State Immunity

Art. XVI. The State may not be sued without its consent.
[Royal Prerogative of Dishonesty]
Outline of Topics:
I. Suability/Immunity
II. Liability
III. Execution
1999, No. 6 – What do you understand by State Immunity from Suit?

1998, 13: What is the Doctrine of State Immunity in International Law?

DECS, without the benefit of a public
bidding, decided to award a contract for
the purchase of P100M worth of text
books to A. X, another textbook supplier,
filed suit for injunction to restrain DECS.
DECS moved to dismiss the suit on the
ground of immunity. Is DECS correct?
DOH v. Phil. Pharmawealth, 518 SCRA 240
(2007)
The doctrine is not available in suits for
injunction and mandamus. The reason is
that will not result to monetary or property
loss to the government.
Also Philippine Agila Satellite v. Trinidad-
Lichauco, 489 SCRA 160 (2006
 State Immunity: Suits against State--
1. When Republic is sued by name, except
when ultimate liability will fall on the official
[Republic v. Sandoval, 220 SCRA 124
(1993)
2. When suit is against an unincorporated
government entity
3. When it is against a government officer, but
ultimate liability will fall not to the officer but
to the government [PC-Sucia]
 When will liability fall on the government?

1. When their actions have authority under law; and

2. They perform it in a legal manner

DOH – When they perform unlawful or unauthorized acts

and are sued for damages, they cannot claim immunity.
(good faith)
Calub v. CA, 331 SCRA 55 (2000) (seizure of lumber);
Lansang v. CA, 326 SCRA 259 (2000)
1990, No. 10
 The Secretary of Public Works, after an
investigation, ordered the demolition of the fish
pond of X as a nuisance per se on the ground
that it encroached on navigable rivers. The
Supreme Court later found that the rivers were
manmade and were constructed on private
property owned by X. May X recover damages
from the Secretary? (Mabutol v. Pascual, 124
SCRA 876)
 Forms of Waiver of Immunity:
1. Express: by means of a law:
A. Act. 3083. “hereby consents and submits to be sued upon any
moneyed claim involving liability arising from contract, expressed or
implied”
B. Civil Code, Art. 2189-Provinces, cities and municipalities shall be
liable for damages for the death of, or injuries suffered by, any person
by reason of defective conditions of road, streets, bridges, public
buildings, and other public works under their control or supervision.
2. Implied:
 a. Enters into a contract (proprietary capacity, not jus
emperii)
Heirs of Mendoza v. DPWH, 729 SCRA 654 (2014) –
building of roads
PTA v. Philippine Golf, 668 SCRA 406 (2012) –
construction of golf course
 b. Commences litigation (counter-claim) [Froilan v.
Pan Shipping, 95 Phil. 905 (1950); Republic v.
Sandiganbayan, 484 SCRA 119 (2006)
3. When it accepts a conditional donation Department
of Education v. Onate, 524 SCRA 200 (2007)
(unincorporated entity)
4. When it takes over private property without
compensation
5. In cases of implied contracts
EPG Construction v. Vigilar, 354 SCRA 566 (2001)
Housing units where contractors were assured that
payments are coming
6. Gross negligence – Republic v. Unimex, 518 SCRA
19 (2007) [Bureau of Customs]
 Principle on Consent:
 Since it is a derogation of sovereignty, it
is strictly construed against the individual
and in favor of the State.
 Sandoval ---
1996, No. 6:
 How may consent to be sued be given?

 2001, No. 3: The Republic, through the

DPWH constructed a new highway
traversing a land owned by Mang Pandoy.
It did not pay compensation. When sued,
it filed a motion to dismiss invoking
immunity. Resolve. 1987/1992
1998, No. 1:
 The Department of National Defense entered
into a contract with Raintree Corporation for the
supply of ponchos to the AFP, stipulating that in
the event of breach, action may be filed in the
proper court in Manila.
 Suppose AFP fails to pay for delivered
ponchos, where must Raintree Corp file its
claim?
 Royal Traders Bank- NMPC

