state, the doctrine of state immunity is based on the justification given
by Justice Holmes that "there can be no legal right against the authority which makes the law on which the right
depends." There are other practical reasons for the enforcement of the doctrine. In the case of the foreign state
sought to be impleaded in the local jurisdiction, the added inhibition is expressed in the maxim par in parem, non
habet imperium. All states are sovereign equals and cannot assert jurisdiction over one another. A contrary
disposition would, in the language of a celebrated case, "unduly vex the peace of nations."
4. ID., ID., APPLIES TO OFFICIALS OF THE STATE FOR ACTS PERFORMED IN THE DISCHARGE OF THEIR
DUTIES. — While the doctrine appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them in the
discharge of their duties. The rule is that if the judgment against such officials will require the state itself to
perform an affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the
damages awarded against them, the suit must be regarded as against the state itself although it has not been
formally impleaded. In such a situation, the state may move to dismiss the complaint on the ground that it has
been filed without its consent.
5. ID., ID., NOT ABSOLUTE AND MAY BE SUED IF STATE GIVES CONSENT. — The doctrine is sometimes
derisively called "the royal prerogative ofdishonesty" because of the privilege it grants the state to defeat any
legitimate claim against it by simply invoking its non-suability. That is hardly fair, at least in democratic societies,
for the state is not an unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is not
absolute and does not say the state may not be sued under any circumstance. On the contrary, the rule says that
the state may not be sued without its consent, which clearly imports that it may be sued if it consents.
6. ID., ID., ID., CONSENT MAY BE GIVEN EXPRESSLY OR IMPLIEDLY. — 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.
7. ID., ID., ID., ID., WAIVER OF IMMUNITY; INSTANCES. — The general law waiving the immunity of the state
from suit is found in Act No. 3083, under which the Philippine government "consents and submits to be sued upon
any moneyed claim involving liability arising from contract, express or implied, which could serve as a
basis of civil action between private parties." In Merritt v. Government of the Philippine Islands, a 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 complaint, thus opening
itself to a counterclaim.
8. ID., ID., ID., ID., ID., ID., EXCEPTIONS. — The above rules are subject to qualification. Express consent is
effected only by the will of the legislature through the medium of a duly enacted statute. We have held that not all
contracts entered into by the government will operate as a waiver of its non-suability; distinction must be made
between its sovereign and proprietary acts. As for the filing of a complaint by the government, suability will result
only where the government is claiming affirmative relief from the defendant.
9. ID., ID., ID., ID., ID., UNITED STATES OF AMERICA DEEMED TO HAVE IMPLIEDLY WAIVED ITS NON-
SUABILITY IF IT HAS ENTERED INTO A CONTRACT IN ITS PROPRIETARY CAPACITY. — There is no
question that the United States of America, 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. It is only when the contract involves
its sovereign or governmental capacity that no such waiver may be implied. This was our ruling
in United States of America v. Ruiz, where the transaction in question dealt with the improvement of the wharves
in the naval installation at Subic Bay. As this was a clearly governmental function, we held that the contract did
not operate to divest the UnitedStates of its sovereign immunity from suit.
10. ID., ID., ID., ID., ID., CHARGES MAY NOT BE SUMMARILY DISMISSED ON MERE ASSERTION THAT
ACTS ARE IMPUTABLE TO THE UNITED STATES OFAMERICA. — The other petitioners in the cases before us
all aver they have acted in the discharge of their official functions as officers or agents of the UnitedStates.
However, this is a matter of evidence. The charges against them may not be summarily dismissed on their mere
assertion that their acts are imputable to the United States of America, which has not given its consent to be
sued. In fact, the defendants are sought to be held answerable for personal torts in which the United States itself
is not involved. If found liable, they and they alone must satisfy the judgment.
11. ID., ID., ID., ID., ID., PETITIONERS CHARGED WITH THE ENFORCEMENT OF LAW REGARDING
PROHIBITED DRUGS ARE AGENTS OF THE UNITED STATES. — It is clear from a study of the records of G.R.
No. 80018 that the individually-named petitioners therein were acting in the exercise of their official functions
when they conducted the buy-bust operation against the complainant and thereafter testified against him at his
trial. The said petitioners were in fact connected with the Air Force Office of Special Investigators and were
charged precisely with the function of preventing the distribution, possession and use ofprohibited drugs and
prosecuting those guilty of such acts. It cannot for a moment be imagined that they were acting in their private or
unofficial capacity when they apprehended and later testified against the complainant. It follows that for
discharging their duties as agents of the United States, they cannot be directly impleaded for acts imputable to
their principal, which has not given its consent to be sued.
12. ID., ID., ID., ID., ID., SUABILITY AND LIABILITY, DIFFERENTIATED. — There seems to be a failure to
distinguish between suability and liability and a misconception that the two terms are synonymous. 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.
13. ID., ID., ID., ID., ID., ARTICLE 2180 OF THE CIVIL CODE ESTABLISHES A RULE OF LIABILITY. — The
private respondent invokes Article 2180 of the Civil Code which holds the government liable if it acts through a
special agent. The argument, it would seem, is premised on the ground that since the officers are designated
"special agents," the United States government should be liable for their torts. The said article establishes a
rule of liability, not suability. The government may be held liable under this rule only if it first allows itself to be
sued through any of the accepted forms of consent.

14. ID., ID., ID., ID., ID., AN AGENT PERFORMING REGULAR FUNCTIONS IS NOT A SPECIAL AGENT EVEN
IF SO DENOMINATED; ARTICLE APPLIES ONLY TO PHILIPPINE GOVERNMENT. — Moreover, the agent
performing his regular functions is not a special agent even if he is so denominated, as in the case at bar. No less
important, the said provision appears to regulate only the relations of the local state with its inhabitants and,
hence, applies only to the Philippine government and not to foreign governments impleaded in our courts.
15. ID., ID., ID., ID., ID., EXPRESS WAIVER MUST BE EFFECTED THROUGH A DULY-ENACTED STATUTE.
— We reject the conclusion of the trial court that the answer filed by the special counsel of the Office of the Sheriff
Judge Advocate of Clark Air Base was a submission by the United States government to its jurisdiction. As we
noted in Republic v. Purisima, express waiver of immunity cannot be made by a mere counsel of the government
but must be effected through a duly-enacted statute. Neither does such answer come under the implied
forms of consent as earlier discussed.
16. ID., ID., ID., ID., ID., INQUIRY MUST BE MADE AS TO WHAT CAPACITY PETITIONERS WERE ACTING.
— But even as we are certain that individual petitioners in G.R. No. 80018 were acting in the discharge of their
official functions, we hesitate to make the same conclusion in G.R. No. 80258. The contradictory factual
allegations in this case deserve in our view a closer study of what actually happened to the plaintiffs. The record
is too meager to indicate if the defendants were really discharging their official duties or had actually exceeded
their authority when the incident in question occurred. Lacking this information, this Court cannot directly decide
this case. The needed inquiry must first be made by the lower court so it may assess and resolve the conflicting
claims of the parties on the basis of the evidence that has yet to be presented at the trial. Only after it shall have
determined in what capacity the petitioners were acting at the time of the incident in question will this Court
determine, if still necessary, if the doctrine of state immunity is applicable.
17. ID., ID., ID., ID., ID., DOCTRINE CANNOT BE INVOKED WHERE THE STATE ENTERED INTO A
CONTRACT IN THE DISCHARGE OF ITS PROPRIETARY FUNCTION; CASE AT BAR. — From the
circumstances, the Court can assume that the restaurant services offered at the John Hay Air Station
partake of the nature of a business enterprise undertaken by the United States government in its proprietary
capacity. Such services are not extended to the American servicemen for free as a perquisite of membership in
the Armed Forces of the United States. Neither does it appear that they are exclusively offered to these
servicemen; on the contrary, it is well known that they are available to the general public as well, including the
tourists in Baguio City, many of whom make it a point to visit John Hay for this reason. All persons availing
themselves of this facility pay for the privilege like all other customers as in ordinary restaurants. Although the
prices are concededly reasonable and relatively low, such services are undoubtedly operated for profit, as a
commercial and not a governmental activity. The consequence of this finding is that the petitioners cannot invoke
the doctrine of state immunity to justify the dismissal of the damage suit against them by Genove. Such defense
will not prosper even if it be established that they were acting as agents of the United States when they
investigated and later dismissed Genove. For that matter, not even the United States government itself can claim
such immunity. The reason is that by entering into the employment contract with Genove in the discharge of its
proprietary functions, it impliedly divested itself of its sovereign immunity from suit.
18. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; DISMISSAL FOR THE
UNBELIEVABLY NAUSEATING ACT IS PROPER. — The dismissal of the private respondent was decided upon
only after a thorough investigation where it was established beyond doubt that he had polluted the soup stock with
urine. The investigation, in fact, did not stop there. Despite the definitive finding of Genove's guilt, the case was
still referred to the board ofarbitrators provided for in the collective bargaining agreement. This board unanimously
affirmed the findings of the investigators and recommended Genove's dismissal. There was nothing arbitrary
about the proceedings. The petitioners acted quite properly in terminating the private respondent's employment
for his unbelievably nauseating act. It is surprising that he should still have the temerity to file his complaint for
damages after committing his utterly disgusting offense.
19. ID.; ID.; BARBERSHOPS ARE NOT AGENCIES OF THE UNITED STATES ARMED FORCES; IMMUNITY
FROM SUIT CANNOT BE INVOKED. — Concerning G.R. No. 76607, we also find that the barbershops
subject of the concessions granted by the United States government are commercial enterprises operated by
private persons. They are not agencies of the United States Armed Forces nor are their facilities demandable as a
matter of right by the American servicemen. This being the case, the petitioners cannot plead any immunity from
the complaint filed by the private respondents in the court below. The contracts in question being decidedly
commercial, the conclusion reached in the United States of America v. Ruiz case cannot be applied here.

DECISION

CRUZ, J p:

These cases have been consolidated because they all involve the doctrine of state immunity.
The United States of America was not impleaded in the complaints below but has moved to dismiss on the ground
that they are in effect suits against it to which it has not consented. It is now contesting the denialof its motions by
the respondent judges. cdll
In G.R. No. 76607, 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 barbering 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. Among those who submitted their bids
were private respondents Roberto T. Valencia, Emerenciana C. Tanglao, and Pablo C. del Pilar. Valencia had
been a concessionaire inside Clark for 34 years; del Pilar for 12 years; and Tanglao for 50 years. LLjur
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. Cdpr
On June 30,1986, the private respondents filed a complaint in the court below 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. 1
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 officials/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 m 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.
The Court, further, is of the view that Article XVIII of the RP-US Bases Agreement does not
cover such kind of services falling under the concessionaireship, such as a barber shop
concession. 2
On December 11, 1986, following the filing of the herein petition for certiorari and prohibition with preliminary
injunction, we issued a temporary restraining order against further proceedings in the court below. 3

