Reyniere M.

Alo

Republic of the Philippines vs. Villasor, G:R No.30671, November 28, 1973

Facts:

The decision was rendered in favor of respondents P.J. Kiener Co, Ltd., Gavino
Unchuan, and InternationalConstruction Corporation and against petitioner confirming
the arbitration award in the amount of P1,712,396.40. The award is for the satisfaction of
a judgment against the Philippines Government .

Hon. Guillermo Villasor issued an Order declaring the decision final and
executory. Villasor directed the Sheriffs of Rizal Province, Quezon City as well as
Manila to execute the said decision. The Provincial Sheriff of Rizal served Notices of
Garnishment with several Banks, specially on Philippine Veterans Bank and PNB. The
funds of the Armed Forces of the Philippines on deposit with Philippine Veterans Bank
and PNB 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 AFP.

The Republic filed prohibition proceedings against respondent Judge Villasor for
acting in excess of jurisdiction with grave abuse of discretion amounting to lack of
jurisdiction in granting the issuance of a Writ of Execution against the properties of the
AFP, hence the notices and garnishment are null and void.

Issue:

Whether or not the writ of execution issued by Hon. Judge Villasor is valid

Ruling:

No, the writ of executed issued by Hon. Judge Villasor is not valid.

The act 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 and its government are immune from suit unless it
gives its consent. 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.

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 the 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
Tan vs. Director of Forestry G.R. No. L- 24548 October 27, 1983

Facts:

This is an appeal, from the order dated January 20, 1965 of the then Court of First
instance of Manila, Branch 7. The facts of the case are as follows:

Sometime in April 1961, the Bureau of Forestry issued a notice, advertising for
public bidding a certain tract of public forest land situated in Olongapo, Zambales
which consisted 6,420 hectares, within the former U.S Naval Reservation, compromising
7,252 hectares of timberland which was turned over by the United States Government
to the Philippine Government. Wenceslao Tan, along with nine others summited their
application in due form.

The area was granted to the petitioner. The Secretary of Agriculture and Natural
Resources, Secretary Benjamin M. Gozon, issued a general memorandum order giving
authority to the Director of Forestry to grant new Ordinary Timber Licenses (OTL)
subject to some conditions stated therein. Pertinent portions of said memorandum of
which state

Thereafter, Jose Y. Feliciano was appointed as Acting Secretary of Agriculture

and Natural resources, replacing secretary Benjamin M. Gozon. He then immediately
promulgated on December 19, 1963 a memorandum revoking the authority delegated to
the Director of Forestry to grant ordinary timber licenses. On the same date, OTL in the
name of Tan, was signed by then Acting Director of Forestry, without the approval of
the Secretary of Agriculture and Natural Resources. On January 6, 1964, the license was
released by the Director of Forestry.

Ravago Commercial Company wrote a letter to the Secretary of ANR praying

that the OTL of Tan be revoked. On March 9, 1964, The Secretary of ANR declared Tan’s
OTL null and void (but the same was not granted to Ravago). Petitioner-appellant
moved for a reconsideration of the order, but the Secretary of Agriculture and Natural
Resources denied the motion.

Issue:

Whether or not the Director of Forestry may properly be sued

Ruling:

No, the Director of Forestry may not properly be sued.

In the rule established by State exemption from suits may not be circumvented
by directing the action against the officers of the State instead of against the State itself.
In such cases the State's immunity may be validly invoked against the action as long as
it can be shown that the suit really affects the property, rights, or interests of the State
and not merely those of the officer nominally made party defendant.

Petitioner’s timber license was signed and released without authority and is
therefore void ab initio. In the first place, in the general memorandum dated May 30,
1963, the Director of Forestry was authorized to grant a new ordinary timber license
only where the area covered thereby was not more than 3,000 hectares; the tract of
public forest awarded to the petitioner contained 6,420 hectares In the second place, at
the time it was released to the petitioner, the Acting Director of Forestry had no more
authority to grant any license. (The license was released to the petitioner on January 6,
1964 while on the other hand, the authority of the Director of Forestry to issue license
was revoked on December 19, 1963). In view thereof, the Director of Forestry had no
longer any authority to release the license on January 6, 1964, and said license is
therefore void ab initio. What is of greatest importance is the date of the release or
issuance? Before its release, no right is acquired by the licensee.