 Professional v. TESDA, 591 SCRA 83

(2009)–security printed ID to those
certified
II. Liability – Consent to be sued is not an
admission of liability. You are given the chance
to prove, except Art. 2180 which admits liability
once certain conditions have been proved.
Civil Code, Art. 2189-Provinces, cities and
municipalities shall be liable for damages for the
death of, or injuries suffered by, any person by
reason of defective conditions of road, streets,
bridges, public buildings, and other public works
under their control or supervision.
 1997, No. 6: It is said that “waiver of
immunity by the state does not mean a
concession of liability.” What are the
implications of this phrase?
III. Enforceabilty/Execution—

 Republic v. Hidalgo, 477 SCRA 32 (2005)

 After holding the Republic of the
Philippines liable for the payment of about
P2 Billion in a default judgment, the RTC
judge issued a writ of execution against it.
 Is the judge administratively liable for
gross ignorance of the law?
I
A. National Government/agencies with no
separate personality – no execution, no
garnishment of funds or property
/Procedure? (File claim with COA)
Exception: PTA v. Philippine Golf, 668 SCRA
406 (2012) –Funds had been included in the
Budget Act of 2007 to satisfy a Supreme
Court decision
A. Incorporated agencies – Yes [NHA v. Heirs of
Guivelondo, 404 SCRA 389 (2003) with
separate legal personality
B. Local government:
 1. Appropriated funds may be garnished
(Nessia v. Fermin, 220 SCRA 615 (1993)
 2. Property held in non-governmental
capacity may be executed
Execution/ Attatchment
1. Can a writ of preliminary attachment be
issued against a municipality?
Municipality v. Dumdum (2010)
2. Can execution pending appeal be
granted? (discretionary execution)
Curata v. PPA, 590 SCRA 214 (2009)–
Other Cases:
(1) Can the Philippine Tourism Authority, a
government agency whose main function is to promote
tourism, be sued for collection of sum of money arising
from its failure to pay for the construction of a golf
course? PTA v. Philippine Golf, 668 SCRA 406 (2012)
(2) If a private person enters into a contract with the
DPWH for the building of roads and DPWH fails to pay
him, can he sue DPWH on the ground that by entering
into a contract it waived its immunity? Heirs of Mendoza
v. DPWH, 729 SCRA 654 (2014):
 (3) Can a judgment against the National Housing
Authority (NHA) directing it to execute a contract of sale
involving a lot at a specific price and to pay attorney’s
fees of P30,000 be enforced by a Writ of Execution?
NHA v. Roxas, 773 SCRA 358 (2015)
(4) Considering that in the hands of a government
agency, the salaries of an employee are government
funds not subject to execution on the ground of immunity
from suit, is RA No. 9262 which authorizes courts “an
appropriate percentage of the salary of respondent to be
withheld regularly by the respondent’s employer to be
remitted directly to the woman valid?” Republic v.
Yahon, 726 SCRA 438 (2014)
Other recent cases:
 Republic v. Fetalvero, G.R. No. 198008, Feb. 4, 2019
 Fetalvero won a money judgment against the Republic of the Philippines in a
case filed by the latter for the expropriation of his land. The judgment, whuch was
based on a compromise, became final. Can Fetalvero obtain a writ of execution or
cause the garnishment of funds considering that money has already been
appropriated law for the payment of road-right of way in Region 10?
 Held: No. It is settled jurisprudence that upon determination of State liability, the
prosecution, enforcement or satisfaction thereof must still be pursued in accordance
with the rules and procedures laid down in Presidential Decree No. 1445, otherwise
known as the Government Auditing Code of the Philippines (Department of
Agriculture v. NLRC, 227 SCRA 693 [1993] . All money claims against the
Government must first be filed with the Commission on Audit which must act upon it
within sixty days. Rejection of the claim will authorize the claimant to elevate the
matter to the Supreme Court on certiorari and in effect sue the State thereby.
Without this necessary procedural step, Fetalvero 's money claim cannot be
entertained by the courts through a writ of execution.
Local Government Units
(1) Can you sue a Local Government Unit for
sum of money arising from breach of contract for
construction of a port? Province of Aklan v.
Jody King, 711 SCRA 60 (2013)
(2) Suppose you were able to obtain a
money judgment against a Local Government
unit and it refuses to pay voluntarily, can the
court issue a writ of execution against the LGU?
Rallos v. City of Cebu, 704 SCRA 378 (2013)
3. What is the status of a decision where
the governmental entity entered into trial
without invoking its immunity, when it
could have done so, and judgment was
rendered against it which has become
final? Province of Aklan v. Jody King, 711
SCRA 60 (2013
Jaime v. Apostol, 572 SCRA 41 (2008) –
Negligent driver who was driving the mayor to
the airport when he hit and killed somebody.
Can the mayor be held civilly liable?
Can the municipality be sued and held liable?