In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony Lamachia, Wilfredo
Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the U.S. Air Force Recreation Center at the
John Hay Air Station in Baguio City. It had been ascertained after investigation, from the testimony of Belsa,
Cartalla and Orascion, that Genove had poured urine into the soup stock used in cooking the vegetables served
to the club customers. Lamachia, as club manager, suspended him and thereafter referred the case to a
board of arbitrators conformably to the collective bargaining agreement between the Center and its employees.
The board unanimously found him guilty and recommended his dismissal. This was effected on March 5, 1986, by
Col. David C. Kimball, Commander of the 3rd Combat Support Group, PACAF Clark Air Force Base. Genove's
reaction was to file his complaint in the Regional Trial Court of Baguio City against the individual petitioners. 4
On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss the complaint,
alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay Air Station, was immune from
suit for the acts done by him in his official capacity. They argued that the suit was in effect against
the United States, which had not given its consent to be sued. Cdpr
This motion was denied by the respondent judge on June 4, 1987, in an order which read in part:
It is the understanding of the Court, based on the allegations of the complaint — which have
been hypothetically admitted by defendants upon the filing oftheir motion to dismiss — that
although defendants acted initially in their official capacities, their going beyond what their
functions called for brought them out of the protective mantle of whatever immunities they may
have had in the beginning. Thus, the allegation that the acts complained of were "illegal," done,
with "extreme bad faith" and with "pre-conceived sinister plan to harass and finally dismiss" the
plaintiff, gains significance. 5
The petitioners then came to this Court seeking certiorari and prohibition with preliminary injunction.
In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O'Donnell, an extension of Clark
Air Base, was arrested following a buy-bust operation conducted by the individual petitioners herein, namely,
Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S. Air Force and special agents of the Air
Force Office of Special Investigators (AFOSI). On the basis of the sworn statements made by them, an
information for violation of R.A. 6425, otherwise known as the Dangerous Drugs Act, was filed against Bautista in
the Regional Trial Court of Tarlac. The above-named officers testified against him at his trial. As a result of the
filing of the charge, Bautista was dismissed from his employment. He then filed a complaint for damages against
the individual petitioners herein claiming that it was because of their acts that he was removed. 6
During the period for filing of the answer, Mariano Y. Navarro, a special counsel assigned to the International Law
Division, Office of the Staff Judge Advocateof Clark Air Base, entered a special appearance for the defendants
and moved for an extension within which to file an "answer and/or other pleadings." His reason was that the
Attorney General of the United States had not yet designated counsel to represent the defendants, who were
being sued for their official acts. Within the extended period, the defendants, without the assistance of counsel or
authority from the U.S. Department of Justice, filed their answer. They alleged therein as affirmative defenses that
they had only done their duty in the enforcement of the laws of the Philippines inside the American bases
pursuant to the RP-US Military Bases Agreement.
On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the defendants, filed
with leave of court a motion to withdraw the answer and dismiss the complaint. The ground invoked was that the
defendants were acting in their official capacity when they did the acts complained ofand that the complaint
against them was in effect a suit against the United States without its consent. prcd
The motion was denied by the respondent judge in his order dated September 11, 1987, which held that the
claimed immunity under the Military Bases Agreement covered only criminal and not civil cases. Moreover, the
defendants had come under the jurisdiction of the court when they submitted their answer. 7
Following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we issued on
October 14, 1987, a temporary restraining order. 8
In G.R. No. 80258, a complaint for damages was filed by the private respondents against the herein petitioners
(except the United States of America), for injuries allegedly sustained by the plaintiffs as a result of the acts of the
defendants. 9 There is a conflict of factual allegations here. According to the plaintiffs, the defendants beat them
up, handcuffed them and unleashed dogs on them which bit them in several parts of their bodies and caused
extensive injuries to them. The defendants deny this and claim the plaintiffs were arrested for theft and were
bitten by the dogs because they were struggling and resisting arrest. The defendants stress that the dogs were
called off and the plaintiffs were immediately taken to the medical center for treatment of their wounds.
In a motion to dismiss the complaint, the United States of America and the individually named defendants argued
that the suit was in effect a suit against theUnited States, which had not given its consent to be sued. The
defendants were also immune from suit under the RP-US Bases Treaty for acts done by them in the
performance of their official functions.
The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading in part as follows:
The defendants certainly cannot correctly argue that they are immune from suit. The
allegations, of the complaint which is sought to be dismissed, had to be hypothetically admitted
and whatever ground the defendants may have, had to be ventilated during the trial of the case
on the merits. The complaint alleged criminal acts against the individually-named defendants
and from the nature of said acts it could not be said that they are Acts of State, for which
immunity should be invoked. If the Filipinos themselves are duty bound to respect, obey and
submit themselves to the laws of the country, with more reason, the
members of the United States Armed Forces who are being treated as guests of this country
should respect, obey and submit themselves to its laws. 10
and so was the motion for reconsideration. The defendants submitted their answer as required but
subsequently filed their petition for certiorari and prohibition with preliminary injunction with this Court. We
issued a temporary restraining order on October 27, 1987. 11
II
The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987
Constitution, is one of the generally accepted principles of international law that we have adopted as part of the
law of our land under Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in the
1935 and 1973 Constitutions and also intended to manifest our resolve to abide by the rules of the international
community.
Even without such affirmation, we would still be bound by the generally accepted principles of international law
under the doctrine of incorporation. Under this doctrine, as accepted by the majority of states, such principles are
deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the
society of nations. Upon its admission to such society, the state is automatically obligated to comply with these
principles in its relations with other states.
As applied to the local state, the doctrine of state immunity is based on the justification given by Justice Holmes
that "there can be no legal right against the authority which makes the law on which the right depends." 12 There
are other practical reasons for the enforcement of the doctrine. In the case of the foreign state sought to be
impleaded in the local jurisdiction, the added inhibition is expressed in the maxim par in parem, non habet
imperium. All states are sovereign equals and cannot assert jurisdiction over one another. A contrary disposition
would, in the language of a celebrated case, "unduly vex the peaceof nations." 13
While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to
complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties.
The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to
satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the
suit must be regarded as against the state itself although it has not been formally impleaded. 14 In such a
situation, the state may move to dismiss the complaint on the ground that it has been filed without its consent.
The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the privilege it grants
the state to defeat any legitimate claim against it by simply invoking its non-suability. That is hardly fair, at least in
democratic societies, for the state is not an unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the
doctrine is not absolute and does not say the state may not be sued under any circumstance. On the contrary, 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.
The general law waiving the immunity of the state from suit is found in Act No. 3083, under which the Philippine
government "consents and submits to be sued upon any moneyed claim involving liability arising from contract,
express or implied, which could serve as a basis of civil action between private parties." In Merritt v.
Government of the Philippine Islands, 15 a 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. 16 Waiver is also
implied when the government files a complaint, thus opening itself to a counterclaim. 17
The above rules are subject to qualification. Express consent is effected only by the will of the legislature through
the medium of a duly enacted statute. 18 We have held that not all contracts entered into by the government will
operate as a waiver of its non-suability; distinction must be made between its sovereign and proprietary
acts. 19 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
In the case of the United States of America, the customary rule of international law on state immunity is
expressed with more specificity in the RP-US Bases Treaty. Article III thereof provides as follows:
It is mutually agreed that the United States shall have the rights, power and authority within the
bases which are necessary for the establishment, use, operation and defense thereof or
appropriate for the control thereof and all the rights, power and authority within the limits of the
territorial waters and air space adjacent to, or in the vicinity of, the bases which are necessary
to provide access to them or appropriate for their control.
The petitioners also rely heavily on Baer v. Tizon, 21 along with several other decisions, to support their position
that they are not suable in the cases below, the United States not having waived its sovereign immunity from suit.
It is emphasized that in Baer, the Court held:
The invocation of the doctrine of immunity from suit of a foreign state without its consent is
appropriate. More specifically, insofar as alien armed forces is concerned, the starting point is
Raquiza v. Bradford, a 1945 decision. In dismissing a habeas corpus petition for the
release of petitioners confined by American army authorities, Justice Hilado, speaking for the
Court, cited Coleman v. Tennessee, where it was explicitly declared: `It is well settled that a
foreign army, permitted to march through a friendly country or to be stationed in it, by
permission of its government or sovereign, is exempt from the civil and criminal
jurisdiction of the place.' Two years later, in Tubb and Tedrow v. Griess, this Court relied on the
ruling in Raquiza v. Bradford and cited in support thereof excerpts from the works of the
following authoritative writers: Vattel, Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde,
and McNair and Lauterpacht. Accuracy demands the clarification that after the
conclusion of the Philippine-American Military Bases Agreement, the treaty provisions should
control on such matter, the assumption being that there was a manifestation of the submission
to jurisdiction on the part of the foreign power whenever appropriate. More to the point is
Syquia v. Almeda Lopez, where plaintiffs as lessors sued the Commanding
General of the United States Army in the Philippines, seeking the restoration to them of the
apartment buildings they owned leased to the United States armed forces stationed in the
Manila area. A motion to dismiss on the ground of non-suability was filed and upheld by
respondent Judge. The matter was taken to this Court in a mandamus proceeding. It failed. It
was the ruling that respondent Judge acted correctly considering that the `action must be
considered as one against the U.S. Government.' The opinion of Justice Montemayor
continued: `It is clear that the courts of the Philippines including the Municipal Court of Manila
have no jurisdiction over the present case for unlawful detainer. The
question of lack of jurisdiction was raised and interposed at the very beginning of the action.
The U.S. Government has not given its consent to the filing of this suit which is essentially
against her, though not in name. Moreover, this is not only a caseof a citizen filing a suit against
his own Government without the latter's consent but it is of a citizen filing an action against a
foreign government without said government's consent, which renders more obvious the
lack of jurisdiction of the courts of his country. The principles of law behind this rule are so
elementary and of such general acceptance that we deem it unnecessary to cite authorities in
support thereof.' Then came Marvel Building Corporation v. Philippine War Damage
Commission, where respondent, a United States Agency established to compensate damages
suffered by the Philippines during World War II was held as falling within the above doctrine as
the suit against it `would eventually be a charge against or financial
liability of the UnitedStates Government because . . ., the Commission has no funds of its own
for the purpose of paying money judgments.' The Syquia ruling was again explicitly relied upon
in Marquez Lim v. Nelson, involving a complaint for the recovery of a motor launch, plus
damages, the special defense interposed being `that the vessel belonged to
the United States Government, that the defendants merely acted as agents of said
Government, and that the United StatesGovernment is therefore the real party in interest.' So it
was in Philippine Alien Property Administration v. Castelo, where it was held that a suit against
Alien Property Custodian and the Attorney General of the United States involving vested
property under the Trading with the Enemy Act is in substance a suit against the United States.
To the same effect is Parreno v. McGranery, as the following excerpt from the
opinion of Justice Tuazon clearly shows: `It is a widely accepted principle of international law,
which is made a part of the law of the land (Article II, Section 3 of the Constitution), that a
foreign state may not be brought to suit before the courts of another state or its own courts
without its consent.' Finally, there is Johnson v. Turner, an appeal by the defendant, then
Commanding General, Philippine Command (Air Force, with office at Clark Field) from a
decision ordering the return to plaintiff of the confiscated military payment certificates known as
scrip money. In reversing the lower court decision, this Tribunal, through Justice Montemayor,
relied on Syquia v. Almeda Lopez, explaining why it could not be sustained. LLphil
It bears stressing at this point that the above observations do not confer on the United States of America a
blanket immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that
they are also insulated from suit in this country merely because they have acted as agents of the United States in
the discharge of their official functions.
There is no question that the United States of America, 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. It is only when the
contract involves its sovereign or governmental capacity that no such waiver may be implied. This was our ruling
in United States of America v. Ruiz, 22 where the transaction in question dealt with the improvement of the
wharves in the naval installation at Subic Bay. As this was a clearly governmental function, we held that the
contract did not operate to divest the United States of its sovereign immunity from suit. In the words of Justice
Vicente Abad Santos:
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 acts
(jure gestionis). 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 thus be deemed to have tacitly given its consent to be sued only when it enters into
business contracts. It does not apply where the contract relates to the exercise of its sovereign
functions. In this case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of the
government of the highest order; they are not utilized for nor dedicated to commercial or
business purposes.
The other petitioners in the cases before us all aver they have acted in the discharge of their official functions as
officers or agents of the United States. However, this is a matter of evidence. The charges against them may not
be summarily dismissed on their mere assertion that their acts are imputable to theUnited States of America,
which has not given its consent to be sued. In fact, the defendants are sought to be held answerable for personal
torts in which theUnited States itself is not involved. If found liable, they and they alone must satisfy the judgment.