Granting arguendo, that petitioner-appellant's timber license is valid, still respondents-

appellees can validly revoke his timber license. "A license is merely a permit or
privilege to do what otherwise would be unlawful, and is not a contract between the
authority, federal, state, or municipal, granting it and the person to whom it is granted;
neither is it property or a property right, nor does it create a vested right; nor is it
taxation

Republic of the Philippines vs. Feliciano G.R. No. 70853. March 12, 1987

Facts:
 Respondent Pablo Feliciano filed a complaint with the Court of First Instance
against the Republic of the Philippines, represented by the Land Authority, for the
recovery of ownership and possession of a parcel of land. 

The trial court rendered a decision declaring Lot No. 1 to be the private property
of Feliciano and the rest of the property reverted to the public domain.

The 86 settlers of Barrio of Salvacion, representing the Republic of the

Philippines filed to appeal to dismiss the complaint filed by Feliciano, on the ground
that the Republic of the Philippines cannot be sued without its consent.

  Prior to this appeal, respondent Pablo Feliciano filed a complaint with the Court
of First Instance against the Republic of the Philippines, represented by the Land
Authority, for the recovery of ownership and possession of a parcel of land consisting
of four lots. The trial court rendered a decision declaring Lot No. 1 to be the private
property of Feliciano and the rest of the property, Lots 2, 3 and 4, reverted to the public
domain. 

The trial court reopened the case due to the filing of a motion to intervene and to
set aside the decision of the trial court by 86 settlers, alleging that they had been in
possession of the land for more than 20 years under claim of ownership. The trial court
ordered the settlers to present their evidence but they did not appear at the day of
presentation of evidence. Feliciano, on the other hand, presented additional evidence.
Thereafter, the case was submitted for decision and the trial court ruled in favor of
Feliciano.

  The settlers immediately filed a motion for reconsideration. The case was
reopened to allow them to present their evidence. But before this motion was acted
upon, Feliciano filed a motion for execution with the Appellate Court but it was denied.

  The settlers filed a motion to dismiss on the ground that the Republic of the
Philippines cannot be sued without its consent and hence the action cannot prosper.
The motion was opposed by Feliciano.

Issue:

Whether or not the state can be sued for recovery and possession of a parcel
of land

Ruling:

No, the state cannot be sued for the recovery and possession of a parcel of land
without its consent.

The doctrine of non-suability of the State under settled jurisprudence is not

permitted, except upon a showing that the State has consented to be sued, either
expressly or impliedly. The plaintiff has impleaded the Republic of the Philippines as
defendant in an action for recovery of ownership and possession of a parcel of land,
bringing the State to court just like any private person who is claimed to be usurping a
piece of property. A suit for the recovery of property is not an action, but an
action in personal. It is an action directed against a specific party or parties, and any
judgment therein binds only such party or parties. The complaint involves land not
owned by the state but private land belonging to Feliciano, hence the government is not
being divested of any of its propertyies.

Philippine National Bank vs. Judge Javier Pabalan, G.R. No. L-33112, June 15, 1978

Facts:

Judge Javier Pabalan issued a writ of execution on December 17, 1970 followed
by a notice of garnishments on the funds of the Philippine Virginia Tobacco
Administration (PVTA) in the amount of P12, 724.66. It was deposited in the Philippine
National Bank in La Union. An administrative complaint against Judge Pabalan was
filed by the PNB of La Union for grave abuse of discretion. They alleged that the latter
failed to recognize that the funds in question were of public character and may not be
garnished or levied upon. PNB of La Union invoked the doctrine of non-suability,
putting a bar on the notice of garnishment.

Issue: 

Whether or not the Philippine National Bank may be sued

Ruling: 

Yes, the Philippine National Bank may be sued.

 The Public corporation funds are not exempt from garnishment. Same goes with
PVTA, which is also a public corporation. The government had entered into a
commercial business with them hence abandoning its sovereign capacity. Therefore, it
is subject to rules governing ordinary corporations and in effect can be sued. Petition of
PNB La Union is hereby denied.