Are they liable? (San Fernando v. Firme)

1. if governmental function- no
2. if proprietary - yes
But:
 City of Bacolod v. Phuture Visions, G.R. No. 190289, Jan. 17, 2018
 The City of Bacolod padlocked a bingo outlet operated by Phture Visions on the
ground that it was operating without a Mayor’s Permot. It filed a suit against the City,
but the case was dismissed by the Regional Trial Court. On appeal, the dismissal
was modified by the Court of Appeals by ordering the RTC to received evidence on
the damage claimed by plaintiff. Considering that the City of Bacolod had not given
its consent to the suit, was the CA correct? In any case, can the City of Bacolod
raise its immunity from suit for the first time before the Supreme Court?
 Held: The issuance of a business permit by the City Mayor is not in the performance
of a proprietary function. The act is regulatory in nature which is essnetiallly an
exercise of police power. No consent to be sued and be liable for damages can thus
be implied from the mere conferment and exercise of the power to issue business
permits and licences. Accordingly, there is merit in the City’s argument that it cannot
be sued by respondent since the City's consent had not been secured for this
purpose. This is notwithstanding petitioner’s' failure to raise this exculpatory defense
at the first instance before the trial court or even before the appellate court. As this
Court has repeatedly held, waiver of immunity from suit, being in derogation of
sovereignty, will not be lightly inferred. Moreover, it deserves mentioning that the City
of Bacolod as a government agency or instrumentality cannot be estopped by the
omission, mistake or error of its officials or agents.
Local Government Code of 1991:
Section 22. Corporate Powers. -
 (a) Every local government unit, as a corporation, shall have the
following powers:
 (1) To have continuous succession in its corporate name;
 (2) To sue and be sued; (Jody King and Apostol seems to say no))

SEC. 24. Liability for Damages. - Local government units and their
officials are not exempt from liability for death or injury to persons or
damage to property. (Apostol seems to say distinguish)

Execution? No, unless there is prior appropriation…

 1994, No. 14:
 The Municipality of Antipolo expropriated the
property of Juan Reyes. The municipal council
appropriated P1,000,000 for the purchase of the
lot but the RTC fixed the value of P2,000,000.
 1. Can Juan Reyes ask the RTC to garnish
the municipality’s account with the Land Bank?
 2. What legal action can Juan Reyes take to
collect the balance?
2013, No. 1. In the last quarter of 2012, about 5,000 container vans of imported goods
intended for the Christmas Season were seized by agents of the Bureau of Customs.
The imported goods were released only on January 10, 2013. A group of importers
got together and filed an action for damages before the Regional Trial Court of Manila
against the Department of Finance and the Bureau of Customs.
The Bureau of Customs raised the defense of immunity from suit and, alternatively,
that liability should lie with XYZ Corp. which the Bureau had contracted for the lease
of ten (1 0) high powered van cranes but delivered only five (5) of these cranes, thus
causing the delay in its cargo-handling operations. It appears that the Bureau,
despite demand, did not pay XYZ Corp. the Php 1.0 Million deposit and advance
rental required under their contract.

(A) wm the action by the group of importers prosper? (5%)

(B) Can XYZ Corp. sue the Bureau of Customs to collect rentals for the delivered
cranes? (5''/o)
 2017, No. 2 A. Under the doctrine of immunity from suit,
the State cannot be sued without its consent. How may
the consent be given by the State? Explain your answer.
(3%)
 B. The doctrine of immunity from suit in favor of the
State extends to public officials in the performance of
their official duties. May such officials be sued
nonetheless to prevent or to undo their oppressive or
illegal acts, or to compel them to act? Explain your
answer. (3%)
 C. Do government-owned or -controlled corporations
also enjoy the immunity of the State from suit? Explain
your answer. (3%)