In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever, appropriated private land
and converted it into public irrigation ditches. Sued for the value of the lots invalidly taken by him, he moved to
dismiss the complaint on the ground that the suit was in effect against the Philippine government, which had not
given its consent to be sued. This Court sustained the denial of the motion and held that the doctrine of state
immunity was not applicable. The director was being sued in his private capacity for a personal tort.
With these considerations in mind, we now proceed to resolve the cases at hand.
III
It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners therein were acting
in the exercise of their official functions when they conducted the buy-bust operation against the complainant and
thereafter testified against him at his trial. The said petitioners were in fact connected with the Air Force
Office of Special Investigators and were charged precisely with the function of preventing the distribution,
possession and use ofprohibited drugs and prosecuting those guilty of such acts. It cannot for a moment be
imagined that they were acting in their private or unofficial capacity when they apprehended and later testified
against the complainant. It follows that for discharging their duties as agents of the United States, they cannot be
directly impleaded for acts imputable to their principal, which has not given its consent to be sued. As we
observed in Sanders v. Veridiano: 24
Given the official character of the above-described letters, we have to conclude that the
petitioners were, legally speaking, being sued as officers of theUnited States government. As
they have acted on behalf of that government, and within the scope of their authority, it is that
government, and not the petitioners personally, that is responsible for their acts.
The private respondent invokes Article 2180 of the Civil Code which holds the government liable if it acts through
a special agent. The argument, it would seem, is premised on the ground that since the officers are designated
"special agents," the United States government should be liable for their torts.
There seems to be a failure to distinguish between suability and liability and a misconception that the two terms
are synonymous. 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.
The said article establishes a rule of liability, not suability. The government may be held liable under this rule only
if it first allows itself to be sued through anyof the accepted forms of consent.
Moreover, the agent performing his regular functions is not a special agent even if he is so denominated, as in the
case at bar. No less important, the said provision appears to regulate only the relations of the local state with its
inhabitants and, hence, applies only to the Philippine government and not to foreign governments impleaded in
our courts.
We reject the conclusion of the trial court that the answer filed by the special counsel of the Office of the Sheriff
Judge Advocate of Clark Air Base was a submission by the United States government to its jurisdiction. As we
noted in Republic v. Purisima, 25 express waiver of immunity cannot be made by a mere counsel of the
government but must be effected through a duly-enacted statute. Neither does such answer come under the
implied forms of consent as earlier discussed. Cdpr
But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the discharge of their
official functions, we hesitate to make the same conclusion in G.R. No. 80258. The contradictory factual
allegations in this case deserve in our view a closer study of what actually happened to the plaintiffs. The record
is too meager to indicate if the defendants were really discharging their official duties or had actually exceeded
their authority when the incident in question occurred. Lacking this information, this Court cannot directly decide
this case. The needed inquiry must first be made by the lower court so it may assess and resolve the conflicting
claims of the parties on the basis of the evidence that has yet to be presented at the trial. Only after it shall have
determined in what capacity the petitioners were acting at the time of the incident in question will this Court
determine, if still necessary, if the doctrine ofstate immunity is applicable.
In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located at the U.S. Air
Force Recreation Center, also known as the Open Mess Complex, at John Hay Air Station. As manager of this
complex, petitioner Lamachia is responsible for eleven diversified activities generating an annual income of $2
million. Under his executive management are three service restaurants, a cafeteria, a bakery, a Class VI store, a
coffee and pantry shop, a main cashier cage, an administrative office, and a decentralized warehouse which
maintains a stock level of $200,000.00 per month in resale items. He supervises 167 employees, one of whom
was Genove, with whom the United States government has concluded a collective bargaining agreement.
From these circumstances, the Court can assume that the restaurant services offered at the John Hay Air Station
partake of the nature of a business enterprise undertaken by the United States government in its proprietary
capacity. Such services are not extended to the American servicemen for free as a perquisite of membership in
the Armed Forces of the United States. Neither does it appear that they are exclusively offered to these
servicemen; on the contrary, it is well known that they are available to the general public as well, including the
tourists in Baguio City, many of whom make it a point to visit John Hay for this reason. All persons availing
themselves of this facility pay for the privilege like all other customers as in ordinary restaurants. Although the
prices are concededly reasonable and relatively low, such services are undoubtedly operated for profit, as a
commercial and not a governmental activity.
The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to justify the
dismissal of the damage suit against them by Genove. Such defense will not prosper even if it be established that
they were acting as agents of the United States when they investigated and later dismissed Genove. For that
matter, not even the United States government itself can claim such immunity. The reason is that by entering into
the employment contract with Genove in the discharge of its proprietary functions, it impliedly divested itself of its
sovereign immunity from suit.
But these considerations notwithstanding, we hold that the complaint against the petitioners in the court below
must still be dismissed. While suable, the petitioners are nevertheless not liable. It is obvious that the claim for
damages cannot be allowed on the strength of the evidence before us, which we have carefully examined.
The dismissal of the private respondent was decided upon only after a thorough investigation where it was
established beyond doubt that he had polluted the soup stock with urine. The investigation, in fact, did not stop
there. Despite the definitive finding of Genove's guilt, the case was still referred to the boardof arbitrators provided
for in the collective bargaining agreement. This board unanimously affirmed the findings of the investigators and
recommended Genove's dismissal. There was nothing arbitrary about the proceedings. The petitioners acted
quite properly in terminating the private respondent's employment for his unbelievably nauseating act. It is
surprising that he should still have the temerity to file his complaint for damages after committing his utterly
disgusting offense.
Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions granted by
the United States government are commercial enterprises operated by private persons. They are not
agencies of the United States Armed Forces nor are their facilities demandable as a matter of right by the
American servicemen. These establishments provide for the grooming needs of their customers and offer not only
the basic haircut and shave (as required in most military organizations) but such other amenities as shampoo,
massage, manicure and other similar indulgences. And all for a fee. Interestingly, one of the concessionaires,
private respondent Valencia, was even sent abroad to improve his tonsorial business, presumably for the
benefit ofhis customers . No less significantly, if not more so, all the barbershop concessionaires are, under the
terms of their contracts, required to remit to the UnitedStates government fixed commissions in
consideration of the exclusive concessions granted to them in their respective areas.
This being the case, the petitioners cannot plead any immunity from the complaint filed by the private respondents
in the court below. The contracts in question being decidedly commercial, the conclusion reached in
the United States of America v. Ruiz case cannot be applied here.
The Court would have directly resolved the claims against the defendants as we have done in G.R. No. 79470,
except for the paucity of the record in the case at hand. The evidence of the alleged irregularity in the grant of the
barbershop concessions is not before us. This means that, as in G.R. No. 80258, the respondent court will have
to receive that evidence first, so it can later determine on the basis thereof if the plaintiffs are entitled to the relief
they seek. Accordingly, this case must also be remanded to the court below for further proceedings.

IV
There are a number of other cases now pending before us which also involve the question of the
immunity of the United States from the jurisdiction of the Philippines. This is cause for regret, indeed, as they mar
the traditional friendship between two countries long allied in the cause of democracy. It is hoped that the so-
called "irritants" in their relations will be resolved in a spirit of mutual accommodation and respect, without the
inconvenience and asperity oflitigation and always with justice to both parties.
WHEREFORE, after considering all the above premises, the Court hereby renders judgment as follows:
1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is directed to proceed with the hearing
and decision of Civil Case No. 4772. The temporary restraining order dated December 11, 1986, is LIFTED.
2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298) is DISMISSED.
3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is DISMISSED. The temporary
restraining order dated October 14, 1987, is made permanent.
4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is directed to proceed with the hearing
and decision of Civil Case No. 4996. The temporary restraining order dated October 27, 1987, is LIFTED. LibLex
All without any pronouncement as to costs.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento,
Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

||| (United States of America v. Guinto, G.R. No. 76607, 79470, 80018, 80258, [February 26, 1990], 261 PHIL
777-802)

epublic 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.

Arellano, C. J., Torres, Johnson, and Moreland, JJ., concur.

IRST DIVISION

[G.R. No. L-26400. February 29, 1972.]

VICTORIA AMIGABLE, plaintiff-appellant, vs. NICOLAS CUENCA, as Commissioner of


Public Highways and REPUBLIC OF THE PHILIPPINES,defendants-appellees.

Quirico del Mar, Domingo Antigua, Antonio Paulin and N. Capangpangan for plaintiff and appellant.
Assistant Solicitor General Guillermo Torres and Solicitor Dominador L. Quiroz for defendants and appellees.

SYLLABUS

1. POLITICAL LAW; EMINENT DOMAIN; PROJECT USED BY GOVERNMENT FOR ROAD PURPOSES;
RIGHTS OR REGISTERED OWNER TO DUE COMPENSATION ANYTIME. — Considering that no annotation in
favor of the government appears at the back of her certificate of title and that she has not executed any deed of
conveyance of any portion of her lot to the government, the appellant remains the owner of the whole lot. As
registered owner, she could bring an action to recover possession of the portion of land in question at anytime
because possession is one of the attributes of ownership. However, since restoration of possession of said
portion by the government is neither convenient nor feasible at this time because it has been and is now being
used for road purposes, the only relief available is for the government to make due compensation which it could
and should have done years ago.
2. ID.; ID.; ID.; ID.; RIGHT TO DAMAGES. — The owner of the land is entitled to damages in the form of legal
interest on the price of the land from the time it was taken up to the time that payment is made by the
government. In addition, the government should pay for attorney's fees, the amount of which should be fixed by
the trial court after hearing.
3. ID.; ID.; BASIS FOR DUE COMPENSATION. — To determine the due compensation for the land appropriated
by the Government, the basis should be the price or value thereof at the time of the taking.

DECISION

MAKALINTAL, J p:

This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No. R-5977, dismissing
the plaintiff's complaint.
Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad Estate in Cebu City
as shown by Transfer Certificate of Title No. T-18060, which superseded Transfer Certificate of Title No. RT-3272
(T-3435) issued to her by the Register of Deeds of Cebu on February 1, 1924. No annotation in favor of the
government of any right or interest in the property appears at the back of the certificate. Without prior
expropriation or negotiated sale, the government used a portion of said lot, with an area of 6,167 square meters,
for the construction of the Mango and Gorordo Avenues.
It appears that said avenues were already existing in 1921 although "they were in bad condition and very
narrow, unlike the wide and beautiful avenues that they are now," and "that the tracing of said roads was
begun in 1924, and the formal construction in 1925." *
On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting payment of the portion
of her lot which had been appropriated by the government. The claim was indorsed to the Auditor General, who
disallowed it in his 9th Indorsement dated December 9, 1958. A copy of said indorsement was transmitted
to Amigable's counsel by the Office of the President on January 7, 1959.
On February 6, 1959 Amigable filed in the court a quo a complaint, which was later amended on April 17, 1959
upon motion of the defendants, against the Republic of the Philippines and Nicolas Cuenca, in his capacity as
Commissioner of Public Highways for the recovery of ownership and possession of the 6,167 square meters of
land traversed by the Mango and Gorordo Avenues. She also sought the payment of compensatory damages in
the sum of P50,000.00 for the illegal occupation of her land, moral damages in the sum of P25,000.00, attorney's
fees in the sum of P5,000.00 and the costs of the suit.
Within the reglementary period the defendants filed a joint answer denying the material allegations of the
complaint and interposing the following affirmative defenses, to wit: (1) that the action was premature, the claim
not having been filed first with the Office of the Auditor General; (2) that the right of action for the recovery of any
amount which might be due the plaintiff, if any, had already prescribed; (3) that the action being a suit against the
Government, the claim for moral damages, attorney's fees and costs had no valid basis since as to these items
the Government had not given its consent to be sued; and (4) that inasmuch as it was the province of Cebu that
appropriated and used the area involved in the construction of Mango Avenue, plaintiff had no cause of action
against the defendants.
During the scheduled hearings nobody appeared for the defendants notwithstanding due notice, so the trial court
proceeded to receive the plaintiff's evidence ex parte. On July 29, 1959 said court rendered its decision holding
that it had no jurisdiction over the plaintiff's cause of action for the recovery of possession and ownership of the
portion of her lot in question on the ground that the government cannot be sued without its consent; that it had
neither original nor appellate jurisdiction to hear, try and decide plaintiff's claim for compensatory damages in the
sum of P50,000.00, the same being a money claim against the government; and that the claim for moral damages
had long prescribed, nor did it have jurisdiction over said claim because the government had not given its consent
to be sued. Accordingly, the complaint was dismissed. Unable to secure a reconsideration, the plaintiff appealed
to the Court of Appeals, which subsequently certified the case to Us, there being no question of fact involved.
The issue here is whether or not the appellant may properly sue the government under the facts of the case.
In the case of Ministerio vs. Court of First Instance of Cebu, 1 involving a claim for payment of the value of a
portion of land used for the widening of the Gorordo Avenue in Cebu City, this Court, through Mr. Justice Enrique
M. Fernando, held that where the government takes away property from a private landowner for public use
without going through the legal process of expropriation or negotiated sale, the aggrieved party may properly
maintain a suit against the government without thereby violating the doctrine of governmental immunity from suit
without its consent. We there said:
". . . If the constitutional mandate that the owner be compensated for property
taken for public use were to be respected, as it should, then a suit of this character
should not be summarily dismissed. The doctrine of governmental immunity from suit
cannot serve as an instrument for perpetrating an injustice on a citizen. Had the
government followed the procedure indicated by the governing law at the time, a
complaint would have been filed by it, and only upon payment of the compensation fixed
by the judgment, or after tender to the party entitled to such payment of the amount fixed,
may it have the right to enter in and upon the land so condemned, to appropriate the
same to the public use defined in the judgment.' If there were an observance of
procedural regularity, petitioners would not be in the sad plaint they are now. It is
unthinkable then that precisely because there was a failure to abide by what the law
requires, the government would stand to benefit. It is just as important, if not more so,
that there be fidelity to legal norms on the part of officialdom if the rule of law were to be
maintained. It is not too much to say that when the government takes any property for
public use, which is conditioned upon the payment of just compensation, to be judicially
ascertained, it makes manifest that it submits to the jurisdiction of a court. There is no
thought then that the doctrine of immunity from suit could still be appropriately invoked."
Considering that no annotation in favor of the government appears at the back of her certificate of title and that
she has not executed any deed of conveyance of any portion of her lot to the government, the appellant remains
the owner of the whole lot. As registered owner, she could bring an action to recover possession of the portion of
land in question at anytime because possession is one of the attributes of ownership. However, since restoration
of possession of said portion by the government is neither convenient nor feasible at this time because it is now
and has been used for road purposes, the only relief available is for the government to make due compensation
which it could and should have done years ago. To determine the due compensation for the land, the basis
should be the price or value thereof at the time of the taking. 2
As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the price of the
land from the time it was taken up to the time that payment is made by the government. 3 In addition, the
government should pay for attorney's fees, the amount of which should be fixed by the trial court after hearing.
WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the court a quo for the
determination of compensation, including attorney's fees, to which the appellant is entitled as above indicated. No
pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo, Villamor and Makasiar, JJ.,
concur.
||| (Amigable v. Cuenca, G.R. No. L-26400, [February 29, 1972], 150 PHIL 422-427)

EN BANC

[G.R. No. L-35645. May 22, 1985.]

UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and


ROBERT GOHIER, petitioners, vs. HON. V.M. RUIZ, Presiding Judge of Branch XV, Court
of First Instance of Rizal and ELIGIO DE GUZMAN & CO., INC., respondents.

Sycip, Salazar, Luna & Manalo & Feliciano Law Office for petitioners.
Albert, Vergara, Benares, Perlas & Dominguez Law Office for respondents.

DECISION

ABAD SANTOS, J p:

This is a petition to review, set aside certain orders and restrain the respondent judge from trying Civil Case No.
779-M of the defunct Court of First Instance of Rizal.
The factual background is as follows:
At times material to this case, the United States of America had a naval base in Subic, Zambales. The base was
one of those provided in the Military Bases Agreement between the Philippines and the United States.
Sometime in May, 1972, the United States invited the submission of bids for the following projects:
1. Repair fender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to shoreline
revetment, NAVBASE Subic; and repair to Leyte Wharf approach, NAVBASE Subic Bay,
Philippines. LLpr
Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequent thereto, the company
received from the United States two telegrams requesting it to confirm its price proposals and for the name of its
bonding company. The company complied with the requests. [In its complaint, the company alleges that the
United States had accepted its bids because "A request to confirm a price proposal confirms the acceptance of a
bid pursuant to defendant United States' bidding practices." (Rollo, p. 30.) The truth of this allegation has not been
tested because the case has not reached the trial stage.]
In June, 1972, the company received a letter which was signed by William I. Collins, Director, Contracts Division,
Naval Facilities Engineering Command, Southwest Pacific, Department of the Navy of the United States, who is
one of the petitioners herein. The letter said that the company did not qualify to receive an award for the projects
because of its previous unsatisfactory performance rating on a repair contract for the sea wall at the boat landings
of the U.S. Naval Station in Subic Bay. The letter further said that the projects had been awarded to third parties.
In the abovementioned Civil Case No. 779-M, the company sued the United States of America and Messrs.
James E. Galloway, William I. Collins and Robert Gohier all members of the Engineering Command of the U.S.
Navy. The complaint is to order the defendants to allow the plaintiff to perform the work on the projects and, in the
event that specific performance was no longer possible, to order the defendants to pay damages. The company
also asked for the issuance of a writ of preliminary injunction to restrain the defendants from entering into
contracts with third parties for work on the projects.
The defendants entered their special appearance "for the purpose only of questioning the jurisdiction of this court
over the subject matter of the complaint and the persons of defendants, the subject matter of the complaint being
acts and omissions of the individual defendants as agents of defendant United States of America, a foreign
sovereign which has not given her consent to this suit or any other suit for the causes of action asserted in the
complaint." (Rollo, p. 50.)
Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the issuance
of the writ of preliminary injunction. The company opposed the motion. The trial court denied the motion and
issued the writ. The defendants moved twice to reconsider but to no avail. Hence the instant petition which seeks
to restrain perpetually the proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the trial court.
The petition is highly impressed with merit. LexLib
The traditional rule of State 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 acts (jure gestionis). 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. (See Coquia and Defensor-
Santiago, Public International Law, pp. 207-209 [1984].) 2006cdtai
The respondent judge recognized the restrictive doctrine of State immunity when he said in his Order denying the
defendants' (now petitioners) motion: "A distinction should be made between a strictly governmental function of
the sovereign state from its private, proprietary or non-governmental acts." (Rollo, p. 20.) However, the
respondent judge also said: "It is the Court's considered opinion that entering into a contract for the repair of
wharves or shoreline is certainly not a governmental function altho it may partake of a public nature or character.
As aptly pointed out by plaintiff's counsel in his reply citing the ruling in the case of Lyons, Inc., [104 Phil. 594
(1958)], and which this Court quotes with approval, viz.:
'It is however contended that when a sovereign state enters into a contract with a private
person, the state can be sued upon the theory that it has descended to the level of an individual
from which it can be implied that it has given its consent to be sued under the contract. . . .
xxx xxx xxx
'We agree to the above contention, and considering that the United States government, through
its agency at Subic Bay, entered into a contract with appellant for stevedoring and
miscellaneous labor services within the Subic Bay Area, a U.S. Naval Reservation, it is evident
that it can bring an action before our courts for any contractual liability that political entity may
assume under the contract. The trial court, therefore, has jurisdiction to entertain this case . . .'"
(Rollo, pp. 20-21.)
The reliance placed on Lyons by the respondent judge is misplaced for the following reasons:
In Harry Lyons, Inc. vs. The United States of America supra, plaintiff brought suit in the Court of First Instance of
Manila to collect several sums of money on account of a contract between plaintiff and defendant. The defendant
filed a motion to dismiss on the ground that the court had no jurisdiction over defendant and over the subject
matter of the action. The court granted the motion on the grounds that: (a) it had no jurisdiction over the defendant
who did not give its consent to the suit; and (b) plaintiff failed to exhaust the administrative remedies provided in
the contract. The order of dismissal was elevated to this Court for review. cdrep
In sustaining the action of the lower court, this Court said:
"It appearing in the complaint that appellant has not complied with the procedure laid down in
Article XXI of the contract regarding the prosecution of its claim against the United States
Government, or, stated differently, it has failed to first exhaust its administrative remedies
against said Government, the lower court acted properly in dismissing this case." (At p. 598.)
It can thus be seen that the statement in respect of the waiver of State immunity from suit was purely gratuitous
and, therefore, obiter so that it has no value as an imperative authority.
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 thus be deemed to have tacitly given its consent
to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise
of its sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of the government of the highest
order; they are not utilized for nor dedicated to commercial or business purposes.
That the correct test for the application of State immunity is not the conclusion of a contract by a State but
the legal nature of the act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased
three apartment buildings to the United States of America for the use of its military officials. The plaintiffs sued to
recover possession of the premises on the ground that the term of the leases had expired, They also asked for
increased rentals until the apartments shall have been vacated.
The defendants who were armed forces officers of the United States moved to dismiss the suit for lack of
jurisdiction on the part of the court. The Municipal Court of Manila granted the motion to dismiss; sustained by the
Court of First Instance, the plaintiffs went to this Court for review on certiorari. In denying the petition, this Court
said:
"On the basis of the foregoing considerations we are of the belief and we hold that the real
party defendant in interest is the Government of the United States of America; that any
judgment for back or increased rentals or damages will have to be paid not by defendants
Moore and Tillman and their 64 co-defendants but by the said U.S. Government. On the basis
of the ruling in the case of Land vs. Dollar already cited, and on what we have already stated,
the present action must be considered as one against the U.S. Government. It is clear that the
courts of the Philippines including the Municipal Court of Manila have no jurisdiction over the
present case for unlawful detainer. The question of lack of jurisdiction was raised and
interposed at the very beginning of the action. The U.S. Government has not given its consent
to the filing of this suit which is essentially against her, though not in name. Moreover, this is not
only a case of a citizen filing a suit against his own Government without the latter's consent but
it is of a citizen filing an action against a foreign government without said government's
consent, which renders more obvious the lack of jurisdiction of the courts of his country. The
principles of law behind this rule are so elementary and of such general acceptance that we
deem it unnecessary to cite authorities in support thereof." (At p. 323.) LLphil
In Syquia, the United States concluded contracts with private individuals but the contracts notwithstanding the
United States was not deemed to have given or waived its consent to be sued for the reason that the contracts
were for jure imperii and not for jure gestionis.
WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil Case
No. 779-M is dismissed. Costs against the private respondent.
SO ORDERED.
Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana, Escolin, Relova Gutierrez, Jr., De la Fuente,
Cuevas and Alampay, JJ., concur.
Fernando, C.J., took no part.