Department of Agriculture vs. NLRC, G.R. No. 104269, November 11, 1993

Facts:

Petitioner, herein Department of Agriculture (DA) and Sultan Security Agency

entered into a contract for security services. Guards were deployed by Sultan Security
Agency in pursuant to their agreement to provide the DA security. Several guards,
thereafter, filed numerous complaints for underpayment of wages, nonpayment of the
13th month pay, uniform allowance, night shift differential pay, holiday pay and
overtime pay. Included are also damages against the DA and the security agency.

The Labor Arbiter founded the DA jointly and severally liable with the security
agency. DA and the security agency did not appeal with the decision of the Labor
Arbiter, hence the decision became final and executory. The Labor Arbiter then issued a
writ of execution for the judgment against the property of the Department of
Agriculture and the security agency. City sheriff then levied on execution the motor
vehicles of the Department of Agriculture.

Department of Agriculture, filed a petition for injunction, prohibition and

mandamus, with prayer for preliminary writ of injunction was filed by the petitioner
with the NLRC CDO, saying that the writ issued was affected without the labor
arbiter’s jurisdiction over the petitioner. DA also pointed out that the attachment or
seizure of its property would hamper and jeopardize petitioner's governmental
functions to the prejudice of the public good.

This petition charges NLRC with grave abuse of discretion for refusing to quash
the writ of execution. The NLRC has disregarded the cardinal rule on the non-suability
of the State. NLRC argued on the other hand that the DA has impliedly waived its
immunity from suit by concluding a service contract with Sultan Agency.

Issue:

Whether or not the doctrine of non-suability of the State applies in the case

Ruling:

No, the doctrine of non-suability of the State may not applies in the case

“The State may not be sued without its consent” simply shows the sovereign
character of the state and an express affirmation of the unwritten rule. It is based on the
very essence of sovereignty. A sovereign is exempt from suit simply because there can
be no legal right against the authority from which makes the law and on which its
rights depend on.

This rule however is not absolute for the state may be sued. The State may give its
consent expressly or impliedly. Express consent is made through special laws while
implied consent is when the state itself commences litigation, or when it enters into a
contract. In the case at bar, the government is deemed to have divested itself of its
sovereign immunity.

But not all contracts are waivers of its non-suability. A distinction must be made
between the exercise of the government function or one that is done within its
proprietary capacity. In this case, the DA has not assumed a capacity apart from its
governmental entity when it entered into the contract. Nor could it have performed any
act proprietary in character.

The claims by the security guards constitute money claims. Act No. 3038 gives consent
of the State to be sued involving money claims. However, pursuant to CA 327, as
amended by PD 1445, the money claim must first be brought to the COA.

Mobil Philippines Exploration vs. Customs Arrastre Service, G.R. No. L-23139,
December 17, 1966

Facts:

Aboard S.S. Leoville, four cases of rotary drill parts were being shipped from
abroad, consigned to Mobil Philippines Exploraation, Inc., Manila. It was discharged to
the custody of Customs Arrastre Service. Customs Arrastre Service later delivered only
three cases to the broker of the consignee. Mobil Philippines Exploration Inc., filed a suit
against Customs Arrastre Service and the Bureau of Customs to recover the value of the
undelivered case which amounted to P18, 493. 37 plus damages. Defendants then filed a
motion to dismiss on the ground that they cannot be sued. Appellant contends that not
all government entities are immune to suit. The Bureau of Customs as operator of the
Arrastre service is discharging proprietary functions and such can be sued.

Issue:

Whether or not the defendants can invoke state immunity

Ruling:

Yes, the defendants can invoke state immunity.

The non-corporate government entities that perform a proprietary function does

not mean it can be sued. If said non-governmental function is undertaken as an
incidental governmental function, there is no waiver of its immunity. The Bureau of
Customs, is part of the Department of finance. Its primary function is governmental. To
this function, Arrastre Services is a necessary incident. Clearly, it is a necessary incident
of the primary and governmental function of the Bureau of Customs, and does not
necessarily render said Bureau liable to suit. Sovereign immunity, granted as to the end,
should not be denied.