Separate Opinions

MAKASIAR, J., dissents:

The petition should be dismissed and the proceedings in Civil Case No. 779-M in the defunct CFI (now RTC) of
Rizal be allowed to continue therein.
In the case of Lyons vs. the United States of America (104 Phil. 593), where the contract entered into between the
plaintiff (Harry Lyons, Inc.) and the defendant (U.S. Government) involved stevedoring and labor services within
the Subic Bay area, this Court further stated that inasmuch as ". . . the United States Government, through its
agency at Subic Bay, entered into a contract with appellant for stevedoring and miscellaneous labor services
within the Subic Bay area, a U.S. Navy Reservation, it is evident that it can bring an action before our courts for
any contractual liability that political entity may assume under the contract."
When the U.S. Government, through its agency at Subic Bay, confirmed the acceptance of a bid of a private
company for the repair of wharves or shoreline in the Subic Bay area, it is deemed to have entered into a contract
and thus waived the mantle of sovereign immunity from suit and descended to the level of the ordinary citizen. Its
consent to be sued, therefore, is implied from its act of entering into a contract (Santos vs. Santos, 92 Phil. 281,
284).
Justice and fairness dictate that a foreign government that commits a breach of its contractual obligation — in the
case at bar by the unilateral cancellation of the award for the project by the United States government, through its
agency at Subic Bay — should not be allowed to take undue advantage of a party who may have legitimate
claims against it by seeking refuge behind the shield of non-suability. A contrary view would render a Filipino
citizen, as in the instant case, helpless and without redress in his own country for violation of his rights committed
by the agents of the foreign government professing to act in its name. cdll
Appropriate are the words of Justice Perfecto in his dissenting opinion in Syquia vs. Almeda Lopez, 84 Phil. 312,
325:
"Although, generally, foreign governments are beyond the jurisdiction of domestic courts of
justice, such rule is inapplicable to cases in which the foreign government enters into private
contracts with the citizens of the court's jurisdiction. A contrary view would simply run against all
principles of decency and violative of all tenets of morals.
"Moral principles and principles of justice are as valid and applicable as well with regard to
private individuals as with regard to governments either domestic or foreign. Once a foreign
government enters into a private contract with the private citizens of another country, such
foreign government cannot shield its non-performance or contravention of the terms of the
contract under the cloak of non-jurisdiction. To place such foreign government beyond the
jurisdiction of the domestic courts is to give approval to the execution of unilateral contracts,
graphically described in Spanish as 'contratos leoninos,' because one party gets the lion's
share to the detriment of the other. To give validity to such contract is to sanctify bad faith,
deceit, fraud. We prefer to adhere to the thesis that all parties in a private contract, including
governments and the most powerful of them, are amenable to law, and that such contracts are
enforceable through the help of the courts of justice with jurisdiction to take cognizance of any
violation of such contracts if the same had been entered into only by private individuals."
Constant resort by a foreign state or its agents to the doctrine of State immunity in this jurisdiction impinges
unduly upon our sovereignty and dignity as a nation. Its application will particularly discourage Filipino or domestic
contractors from transacting business and entering into contracts with United States authorities or facilities in the
Philippines — whether naval, air or ground forces — because the difficulty, if not impossibility, of enforcing a
validly executed contract and of seeking judicial remedy in our own courts for breaches of contractual obligation
committed by agents of the United States government, always looms large, thereby hampering the growth of
Filipino enterprises and creating a virtual monopoly in our own country by United States contractors of contracts
for services or supplies with the various U.S. offices and agencies operating in the Philippines.
The sanctity of upholding agreements freely entered into by the parties cannot be over emphasized. Whether the
parties are nations or private individuals, it is to be reasonably assumed and expected that the undertakings in the
contract will be complied with in good faith.
One glaring fact of modern day civilization is that a big and powerful nation, like the United States of America, can
always overwhelm small and weak nations. The declaration in the United Nations Charter that its member states
are equal and sovereign, becomes hollow and meaningless because big nations wielding economic and military
superiority impose upon and dictate to small nations, subverting their sovereignty and dignity as nations. Thus,
more often than not, when U.S. interest clashes with the interest of small nations, the American governmental
agencies or its citizens invoke principles of international law for their own benefit.
In the case at bar, the efficacy of the contract between the U.S. Naval authorities at Subic Bay on one hand, and
herein private respondent on the other, was honored more in the breach than in the compliance. The opinion of
the majority will certainly open the floodgates of more violations of contractual obligations. American authorities or
any foreign government in the Philippines for that matter, dealing with the citizens of this country, can
conveniently seek protective cover under the majority opinion. The result is disastrous to the Philippines. LibLex
This opinion of the majority manifests a neo-colonial mentality. It fosters economic imperialism and foreign
political ascendancy in our Republic.
The doctrine of government immunity from suit cannot and should not serve as an instrument for perpetrating an
injustice on a citizen (Amigable vs. Cuenca, L-26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of
First Instance, L-31635, August 31, 1971, 40 SCRA 464).
Under the doctrine of implied waiver of its non-suability, the United States government, through its naval
authorities at Subic Bay, should be held amenable to lawsuits in our country like any other juristic person.
The invocation by the petitioner United States of America is not in accord with paragraph 3 of Article III of the
original RP-US Military Bases Agreement of March 14, 1947, which states that "in the exercise of the above-
mentioned rights, powers and authority, the United States agrees that the powers granted to it will not be used
unreasonably. . . ." (italics supplied).
Nor is such posture of the petitioners herein in harmony with the amendment dated May 27, 1968 to the aforesaid
RP-US Military Bases Agreement, which recognizes "the need to promote and maintain sound employment
practices which will assure equality of treatment of all employees . . . and continuing favorable employer-
employee relations . . ." and "(B)elieving that an agreement will be mutually beneficial and will strengthen the
democratic institutions cherished by both Governments, . . . the United States Government agrees to accord
preferential employment of Filipino citizens in the Bases, thus (1) the U.S. Forces in the Philippines shall fill the
needs for civilian employment by employing Filipino citizens, etc." (Par. 1, Art. I of the Amendment of May 27,
1968).
Neither does the invocation by petitioners of state immunity from suit express fidelity to paragraph 1 of Article IV
of the aforesaid amendment of May 27, 1968 which directs that "contractors and concessionaires performing work
for the U.S. Armed Forces shall be required by their contract or concession agreements to comply with all
applicable Philippine labor laws and regulations," even though paragraph 2 thereof affirms that "nothing in this
Agreement shall imply any waiver by either of the two Governments of such immunity under international law."
Reliance by petitioners on the non-suability of the United States Government before the local courts, actually
clashes with No. III on respect for Philippine law of the Memorandum of Agreement signed on January 7, 1979,
also amending RP-US Military Bases Agreement, which stresses that "it is the duty of members of the United
States Forces, the civilian component and their dependents, to respect the laws of the Republic of the Philippines
and to abstain from any activity inconsistent with the spirit of the Military Bases Agreement and, in particular, from
any political activity in the Philippines. The United States shall take all measures within its authority to insure that
they adhere to them" (italics supplied). cdll
The foregoing duty imposed by the amendment to the Agreement is further emphasized by No. IV on the
economic and social improvement of areas surrounding the bases, which directs that "moreover, the United
States Forces shall procure goods and services in the Philippines to the maximum extent feasible" (italics
supplied).
Under No. VI on labor and taxation of the said amendment of January 6, 1979 in connection with the discussions
on possible revisions or alterations of the Agreement of May 27, 1968, "the discussions shall be conducted on the
basis of the principles of equality of treatment, the right to organize, and bargain collectively, and respect for the
sovereignty of the Republic of the Philippines" (italics supplied).

The majority opinion seems to mock the provision of paragraph 1 of the joint statement of President Marcos and
Vice-President Mondale of the United States dated May 4, 1978 that "the United States re-affirms that Philippine
sovereignty extends over the bases and that Its base shall be under the command of a Philippine Base
Commander," which is supposed to underscore the joint Communique of President Marcos and U.S. President
Ford of December 7, 1975, under which "they affirm that sovereign equality, territorial integrity and political
independence of all States are fundamental principles which both countries scrupulously respect; and that "they
confirm that mutual respect for the dignity of each nation shall characterize their friendship as well as the alliance
between their two countries."
The majority opinion negates the statement on the delineation of the powers, duties and responsibilities of both
the Philippine and American Base Commanders that "in the performance of their duties, the Philippine Base
Commander and the American Base Commander shall be guided by full respect for Philippine sovereignty on the
one hand and the assurance of unhampered U.S. military operations on the other hand;" and that "they shall
promote cooperation, understanding and harmonious relations within the Base and with the general public in the
proximate vicinity thereof" (par. 2 & par. 3 of the Annex covered by the exchange of notes, January 7, 1979,
between Ambassador Richard W. Murphy and Minister of Foreign Affairs Carlos P. Romulo, italics supplied).

||| (US v. V.M. Ruiz, G.R. No. L-35645, [May 22, 1985], 221 PHIL 179-191)

SECOND DIVISION

[G.R. No. L-30671. November 28, 1973.]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON. GUILLERMO P. VILLASOR, as


Judge of the Court of First Instance of Cebu, Branch I, THE PROVINCIAL-SHERIFF OF
RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA,
THE CLERK OF COURT, Court of First Instance of Cebu, P.J. KIENER CO., LTD., GAVINO
UNCHUAN, and INTERNATIONAL CONSTRUCTION CORPORATION,respondents.

Solicitor General Felix V . Makasiar and Solicitor Bernardo P. Pardo for petitioner.
Andres T . Velarde & Marcelo B. Fernan for respondents.

DECISION

FERNANDO, J p:
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, 1 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. As thus simply and tersely put, with the facts being
undisputed and the principle of law that calls for application indisputable, the outcome is predictable.
The Republic of the Philippines is entitled to the writs prayed for. Respondent Judge ought not to have acted thus.
The order thus impugned and the alias writ of execution must be nullified.
In the petition filed by the Republic of the Philippines on July 7, 1969, a summary of facts was set forth thus: "7.
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 herein,
confirming the arbitration award in the amount of P1,712,396.40, subject of Special Proceedings. 8. On June 24,
1969, respondent Honorable Guillermo P. Villasor, issued an Order declaring the aforestated decision of July 3,
1961 final and executory, directing the Sheriffs of Rizal Province, Quezon City [as well as] Manila to execute the
said decision. 9. Pursuant to the said Order dated June 24, 1969, the corresponding Alias Writ of Execution [was
issued] dated June 26, 1969, . . . 10. On the strength of the afore-mentioned Alias Writ of Execution dated June
26, 1969, the Provincial Sheriff of Rizal (respondent herein) served notices of garnishment dated June 28, 1969
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 on June 30, 1969 . . . 11. The funds of the Armed Forces of the Philippines on
deposit with the Banks, particularly, with the Philippine Veterans Bank and the Philippine National Bank [or] their
branches 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, as per Certification dated July 3, 1969 by the AFP Comptroller, . . ." 2 The paragraph immediately
succeeding in such petition then alleged: "12. Respondent Judge, Honorable Guillermo P.Villasor, acted 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 pursuant thereto are null and void." 3 In the answer filed by
respondents, through counsel Andres T. Velarde and Marcelo B. Fernan, the facts set forth were admitted with
the only qualification being that the total award was in the amount of P2,372,331.40. 4
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." 5 Sociological jurisprudence supplies an answer not dissimilar.
So it was indicated in a recent decision, Providence Washington Insurance Co. v. Republic of the
Philippines, 6 with its affirmation that "a continued adherence to the doctrine of non-suability is not to be deplored
for as against the inconvenience that may be caused private parties, the loss of governmental efficiency and the
obstacle to the performance of its multifarious functions are far greater if such a fundamental principle were
abandoned and the availability of judicial remedy were not thus restricted. With the well known propensity on the
part of our people to go to court, at the least provocation, the loss of time and energy required to defend against
law suits, in the absence of such a basic principle that constitutes such an effective obstacle, could very well be
imagined." 7
This fundamental postulate underlying the 1935 Constitution is now made explicit in the revised charter. It is
therein expressly provided: "The State may not be sued without its consent." 8 A corollary, both dictated by logic
and sound sense from such 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. Thus in the recent
case of Commissioner of Public Highways v. San Diego, 9 such a well-settled doctrine was restated in the opinion
of Justice Teehankee: "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 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 of execution or garnishment to satisfy such judgments, is
based on obvious considerations of public policy. Disbursements of public funds must be covered by the
corresponding appropriation as required by law. The functions and public services rendered by the State cannot
be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects,
as appropriated by law." 10Such a principle applies even to an attempted garnishment of a salary that had
accrued in favor of an employee. Director of Commerce and Industry v. Concepcion, 11 speaks to that effect.
Justice Malcolm as ponente left no doubt on that score. Thus: "A rule, which has never been seriously
questioned, is that money in the hands of public officers, although it may be due government employees, is not
liable to the creditors of these employees in the process of garnishment. One reason is, that the State, by virtue of
its sovereignty, may not be sued in its own courts except by express authorization by the Legislature, and to
subject its officers to garnishment would be to permit indirectly what is prohibited directly. Another reason is that
moneys sought to be garnished, as long as they remain in the hands of the disbursing officer of the Government,
belong to the latter, although the defendant in garnishment may be entitled to a specific portion thereof. And still
another reason which covers both of the foregoing is that every consideration of public policy forbids it." 12
In the light of the above, it is made abundantly clear why the Republic of the Philippines could rightfully allege a
legitimate grievance.
WHEREFORE, 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. The preliminary injunction issued by this Court on July 12, 1969 is hereby made permanent.
Zaldivar, Antonio, Fernandez and Aquino, JJ ., concur.
Barredo, J ., did not take part.
||| (Republic v. Villasor, G.R. No. L-30671, [November 28, 1973], 153 PHIL 356-362)

epublic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-33112 June 15, 1978

PHILIPPINE NATIONAL BANK, petitioner,


vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of First Instance, Branch III, La Union, AGOO
TOBACCO PLANTERS ASSOCIATION, INC., PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, and
PANFILO P. JIMENEZ, Deputy Sheriff, La Union, respondents.

Conrado E. Medina, Edgardo M. Magtalas & Walfrido Climaco for petitioner.

Felimon A. Aspirin fit respondent Agoo 'Tobacco Planters Association, Inc.

Virgilio C. Abejo for respondent Phil. Virginia Tobacco Administration.

FERNANDO, Acting C.J.:

The reliance of petitioner Philippine National Bank in this certiorari and prohibition proceeding against respondent
Judge Javier Pabalan who issued a writ of execution, 1 followed thereafter by a notice of garnishment of the funds
of respondent Philippine Virginia Tobacco Administration, 2 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. This is not the first
time petitioner raised that issue. It did so before in Philippine National Bank v. Court of industrial
Relations, 3 decided only last January. It did not meet with success, this Court ruling in accordance with the two
previous cases of National Shipyard and Steel Corporation 4 and Manila Hotel Employees Association v. Manila
Hotel Company,5 that funds of public corporations which can sue and be sued were not exempt from garnishment.
As respondent Philippine Virginia Tobacco Administration is likewise a public corporation possessed of the same
attributes,6 a similar outcome is indicated. This petition must be dismissed.

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. 7There was a notice of garnishment for the full amount mentioned in such writ of execution in the sum of
P12,724,66. 8 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 petitioner's 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. 9 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." 10 Hence this certiorari and prohibition proceeding.

As noted at the outset, petitioner Philippine National Bank would invoke the doctrine of non-suability. 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." 11 If the funds
appertained to one of the regular departments or offices in the government, then, certainly, such a provision
would be a bar to garnishment. Such is not the case here. Garnishment would lie. Only last January, as noted in
the opening paragraph of this decision, this Court, in a case brought by the same petitioner precisely invoking
such a doctrine, left no doubt that the funds of public corporations could properly be made the object of a notice of
garnishment. Accordingly, this petition must fail.

1. The alleged grave abuse of discretion, the basis of this certiorari proceeding, was sought to be justified on the
failure of respondent Judge to set aside the notice of garnishment of funds belonging to respondent Philippine
Virginia Tobacco Administration. This excerpt from the aforecited decision of Philippine National Bank v. Court of
Industrial Relations makes manifest why such an argument is far from persuasive. "The premise that the funds
could be spoken as public character may be accepted in the sense that the People Homesite and Housing
Corporation was a government-owned entity. It does not follow though that they were exempt. from garnishment.
National Shipyard and Steel Corporation v. Court of Industrial Relations is squarely in point. As was explicitly
stated in the opinion of the then Justice, later Chief Justice, Concepcion: "The allegation to the effect that the
funds of the NASSCO are public funds of the government, and that, as such, the same may not be garnished,
attached or levied upon, is untenable for, as a government owned and controlled corporation, the NASSCO has a
personality of its own. distinct and separate from that of the Government. It has — pursuant to Section 2 of
Executive Order No. 356, dated October 23, 1950 ... , pursuant to which The NASSCO has been established —
all the powers of a corporation under the Corporation Law ... ." Accordingly, it may be sue and be sued and may
be subjected to court processes just like any other corporation (Section 13, Act No. 1459, as amended.)" ... To
repeat, the ruling was the appropriate remedy for the prevailing party which could proceed against the funds of a
corporate entity even if owned or controlled by the government." 12

2. The National Shipyard and Steel Corporation decision was not the first of its kind. The ruling therein could be
inferred from the judgment announced in Manila Hotel Employees Association v. Manila Hotel Company, decided
as far back as 1941. 13 In the language of its ponente Justice Ozaeta "On the other hand, 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. (Bank of the United States v. Planters' Bank, 9 Wheat. 904, 6 L.ed. 244). By engaging in a
particular business thru 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." 14 It is worth mentioning that Justice Ozaeta could find support for such a pronouncement from the
leading American Supreme Court case of united States v. Planters' Bank, 15 with the opinion coming from the
illustrious Chief Justice Marshall. It was handed down more than one hundred fifty years ago, 1824 to be exact. It
is apparent, therefore, that petitioner Bank could it legally set forth as a bar or impediment to a notice of
garnishment the doctrine of non-suability.

WHEREFORE, this petition for certiorari and prohibition is dismissed. No costs.

Barredo, Antonio, Aquino, and Santos, JJ., concur.


Concepcion, Jr., J., is on leave.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-15751 January 28, 1961

BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO LEDESMA, petitioners,


vs.
THE BUREAU OF PRINTING EMPLOYEES ASSOCIATION (NLU), PACIFICO ADVINCULA, ROBERTO
MENDOZA, PONCIANO ARGANDA and TEODULO TOLERAN, respondents.

Office of the Solicitor General for petitioners.


Eulogio R. Lerum for respondents.

GUTIERREZ DAVID, J.:

This is a petition for certiorari and prohibition with preliminary injunction to annul Certain orders of the respondent
Court of Industrial Relations and to restrain it from further proceeding in the action for unfair labor practice
pending before it on the ground of lack of jurisdiction. Giving due course to the petition, this Court ordered the
issuance of the writ of preliminary injunction prayed for without bond.

The action in question was — upon complaint of the respondents Bureau of Printing Employees Association
(NLU) Pacifico Advincula, Roberto Mendoza, Ponciano Arganda and Teodulo Toleran — filed by an acting
prosecutor of the Industrial Court against herein petitioner Bureau of Printing, Serafin Salvador, the Acting
Secretary of the Department of General Services, and Mariano Ledesma the Director of the Bureau of Printing.
The complaint alleged that Serafin Salvador and Mariano Ledesma have been engaging in unfair labor practices
by interfering with, or coercing the employees of the Bureau of Printing particularly the members of the
complaining association petition, in the exercise of their right to self-organization an discriminating in regard to
hire and tenure of their employment in order to discourage them from pursuing the union activities.

Answering the complaint, the petitioners Bureau of Printing, Serafin Salvador and Mariano Ledesma denied the
charges of unfair labor practices attributed to the and, by way of affirmative defenses, alleged, among other
things, that respondents Pacifico Advincula, Roberto Mendoza Ponciano Arganda and Teodulo Toleran were
suspended pending result of an administrative investigation against them for breach of Civil Service rules and
regulations petitions; that the Bureau of Printing has no juridical personality to sue and be sued; that said Bureau
of Printing is not an industrial concern engaged for the purpose of gain but is an agency of the Republic
performing government functions. For relief, they prayed that the case be dismissed for lack of jurisdiction.
Thereafter, before the case could be heard, petitioners filed an "Omnibus Motion" asking for a preliminary hearing
on the question of jurisdiction raised by them in their answer and for suspension of the trial of the case on the
merits pending the determination of such jurisdictional question. The motion was granted, but after hearing, the
trial judge of the Industrial Court in an order dated January 27, 1959 sustained the jurisdiction of the court on the
theory that the functions of the Bureau of Printing are "exclusively proprietary in nature," and, consequently,
denied the prayer for dismissal. Reconsideration of this order having been also denied by the court in banc, the
petitioners brought the case to this Court through the present petition for certiorari and prohibition.

We find the petition to be meritorious.

The Bureau of Printing is an office of the Government created by the Administrative Code of 1916 (Act No. 2657).
As such instrumentality of the Government, it operates under the direct supervision of the Executive Secretary,
Office of the President, and is "charged with the execution of all printing and binding, including work incidental to
those processes, required by the National Government and such other work of the same character as said
Bureau may, by law or by order of the (Secretary of Finance) Executive Secretary, be authorized to
undertake . . .." (See. 1644, Rev. Adm. Code). It has no corporate existence, and its appropriations are provided
for in the General Appropriations Act. Designed to meet the printing needs of the Government, it is primarily a
service bureau and obviously, not engaged in business or occupation for pecuniary profit.

It is true, as stated in the order complained of, that the Bureau of Printing receives outside jobs and that many of
its employees are paid for overtime work on regular working days and on holidays, but these facts do not justify
the conclusion that its functions are "exclusively proprietary in nature." Overtime work in the Bureau of Printing is
done only when the interest of the service so requires (sec. 566, Rev. Adm. Code). As a matter of administrative
policy, the overtime compensation may be paid, but such payment is discretionary with the head of the Bureau
depending upon its current appropriations, so that it cannot be the basis for holding that the functions of said
Bureau are wholly proprietary in character. Anent the additional work it executes for private persons, we find that
such work is done upon request, as distinguished from those solicited, and only "as the requirements of
Government work will permit" (sec. 1654, Rev. Adm. Code), and "upon terms fixed by the Director of Printing, with
the approval of the Department Head" (sec. 1655, id.). As shown by the uncontradicted evidence of the
petitioners, most of these works consist of orders for greeting cards during Christmas from government officials,
and for printing of checks of private banking institutions. On those greeting cards, the Government seal, of which
only the Bureau of Printing is authorized to use, is embossed, and on the bank cheeks, only the Bureau of
Printing can print the reproduction of the official documentary stamps appearing thereon. The volume of private
jobs done, in comparison with government jobs, is only one-half of 1 per cent, and in computing the costs for work
done for private parties, the Bureau does not include profit because it is not allowed to make any. Clearly, while
the Bureau of Printing is allowed to undertake private printing jobs, it cannot be pretended that it is thereby an
industrial or business concern. The additional work it executes for private parties is merely incidental to its
function, and although such work may be deemed proprietary in character, there is no showing that the
employees performing said proprietary function are separate and distinct from those employed in its general
governmental functions.