National  Airports Corporation vs. Jose Teodoro G.R.No.5122. April 30, 1952

Facts:

The National Airports Corporation was organized under Republic Act No. 224,

which expressly made the provisions of the Corporation Law applicable to the said
corporation.
 On November 10, 1950, the National Airports Corporation was abolished by
Executive Order No. 365 and to take its place the Civil Aeronautics Administration was
created. Before the abolition, the Philippine Airlines, Inc. paid to
the National Airports Corporation P65,245 as fees for landing and parking on Bacolod
Airport .

These fees are said to have been due and payable to the Capitol Subdivision, Inc.
which owned the land used by the National Airports Corporation as airport, and the
owner commenced an action in the Court of First Instance of Negros Occidental against
the Philippine Airlines, Inc., in 1951 to recover the amount.

The Philippine Airlines, Inc. countered with a third-party complaint against

the National Airports Corporation, which by that time had been dissolved, and served
summons on the Civil Aeronautics Administration.

The third-party plaintiff alleged that it had paid to

the National Airports Corporation the fees claimed by the Capitol Subdivision, Inc. "on
the belief and assumption that the Philippine Airlines was the lessee of the lands subject
of the complaint and that the third-party defendant and its predecessor in interest were
the operators and maintainers of said Bacolod Airport and, further, that the Philippine
Airline would pay to the landowners, particularly the Capitol subdivision, Inc., the
reasonable rentals for the use of their lands.

The Solicitor-General, after answering the third-party complaint, filed a motion

to dismiss on the ground that the court lacks jurisdiction to entertain the third-party
complaint, first, because the National Airports Corporation "has lost its juridical
personality, and, second, because the Civil Aeronautics Administration being an office
or agency of the Republic of the Philippines, unincorporated and not possessing
juridical personality under the law, is incapable of suing and being sued.

Isuue:

Whether or not government agency may be sued

Ruling:

Yes, government agency may be sued.

Not all government entities, whether corporate or non-corporate, are immune to

suits. Immunity from suits is determined by the character of the objects for which the
entity was organized. "Suits against state agencies with relation to matters in which
they have assumed to act in a private or non-governmental capacity, and various suits
against certain corporations created by the state for public purposes, but to engage in
matters partaking more of the nature of ordinary business rather than functions of a
governmental or political character, are not regarded as suits against the state. The latter
is true, although the state may own the stock or property of such a corporation, for by
engaging in business operations through a corporation the state divests itself so far of
its sovereign character, and by implication consents to suits against the corporation

Among the general powers of the Civil Aeronautics Administration to

execute contracts of any kind, to purchase property, and to grant concession rights,
and 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 confer upon the Civil Aeronautics Administration the power to
sue and be sued, which is implied from the power to transact private business. And
if it has the power to sue and be sued on its behalf, the Civil Aeronautics
Administration with greater reason should have the power to prosecute and defend
suits for and against the National Airports Corporation, having acquired all the
properties, funds and chooses in action and assumed all the liabilities of the latter.

The National Airports Corporation is abolished for all purposes; it can not be

regarded as still in existence even for the limited object of winding up its affairs. No
trustees, assignees or receivers have been designated to make a liquidation thereof
and, what is more, there is nothing to liquidate, as everything
the National Airports Corporation had, has been taken over by the Civil Aeronautics
Administration. To all legal intents and practical purposes, said corporation is dead
and the Civil Aeronautics Administration is its heir or legal representative, acting by
the law of its creation upon its own rights and in its own name.

Philippine National Bank vs. Commissioner of Internal Revenue G:R. No. 172458,
December 14, 2011

Facts:

The motion to quash a notice of garnishment by the petitioner was denied for lack of
merit. The funds sought to be garnished was the money of the People’s Homesite and
Housing Corporation deposited at petitioners branch in Quezon City for the satisfaction
of a decision by the respondent court which was final and executory. A writ of
execution was ruled in favor of private respondent Gabriel V. Manansala, the counsel of
the prevailing party, United Home site and Housing Corp. Validity of the order is
challenged on two grounds: that the appointment of respondent Gilbert P. Lorenzo as
authorized deputy sheriff toserve the writ of execution was contrary to law and the
funds subject of the garnishment "may be public in character.