From what has been stated, it is obvious that the Court of Industrial Relations did not acquire jurisdiction over the
respondent Bureau of Printing, and is thus devoid of any authority to take cognizance of the case. This Court has
already held in a long line of decisions that the Industrial Court has no jurisdiction to hear and determine the
complaint for unfair labor practice filed against institutions or corporations not organized for profit and,
consequently, not an industrial or business organization. This is so because the Industrial Peace Act was
intended to apply only to industrial employment, and to govern the relations between employers engaged in
industry and occupations for purposes of gain, and their industrial employees. (University of the Philippines, et al.
vs. CIR, et al., G.R. No. L-15416, April 28, 1960; University of Sto. Tomas vs. Villanueva, et al., G.R. No. L-
13748, October 30, 1959; La Consolacion College vs. CIR, G.R. No. L-13282, April 22, 1960; See also the cases
cited therein.) .

Indeed, as an office of the Government, without any corporate or juridical personality, the Bureau of Printing
cannot be sued. (Sec. 1, Rule 3, Rules of Court). Any suit, action or proceeding against it, if it were to produce
any effect, would actually be a suit, action or proceeding against the Government itself, and the rule is settled that
the Government cannot be sued without its consent, much less over its objection. (See Metran vs. Paredes, 45
Off. Gaz. 2835; Angat River Irrigation System, et al. vs. Angat River Workers' Union, et. al., G.R. Nos. L-10943-
44, December 28, 1957).

The record also discloses that the instant case arose from the filing of administrative charges against some
officers of the respondent Bureau of Printing Employees' Association by the Acting Secretary of General Services.
Said administrative charges are for insubordination, grave misconduct and acts prejudicial to public service
committed by inciting the employees, of the Bureau of Printing to walk out of their jobs against the order of the
duly constituted officials. Under the law, the Heads of Departments and Bureaus are authorized to institute and
investigate administrative charges against erring subordinates. For the Industrial Court now to take cognizance of
the case filed before it, which is in effect a review of the acts of executive officials having to do with the discipline
of government employees under them, would be to interfere with the discharge of such functions by said officials.
WHEREFORE, the petition for a writ of prohibition is granted. The orders complained of are set aside and the
complaint for unfair labor practice against the petitioners is dismissed, with costs against respondents other than
the respondent court.

Bengzon, Bautista Angelo, Labrador, Paredes and Dizon, JJ., concur.


Reyes, J.B.L., J., concurs in the result.
EN BANC

[G.R. No. L-23139. December 17, 1966.]

MOBIL PHILIPPINES EXPLORATION, INC., plaintiff-


appellant, vs. CUSTOMS ARRASTRE SERVICE and BUREAU OF CUSTOMS, defendants-
appellees.

Alejandro Basin, Jr. & Associates for plaintiff-appellant.


Felipe T . Cuison for defendants-appellees.

SYLLABUS

1. REMEDIAL LAW; PARTIES TO CIVIL ACTION. — 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.
2. ID.; ID.; BUREAU OF CUSTOMS OR CUSTOMS ARRASTRE SERVICE NOT PERSONS:
IMMUNITY FROM SUIT. — Neither the Bureau of Customs (a fortiori) nor 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, Rev. Adm. Code); and
the Customs Arrastre Service is a unit of the Bureau of Customs, set up underCustoms Administrative Order
No. 8-62 of November 9, 1962. It follows that defendants herein cannot be sued under the first two above-
mentioned categories of natural or juridical persons.
3. ARRASTRE SERVICE; NATURE OF ARRASTRE SERVICE. — The statutory provision
on arrastre service is found in Section 1213 of Republic Act 1937 (Tariff and Customs Code, effective June 1,
1957). The statutory provisions authorizing the grant by contract to any private party of the right to render
said arrastre services necessarily imply that the same is deemed by Congress to be proprietary or non-
governmental function.
4. ID.; PERFORMANCE BY NON-CORPORATE GOVERNMENT ENTITY OF PROPRIETARY
FUNCTIONS DOES NOT MAKE IT SUABLE. — The fact that a non-corporate government entity performs a
function proprietary in nature does not necessarily result in its being suable. If said non-governmental function
is undertaken as an incident to its governmental function, there is no waiver thereby of the sovereign immunity
from suit extended to such government entity (Bureau of Printing, et al., vs. Bureau of Printing Employees
Association, et al., G.R. No. L-15751, January 28, 1961).
5. ID.; ARRASTRE FUNCTION OF BUREAU OF CUSTOMS ALTHOUGH PROPRIETARY IS
NECESSARY INCIDENT TO ITS GOVERNMENTAL FUNCTION. — Although said arrastre function may be
deemed proprietary, it is a necessary incident of the primary and governmental function of the Bureau
ofCustoms, so that engaging in the same does not necessarily render said Bureau liable to suit. For otherwise,
it could not perform its governmental function without necessarily exposing itself to suit. Sovereign immunity
granted as to the end, should not be denied as to the necessary means to that end.
6. ADMINISTRATIVE LAW; NATURE OF FUNCTIONS OF BUREAU
OF CUSTOMS; ARRASTRE SERVICE NECESSARY INCIDENT TO FUNCTIONS OF BUREAU. — The
Bureau of Customs is part of the Department of Finance (Sec. 81, Rev. Adm. Code), with no personality of its
own apart from that of the national government. Its primary function is governmental, that of assessing and
collecting lawful revenues from imported articles and all other tariff andcustoms duties, fees, charges, fines,
and penalties (Sec. 602, Republic Act No. 1937). To this function, arrastre service is a necessary incident. For
practical reasons said revenues and customs duties cannot be assessed and collected by simply receiving the
importer's or ship agent's or consignee's declaration of merchandise being imported and imposing the duty
provided in the Tariff law. Customs authorities and officers must see to it that the declaration tallies with the
merchandise actually landed. And this checking up requires that the landed merchandise be hauled from the
ship's side to a suitable place in the customs premises to enable said customs officers to make it, that is, it
requires arrastre operations.
7. CONSTITUTIONAL LAW; STATE CANNOT BE SUED WITHOUT ITS CONSENT. — Regardless of
the merits of the claim against it, the State, for obvious reasons of public policy, cannot be sued without its
consent. Plaintiff should have filed its present claim with the General Auditing Office, it being for money, under
the provisions of Commonwealth Act No. 327, which state the conditions under which money claims against
the Government may be filed.
8. ID.; ID.; BUREAU OF CUSTOMS IMMUNE FROM SUIT. — The Bureau of Customs, acting as part
of the machinery of the national government in the operation of the arrastre service, pursuant to express
legislative mandate and as a necessary incident of its prime governmental function, is immune from suit, there
being no statute to the contrary.
9. ID.; ID.; STATUTORY PROVISIONS WAIVING STATE IMMUNITY FROM SUIT, HOW
CONSTRUED. — Statutory provisions waiving State immunity from suit are strictly construed and waiver of
immunity, being in derogation of sovereignty, will not be lightly inferred (49 Am. Jur., States, Territories and
Dependencies, Sec. 96, p. 314; Petty vs. Tennessee-Missouri Bridge Com, 359 U.S. 275, 3 L. Ed. 804, 79 S.
Ct. 785).

DECISION

BENGZON, J.P., J p:

Four cases of rotary drill parts were shipped from abroad on S.S. "Leoville" sometime in November of
1962, consigned to Mobil PhilippinesExploration, 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 then handling arrastre operations therein. The Customs Arrastre Service later delivered to the
broker of the consignee three cases only of the shipment. cdphil
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.
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 Servicenor 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.
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 Customs, set up under Customs Administrative Order
No. 8-62 of November 9, 1962 (Annex "A" to Motion to Dismiss, pp. 13-15, Record on Appeal). It follows that
the defendants herein cannot be sued under the first two above-mentioned categories of natural or juridical
persons.
Nonetheless it is urged that by authorizing the Bureau of Customs to engage in arrastre service, the
law thereby impliedly authorizes it to be sued asarrastre 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 arrastreservice at the Port of Manila, which, it is alleged,
amounts to the transaction of a private business.
The statutory provision on arrastre service is found in Section 1213 of Republic Act No. 1937 (Tariff
and Customs Code, effective June 1, 1957), and it states:
"SECTION 1213. Receiving, Handling, Custody and Delivery of Articles. — The Bureau
of Customs shall have exclusive supervision and control over the receiving, handling, custody
and delivery of articles on the wharves and piers at all ports of entry and in the exercise of its
functions it is hereby authorized to acquire, take over, operate and superintend such plants and
facilities as may be necessary for the receiving, handling, custody and delivery of articles, and
the convenience and comfort of passengers and the handling of baggage, as well as to acquire
fire protection equipment for use in the piers:Provided, That whenever in his judgment the
receiving, handling, custody and delivery of articles can be carried on by private parties with
greater efficiency, the Commissioner may, after public bidding and subject to the approval of
the department head, contract with any private party for the service of receiving, handling,
custody and delivery of articles, and in such event, the contract may include the sale or lease of
government-owned equipment and facilities used in such service."
In Associated Workers Union, et al., vs. Bureau of Customs, et al., L-21397, resolution of August 6,
1963, this Court indeed held "that the foregoing statutory provisions authorizing the grant by contract to any
private party of the right to render said arrastre services necessarily imply that the same is deemed by Congress
to be proprietary or non-governmental function." The issue in said case, however, was whether laborers
engaged in arrastre servicefall under the concept of employees in the Government employed in governmental
functions for purposes of the prohibition in Section 11, Republic Act 875 to the effect that "employees in the
Government . . . shall not strike," but "may belong to any labor organization which does not impose the obligation
to strike or to join in strike" which prohibition "shall apply only to employees employed in governmental functions
of the Government. . . ."
Thus, the ruling therein was that the Court of Industrial Relations had jurisdiction over the subject matter
of the case, but not that the Bureau ofCustoms can be sued. Said issue of suability was not resolved, the
resolution stating only that "the issue on the personality or lack of personality of the Bureau of Customs to be
sued does not affect the jurisdiction of the lower court over the subject matter of the case, aside from the fact
that amendment may be made in the pleadings by the inclusion as respondents of the public officers deemed
responsible for the unfair labor practice acts charged by petitioning Unions".
Now, the fact that a non-corporate government entity performs a function proprietary in nature does not
necessarily result in its being suable. If said non-governmental function is undertaken as an incident to its
governmental function, there is no waiver thereby of the sovereign immunity from suit extended to such
government entity. This is the doctrine recognized in Bureau of Printing et al., vs. Bureau of Printing Employees
Association, et al., L-15751, January 25, 1961:
"The Bureau of Printing is an office of the Government created by the Administrative
Code of 1916 (Act No. 2657). As such instrumentality of the Government, it operates under the
direct supervision of the Executive Secretary, Office of the President, and is 'charged with the
execution of all printing and binding, including work incidental to those processes, required by
the National Government and such other work of the same character as said Bureau may, by
law or by order of the (Secretary of Finance) Executive Secretary, be authorized to
undertake. . . .' (Sec. 1644, Rev. Adm. Code). It has no corporate existence, and its
appropriations are provided for in the General Appropriations Act. Designed to meet the printing
needs of the Government, it is primarily a service bureau and, obviously, not engaged in
business or occupation for pecuniary profit.
xxx xxx xxx
". . . Clearly, while the Bureau of Printing is allowed to undertake private printing jobs, it
cannot be pretended that it is thereby an industrial or business concern. The additional work it
executes for private parties is merely incidental to its function, and although such work may be
deemed proprietary in character, there is no showing that the employees performing said
proprietary function are separate and distinct from those employed in its general governmental
functions.
xxx xxx xxx
"Indeed, as an office of the Government, without any corporate or judicial personality,
the Bureau of Printing cannot be sued. (Sec. 1, Rule 3, Rules of Court.) Any suit, action or
proceeding against it, if it were to produce any effect, would actually be a suit, action or
proceeding against the Government itself, and the rule is settled that the Government cannot
be sued without its consent much less over its objection. (See Metran vs. Paredes, 45 Off.
Gaz., 2835; Angat River Irrigation System, et al., vs. Angat River Workers Union, et al., G.R.
Nos. L-10943-44, December 28, 1957.)"
The situation here is not materially different. The Bureau of Customs, to repeat, is part of the
Department of Finance (Sec. 81, Rev. Adm. Code), with no personality of its own apart from that of the national
government. Its primary function is governmental, that of assessing and collecting lawful revenues from
imported articles and all other tariff and customs duties, fees, charges, fines and penalties (Sec. 602, R. A.
1937). To this function, arrastreservice is a necessary incident. For practical reasons said revenues
and customs duties can not be assessed and collected by simply receiving the importer's or ship agent's or
consignee's declaration of merchandise being imported and imposing the duty provided in the Tariff
law. Customs authorities and officers must see to it that the declaration tallies with the merchandise actually
landed. And this checking up requires that the landed merchandise be hauled from the ship's side to a suitable
place in the customs premises to enable said customs officers to make it, that is, it requires arrastre operation.
1
Clearly, therefore, although said arrastre function may be deemed proprietary, it is a necessary incident
of the primary and governmental function of the Bureau of Customs, so that engaging in the same does not
necessarily render said Bureau liable to suit. For otherwise, it could not perform its governmental function
without necessarily exposing itself to suit. Sovereign immunity, granted as to the end, should not be denied as
to the necessary means to that end. liblex
And herein lies the distinction between the present case and that of National Airports Corporation vs.
Teodoro, 91 Phil., 203, on which appellant would rely. For there, the Civil Aeronautics Administration was found
to have for its prime reason for existence not a governmental but a proprietary function, so that to it the latter
was not a mere incidental function:
"Among the general powers of the Civil Aeronautics Administration are, under Section
3, to execute contracts of any kind, to purchase property, and to grant concession rights, and
under Section 4, to charge landing fees, royalties on sales to aircraft of aviation gasoline,
accessories and supplies, and rentals for the use of any property under its management.
"These provisions confer upon the Civil Aeronautics Administration, in our opinion, the
power to sue and be sued. The power to sue and be sued is implied from the power to transact
private business . . .
xxx xxx xxx
"The Civil Aeronautics Administration comes under the category of a private entity.
Although not a body corporate it was created, like the National Airports Corporation, not to
maintain a necessary function of government, but to run what is essentially a business, even if
revenue be not its prime objectives but rather the promotion of travel and the convenience of
the traveling public . . ."
Regardless of the merits of the claim against it, the State, for obvious reasons of public policy, cannot
be sued without its consent. Plaintiff should have filed its present claim with the General Auditing Office, it being
for money, under the provisions of Commonwealth Act 327, which state the conditions under which money
claims against the Government may be filed.
It must be remembered that statutory provisions waiving State immunity from suit are strictly construed
and that waiver of immunity, being in derogation of sovereignty, will not be lightly inferred. (49 Am. Jur., States,
Territories and Dependencies, Sec. 96, p. 314; Petty vs. Tennessee-Missouri Bridge Com., 359 U.S. 275, 3 L.
Ed. 804, 79 S. Ct. 785.) From the provision authorizing the Bureau of Customs to lease arrastre operations to
private parties, We see no authority to sue the said Bureau in the instances where it undertakes to conduct said
operation itself. The Bureau of Customs, acting as part of the machinery of the national government in the
operation of the arrastre service, pursuant to express legislative mandate and as a necessary incident of its
prime governmental function, is immune from suit, there being no statute to the contrary. cda
WHEREFORE, the order of dismissal appealed from is hereby affirmed, with costs against appellant.
So ordered.
Concepcion, C .J ., Reyes, J.B.L., Barrera, Dizon, Regala, Zaldivar, and Sanchez, JJ ., concur.
Makalintal, J ., concurs in the result.
Castro, J ., reserves his vote.
||| (Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, G.R. No. L-23139, [December 17, 1966], 125
PHIL 270-279)

Republic of the Philippines


SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-52179 April 8, 1991

MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner


vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIÑA, IAUREANO BANIÑA, JR., SOR MARIETA
BANIÑA, MONTANO BANIÑA, ORJA BANIÑA, AND LYDIA R. BANIÑA, respondents.

Mauro C. Cabading, Jr. for petitioner.


Simeon G. Hipol for private respondent.

MEDIALDEA, J.:

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
his capacity as the presiding judge of the Court of First Instance of La Union, Second Judicial District, Branch IV,
Bauang, La Union in Civil Case No. 107-BG, entitled "Juana Rimando Baniña, et al. vs. Macario Nieveras, et al."
dated November 4, 1975; July 13, 1976; August 23,1976; February 23, 1977; March 16, 1977; July 26, 1979;
September 7, 1979; November 7, 1979 and December 3, 1979 and the 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.

The antecedent facts are as follows:

Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and in accordance
with the laws of the Republic of the Philippines. Respondent Honorable Judge Romeo N. Firme is impleaded in
his official capacity as the presiding judge of the Court of First Instance of La Union, Branch IV, Bauang, La
Union. While private respondents Juana Rimando-Baniña, Laureano Baniña, Jr., Sor Marietta Baniña, Montano
Baniña, Orja Baniña and Lydia R. Baniña are heirs of the deceased Laureano Baniña Sr. and plaintiffs in Civil
Case No. 107-Bg before the aforesaid court.
At about 7 o'clock in the morning of December 16, 1965, a collision occurred involving a passenger jeepney
driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a gravel and sand truck driven by Jose
Manandeg and owned by Tanquilino Velasquez and a dump truck of the Municipality of San Fernando, La Union
and driven by Alfredo Bislig. Due to the impact, several passengers of the jeepney including Laureano Baniña Sr.
died as a result of the injuries they sustained and four (4) others suffered varying degrees of physical injuries.

On December 11, 1966, the private respondents instituted a compliant for damages against the Estate of Macario
Nieveras and Bernardo Balagot, owner and driver, respectively, of the passenger jeepney, which was docketed
Civil Case No. 2183 in the Court of First Instance of La Union, Branch I, San Fernando, La Union. However, the
aforesaid defendants filed a Third Party Complaint against the petitioner and the driver of a dump truck of
petitioner.

Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent judge and was
subsequently docketed as Civil Case No. 107-Bg. By virtue of a court order dated May 7, 1975, the private
respondents amended the complaint wherein the petitioner and its regular employee, Alfredo Bislig were
impleaded for the first time as defendants. Petitioner filed its answer and raised affirmative defenses such as lack
of cause of action, non-suability of the State, prescription of cause of action and the negligence of the owner and
driver of the passenger jeepney as the proximate cause of the collision.

In the course of the proceedings, the respondent judge issued the following questioned orders, to wit:

(1) Order dated November 4, 1975 dismissing the cross-claim against Bernardo Balagot;

(2) Order dated July 13, 1976 admitting the Amended Answer of the Municipality of San Fernando, La
Union and Bislig and setting the hearing on the affirmative defenses only with respect to the supposed
lack of jurisdiction;

(3) Order dated August 23, 1976 deferring there resolution of the grounds for the Motion to Dismiss until
the trial;

(4) Order dated February 23, 1977 denying the motion for reconsideration of the order of July 13, 1976
filed by the Municipality and Bislig for having been filed out of time;

(5) Order dated March 16, 1977 reiterating the denial of the motion for reconsideration of the order of July
13, 1976;

(6) Order dated July 26, 1979 declaring the case deemed submitted for decision it appearing that parties
have not yet submitted their respective memoranda despite the court's direction; and

(7) Order dated September 7, 1979 denying the petitioner's motion for reconsideration and/or order to
recall prosecution witnesses for cross examination.

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-Baniña, Mrs. Priscilla B. Surell, Laureano Baniña Jr., Sor Marietta
Baniña, Mrs. Fe B. Soriano, Montano Baniña, Orja Baniña and Lydia B. Baniña the sums of P1,500.00 as
funeral expenses and P24,744.24 as the lost expected earnings of the late Laureano Baniña 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.

SO ORDERED. (Rollo, p. 30)


Petitioner filed a motion for reconsideration and for a new trial without prejudice to another motion which was then
pending. However, respondent judge issued another order dated November 7, 1979 denying the motion for
reconsideration of the order of September 7, 1979 for having been filed out of time.

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.
(Rollo, p. 42.) In addition, the private respondents stress that petitioner has not considered that every court,
including respondent court, has the inherent power to amend and control its process and orders so as to make
them conformable to law and justice. (Rollo, p. 43.)

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 non-suability of the State amounting to lack of
jurisdiction in a motion to dismiss.

In the case at bar, the respondent judge deferred the resolution of the defense of non-suability of the State
amounting to lack of jurisdiction until trial. However, said respondent judge failed to resolve such defense,
proceeded with the trial and thereafter rendered a decision against the municipality and its driver.

The respondent judge did not commit grave abuse of discretion when in the exercise of its judgment it arbitrarily
failed to resolve the vital issue of non-suability of the State in the guise of the municipality. However, said judge
acted in excess of his jurisdiction when in his decision dated October 10, 1979 he held the municipality liable for
the quasi-delict committed by its regular employee.

The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Constitution, to
wit: "the State may not be sued without its consent."

Stated in simple parlance, the general rule is that the State may not be sued except when it gives consent to be
sued. Consent takes the form of express or implied consent.

Express consent may be embodied in a general law or a special law. The standing consent of the State to be
sued in case of money claims involving liability arising from contracts is found in Act No. 3083. A special law may
be passed to enable a person to sue the government for an alleged quasi-delict, as in Merritt v. Government of
the Philippine Islands (34 Phil 311). (see United States of America v. Guinto, G.R. No. 76607, February 26, 1990,
182 SCRA 644, 654.)

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. (Ibid)

Municipal corporations, for example, like provinces and cities, 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. (Cruz, Philippine Political Law, 1987 Edition, p. 39)

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." (United States of America vs. Guinto, supra, p. 659-660)

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. As emphasized in the case of Torio vs. Fontanilla (G. R. No. L-29993,
October 23, 1978. 85 SCRA 599, 606), the distinction of powers becomes important for purposes of determining
the liability of the municipality for the acts of its agents which result in an injury to third persons.

Another statement of the test is given in City of Kokomo vs. Loy, decided by the Supreme Court of Indiana in
1916, thus:

Municipal corporations exist in a dual capacity, and their functions are twofold. In one they exercise the
right springing from sovereignty, and while in the performance of the duties pertaining thereto, their acts
are political and governmental. Their officers and agents in such capacity, though elected or appointed by
them, are nevertheless public functionaries performing a public service, and as such they are officers,
agents, and servants of the state. In the other capacity the municipalities exercise a private, proprietary or
corporate right, arising from their existence as legal persons and not as public agencies. Their officers
and agents in the performance of such functions act in behalf of the municipalities in their corporate or
individual capacity, and not for the state or sovereign power." (112 N.E., 994-995) (Ibid, pp. 605-606.)

It has already been remarked that municipal corporations are suable because their charters grant them the
competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the
discharge of governmental functions and can be held answerable only if it can be shown that they were acting in a
proprietary capacity. In permitting such entities to be sued, the State merely gives the claimant the right to show
that the defendant was not acting in its governmental capacity when the injury was committed or that the case
comes under the exceptions recognized by law. Failing this, the claimant cannot recover. (Cruz, supra, p. 44.)

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." (Rollo, p. 29.)

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 (102 Phil 1186) 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.

SO ORDERED.

Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.