The Bank argues that the Sheriff of Quezon city has the authority to serve the notice
of garnishment and not the clerk of this court who is its Ex-officio Sheriff and that the
actual service by the latter officer is therefore not in order.

Issue:

Whether or not the funds may be garnished

Ruling:

No, the funds of may not be garnished.

The 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. Also the doctrine of non-suability is that the government funds
are immune from garnishment.

In the case of 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 sue and be
sued and may be subjected to court processes just like any other corporation (Section 13,
Act No. 1459), as amended.

In a 1941 decision, Manila Hotel Employees Association v. Manila

Hotel  Company  ,this Court, through Justice Ozaeta, held: "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, Wheat, 904, 6 L.ed. 244). By engaging in a particular business
thru the instrumentality of a corporation, the governmnent divests itself pro hac vice
of its sovereign character, so as to render the corporation subject to the rules of law
governing private corporations."Both the Palacio and the Commissioner of Public
Highways decisions, insofar as they reiterate the doctrine that one of the coronaries
of the fundamental concept of non-suability is that governmental funds are immune
from garnishment. It is an entirely different matter if, according to Justice Sanchez in
Ramos v. Court of Industrial Relations , the office or entity is "possessed of a separate and
distinct corporate existence." Then it can sue and be sued. Thereafter, its funds may be
levied upon or garnished.

Municipality of San Fernando vs. Judge Firme, G.R. No. 579 , April 8, 1991

Facts:

A collision involving a passenger jeepney, driven by Balagot and owned by the

Estate of MAcarioNieveras, a gravel and sand truck, driven by Jose Manandeg, owned
by Tanquilino Velasquez and a dump truck of the Municipality of San Fernando, driven
by Alfredo Bislig happened on December 16, 1965 resulting to 4 suffering physical
injuries and several of the passengers, including LaureanoBaniña, died.

The heirs of Baniña filed a complaint for damages against the estate of Nieveras
and Balagot which in turn filed a Third Party complaint against the petitioner and
driver of the dump truck. The case was given to Judge Firme who rendered in its
decision the Municipality and Bislig jointly and severally liable.

Issue:

Whether or not Municipality of San Fernando is liable

Ruling:

No, Municipality of San Fernando cannot be held liable by virtue of the non-
suability of the State.

The general rule is that the State may not be sued except when it gives consent to
be sued (Article XVI, Sec. 3 of the Constitution.) 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.

Consent is implied when the government enters into business contracts and also
when the State files a complaint. Municipal corporations are agencies of the State when
they are engaged in governmental functions and therefore should enjoy the sovereign
immunity from suit

However, 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.

Hence, the SC held that the driver of the dump truck was performing duties or
tasks pertaining to his office. Municipality cannot be held liable for the torts committed
by its regular employee, who was then engaged in the discharge of governmental
functions.
Merritt vs. Government of Philippine Islands G.R. No. 11154, March 21, 1916

Facts:

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

This took place in the 1910’s, E. Merrit, a constructor at that time who had a
notable reputation, was riding his motorcycle alone Calle Padre Faura. As he was riding
his motorcycle, he was bumped by a government ambulance. It was later proven that
the driver of the said ambulance had been negligent. Merrit was hospitalized because of
the said incident, having been severely injured beyond rehabilitation. This was
according to Dr. Saleeby who had examined Merrit upon his arrival at the hospital. He
also noted that Merrit was unconscious. Because of the said injuries, he could never
perform his job the way he used to and because of such was unable to earn even half of
what he used to earn. Several witnesses testified to this saying that prior to the incident,
Merrit was of good condition and was excellent in what he did. There was an obvious
depreciation of his physical condition. Having lost the agility, energy, and ability he
had constantly displayed. As a contractor even the simplest of things like climbing up
ladders to reach the higher parts of the building was impossible for him.

Merrit then later sought to sue the government in order to recover damages. He was
then later authorized to sue by virtue of Act 2457, enacted by the legislature.

Issue: 

Whether or not the government is liable for the negligent act of the driver of the
ambulance

Ruling: 

No, the government is not liable for the negligent act of the driver of the
ambulance.

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. 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. The State can only be liable if 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.

In the case at bar, the ambulance driver was not a special agent nor was a
government officer acting as a special agent hence, there can be no liability from the
government. “The Government 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.”
United States of America vs. Guinto, G.R. No. 76607, February 26, 1990

Facts:

In the 4 consolidated suits, the USA moves to dismiss the cases on the ground
that they are in effect suits against it which it has not consented On the first suit: On
February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, US
Air Force, solicited bids for barber services 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 Bidding was won
by Ramon Dizon over the objection of the private respondents who claimed that he had
made a bid for 4 facilities, including the Civil Engineering Area which was not included
in the invitation to bid The Philippine Area Exchange (PHAX), through its
representatives petitioners Yvonne Reeves and Frederic M. Smouse, upon the private
respondents' complaint, explained that the Civil Engineering concession had not been
awarded to Dizon But Dizon was already operating this concession, then known as the
NCO club concession.

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 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
Respondent court directed 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 USA
which had not waived its non-suability On July 22, 1986, trial court denied the
application for a writ of preliminary injunction On Oct. 10, 1988, trial court denied the
petitioners' motion to dismiss.

On the second suit: 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 US Air Force Recreation Center at the John Hay Air Station in
Baguio City It had been ascertained that Genove had poured urine into the soup stock
used in cooking the vegetables served to the club customers His dismissal was effected
on March 5, 1986 by Col. David C. Kimball, Commander of the 3rd Combat Support
Group, PACAF Clark Air Force Base Genove filed a complaint in the RTC of Baguio The
defendants, joined by the United States of America, moved to dismiss the complaint,
alleging that Lamachia (the manager) as an officer of the US Air Force was immune
from suit for the acts done by him in his official capacity; they argued that the suit was
in effect against USA, which had not given its consent to be sued Motion was denied by
respondent judge: although acting initially in their official capacities, the defendants
went beyond what their functions called for; this brought them out of the protective
mantle of whatever immunities they may have had in the beginning,

On the third suit: Luis Bautisa, 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 Tomi J. King, Darrel D. Dye and Stephen F.
Bostick, officers of the US Air Force and special agents of the Air Force of Special
Investigators (AFOSI) Bautista was dismissed from his employment as a result of the
filing of the charge.

He then filed a complaint for damages against the individual petitioners,

claiming that it was because of their acts that he was removed Defendants alleged that
they had only done their duty in the enforcement of laws of the Philippines inside the
American bases, pursuant to the RP-US Military Bases Agreement. The counsel for the
defense invoked that the defendants were acting in their official capacity; that the
complaint was in effect a suit against the US without its consent Motion was denied by
respondent judge: 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.

On the fourth suit: Complaint for damages was filed by private respondents
against the petitioners (except USA) According to the plaintiffs, the defendants beat
them up, handcuffed the, and unleashed dogs on them Defendants deny this and claim
that the plaintiffs were arrested for theft and were bitten by dogs because they were
struggling and resisting arrest USA and the defendants argued that the suit was in
effect a suit against the United States which had not given its consent to be sued; that
they were also immune from suit under the RP-US Bases Treaty for acts done by them
in the performance of their official functions Motion to dismiss was denied by the trial
court: the acts cannot be considered Acts of State, if they were ever admitted by the
defendants.

Issue:

Whether or not the defendants were immune from suit under the RP-US Bases
Treaty for acts done by them in the performance of their official duties

Ruling:

No, the defendants were immune from suit under the RP-US Bases Treaty for
acts done by them in the performance of their official duties

In international law, the rule that a State may not be sued without consent is a
generally accepted principle that the law of our land had adopted. Under the doctrine
of incorporation, we are still bound by the generally accepted principles of international
law even without affirmation.

Under this said doctrine, such principles have been incorporated in the law of
every civilized state as a condition and consequence of its membership in the society of
nations. All states are sovereign equals and cannot assert jurisdiction over one another.
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 states 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, the suit must be regarded as against the state although it has not been
formally impleaded. 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.
It bears stressing at this point that the aforesaid principle do not confer on the USA 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 USA, like any other state, will be deemed to have
impliedly waived its non-suability if it has entered into a contract in its proprietary or
private capacity (commercial acts/jure gestionis). It is only when the contract involves
its sovereign or governmental capacity (governmental acts/jure imperii) that no such
waiver may be implied.

The Republic of Indonesia vs Vinzon G:R. No. 54705, June 26, 2003

Facts:

In August 1995, the Republic of Indonesia entered into a Maintenance

Agreement for its specified buildings in the embassy with respondent James Vinzon as
sole proprietor of Vinzon Trade and Services. The said Agreement was effective for four
years and will renew itself automatically unless cancelled by either party by giving
thirty days prior written notice from the date of expiry. Before August 1999, respondent
was informed that the renewal of the agreement shall be at the discretion ofthe
incoming Chief of Administration, petitioner Minister Counsellor Azhari Kasim.

On August 31, 2000, the Indonesian Embassy terminated the said agreement.
Respondent claimed that the said termination was arbitrary and unlawful. Thus, he
filed a complaint against The Republic of Indonesia in the Regional Trial
Court of Makati, Branch 145. In response, The Republic of Indonesia filed a motion to
dismiss by alleging that the Republic of Indonesia has sovereign immunity from suit
and that Ambassador Soeratmin and Minister Counsellor Kasim enjoy diplomatic
immunity. The trial court denied petitioners' motion to dismiss. The Court of Appeals
likewise denied petitioners' petition forcertiorari and prohibition in relation thereto.
Hence, this petition for review on certiorari.

Issue:

Whether or not the Republic of Indonesia can invoke the sovereign immunity
from suit

Ruling:

No, The Republic of Indonesia cannot invoke the sovereign immunity from suit.

The Court held that the immunity of the sovereign is recognized only with
regard to public acts or acts jure imperii, but not with regard to private acts or acts jure
gestionis. In this case, there is no dispute that the establishment of a diplomatic mission
is an act jure imperii. A sovereign state does not merely establish a diplomatic mission
and leave it at that; the establishment of a diplomatic mission encompasses its
maintenance and up keep.

Hence, the State may enter into contracts with private entities to maintain the
premises, furnishings and equipment of the embassy and the living quarters of its
agents and officials. It is, therefore, clear that The Republic of Indonesia was acting in
pursuit of a sovereign activity when it entered into a contract with respondent for the
upkeep or maintenance of the air conditioning units, generator sets, electrical facilities,
water heaters, and water motor pumps of the Indonesian Embassy and the official
residence of the Indonesian ambassador.

Moreover, the act of petitioners Ambassador Soeratmin and Minister Counsellor

Kasim in terminating the Maintenance Agreement is not covered by the exceptions
provided in Article 31 of the Vienna Convention on Diplomatic Relations. Accordingly,
the petition was granted and the complaint against petitioners was dismissal.
United  States of America vs.  Hon. Ruiz G.R. No.35645. May 22, 1985

Facts:

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.

The United States invited the submission of bids for the following projects:

to repair fender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines;
to 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.

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.
 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.

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.

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.

Issue:

Whether or not the United States of America exercising governmental functions

and can invoke immunity from suit

Ruling:

Yes, the United States of America exercising governmental functions and

can invoke immunity from suit

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 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. 
 In this case, the projects are an integral part of the naval base which is devoted to
the defense of both the US and the Philippines, indisputably afunction of the
government of the highest order; they are not utilized for nor dedicated to
commercialor business purposes

Fernando A. Froilan vs. Pan Oriental Shipping Co. G:R No. 6060. September 30,
1954

Facts:

Fernando A. Froilan, filed a complaint against the defendant-appellant, Pan

Oriental Shipping Co., alleging that he purchased from the Shipping Commission the
vessel FS-197 for P200,000, paying P50,000 down and agreeing to pay the balance in
installments; that to secure the payment of the balance of the purchase price, he
executed a chattel mortgage of said vessel in favor of the Shipping Commission; that for
various reasons, among them the non-payment of the installments, the Shipping
Commission tool possession of said vessel and considered the contract of sale cancelled;
that the Shipping Commission chartered and delivered said vessel to the defendant-
appellant Pan Oriental Shipping Co. subject to the approval of the President of the
Philippines; that he appealed the action of the Shipping Commission to the President of
the Philippines and, in its meeting on August 25, 1950, the Cabinet restored him to all
his rights under his original contract with the Shipping Commission; that he had
repeatedly demanded from the Pan Oriental Shipping Co. the possession of the vessel
in question but the latter refused to do so. He, therefore, prayed that, upon the approval
of the bond accompanying his complaint, a writ of replevin be issued for the seizure of
said vessel with all its equipment and appurtenances, and that after hearing, he be
adjudged to have the rightful possession thereof.

On March 1, 1951, Pan Oriental Shipping Co. filed its answer denying the right of
Froilan to the possession of the said vessel; it alleged that the action of the Cabinet on
August 25, 1950, restoring Froilan to his rights under his original contract with the
Shipping Commission was null and void; that, in any event, Froilan had not complied
with the condition precedent imposed by the Cabinet for the restoration of his rights to
the vessel under the original contract; that it suffered damages in the amount of P22,
764.59 for wrongful replevin in the month of February, 1951, and the sum of P17,651.84
a month as damages suffered for wrongful replevin from March 1, 1951; it is alleged
that it has incurred necessary and useful expenses on the vessel amounting to
P127,057.31 and claimed the right to retain said vessel until its useful and necessary
expenses had been reimbursed.

On November 10, 1951, after the leave of the lower court had been obtained, the
intervenor-appellee, Government of the Republic of the Philippines, filed a complaint in
intervention alleging that Froilan had failed to pay to the Shipping Commission (which
name was later changed to Shipping Administration) the balance due on the purchase
price of the vessel in question, the interest excluding the dry-docking expenses incurred
on said vessel by the session of the said vessel either under the terms of the original
contract as supplemented by Froilan's letter dated January 28, 1949, or in order that it
may cause the extrajudicial sale thereof under the Chattel Mortgage Law. It, therefore,
prayed that Froilan be declared to be without any rights on said vessel and the amounts
he paid thereon forfeited or alternately that the said vessel be delivered to the Board of
Liquidators in order that the inter-venor may have its chattel mortgage extra-judicially
foreclosed in accordance with the provisions of the Chattel Mortgage Law.

The Government of the Republic of the Philippines filed a motion to dismiss the
counterclaim of the Pan Oriental Shipping Co. against it on the ground that the purpose
of said counterclaim was to compel the Government of the Republic of the Philippines
to deliver the vessel to it (Pan Oriental Shipping Co.) in the event that the Government
of the Republic of the Philippines recovers the vessel in question from Froilan.
Issue:

Whether or not the Court has jurisdiction over the intervenor with regard to the
counterclaim

Ruling:

Yes, Court has jurisdiction over the intervenor with regard to the counterclaim.

 The government impliedly allowed itself to be sued when it filed a complaint in

intervention for the purpose of asserting claim for affirmative relief against the plaintiff
to the recovery of the vessel. The immunity of the state from suits does not deprive it of
the right to sue private parties in its own courts. The state as plaintiff may avail itself of
the different forms of actions open to private litigants. In short, by taking the initiative
in an action against a private party, the state surrenders its privileged position and
comes down to the level of the defendant. The latter automatically acquires, within
certain limits, the right to set up whatever claims and other defenses he might have
against the state.

When the government enters into a contract, for the State is then deem to have
divested itself of the mantle of sovereign immunity and descended to the level of the
ordinary individual. Having done so, it becomes subject to judicial action and processes.

 
Victoria  Amigable vs. Nicolas Cuenca G:R 26400. February 29, 1972

Facts:

Victoria Amigable is the registered owner of lot in Banilad Estate in Cebu

City.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.

Issue:

Whether or not Victoria Amigable may properly sue the government under the
facts of the case

Ruling:

Yes, Victoria Amigable may properly sue the government under the facts
of the case.

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.

When 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.