DOCTRINE OF STATE IMMUNITY

Dotrine of Sovereign Immunity

The immunity of the State from suit, known also as the doctrine of sovereign immunity or nonsuability of the State, is expressly provided in Article XVI of the 1987 Constitution, viz: Section 3. The State may not be sued without its consent. The immunity from suit is based on the political truism that the State, as a sovereign, can do no wrong.

 General Rule: The State may not be sued without its consent Reason: There can be no legal right against the authority which makes the law on which the right depends

 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.

 Practical considerations dictate the establishment of an immunity from suit in favor of the State. Otherwise, and the State is suable at the instance of every other individual, government service may be severely obstructed and public safety endangered because of the number of suits that the State has to defend against.

 Several justifications have been offered to support the adoption of the doctrine in the Philippines, but that offered in Providence Washington Insurance Co. v. Republic of the Philippines is the most acceptable explanation, according to Father Bernas, a recognized commentator on Constitutional Law, to wit:

 [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.

 An unincorporated government agency without any separate juridical personality of its own enjoys immunity from suit because it is invested with an inherent power of sovereignty. Accordingly, a claim for damages against the agency cannot prosper; otherwise, the doctrine of sovereign immunity is violated. However, the need to distinguish between an unincorporated government agency performing governmental function and one performing proprietary functions has arisen. The immunity has been upheld in favor of the former because its function is governmental or incidental to such function; it has not been upheld in favor of the latter whose function was not in pursuit of a necessary function of government but was essentially a business.

Restriction in the Doctrine:

Not all government entities, whether corporate or non-corporate, are immune from suits. Immunity from suits is determined by the character of the objects for which the entity was organized. The rule is thus stated in Corpus Juris:

 Suits against State agencies with relation to matters in which they have assumed to act in private or nongovernmental 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 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. (59 C.J., 313) [National Airports Corporation v. Teodoro, supra, pp. 206-207; Italics supplied.]

 It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications, et al. vs. Aligaen, etc., et al.:

Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from suit.

 In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that, while claiming to act for the State, he violates or invades the personal and property rights or the plaintiff, under an unconstitutional act or under an assumption of authority which he does not have, is not a suit against the State within the constitutional provision that the State may not be sued without its consent.' The rationale for this ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an injustice.

When considered a suit against the State:

1.The Republic is sued by name; 2.Suits against an unincorporated government agency; 3.Suits is against a government official, but is such that ultimate liability shall devolve on the government: a. When a public officer acts in bad faith, or beyond the scope of his authority, he can be held personally liable for damages. b. BUT: If he acted pursuant to his official duties, without malice, negligence the suit, or bad faith, he is not personally liable, and is really one against the State

Republic v. Feliciano, 148 SCRA 424

Facts: Petitioner seeks the review of the decision of the Intermediate Appellate Court revising the order of the Court of First Instance which dismissed the complaint of Pablo Feliciano for the recovery of ownership and possession of a parcel of land on the ground of nonsuability of the State.

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 (4) lots with an aggregated area of 1,364.4177 hectares, situated in Barrio of Salvacion, Municipality of Tinambac, Camarines Sur.

Republic v. Feliciano, 148 SCRA 424

Feliciano alleged that he bought the property in question for Victor Gardiola by virtue of Contract of Sale and followed by a Deed of Absolute Sale; that Gardiola had acquired the property by purchase from the heirs of Francisco Abrazado whose title to the said property was evidenced by an informacion posesoria that upon his purchase of the property, he took actual possession of the same, introduced various improvements therein and caused it to be surveyed in July1952, which survey was approved by the Director of Lands on October 24, 1954.

Republic v. Feliciano, 148 SCRA 424

On November 1, 1954, President Ramon Magsaysay issued a Proclamation No. 90 reserving for settlement purposes, under the administration of the National Resettlement and Rehabilitation Administration (NARRA), a tract of land situated in the Municipalities of Tinambac and Siruma, Camarines Sur, after which the NARRA and its successor agency, the Land Authority, started subdividing and distributing the land to the settlers; that the property in question, while located within the reservation established under Proclamation No. 90, was the private property of Feliciano and should therefore be excluded.

Republic v. Feliciano, 148 SCRA 424

Feliciano prayed that he be declared the rightful and true owner of the property in question; that his title of ownership based on the informacion posesoria of his predecessor-in-interest be declared legal valid and subsisting and that defendant be ordered to cancel and nullify all awards to the settlers. ISSUE: Can the State be sued for recovery and possession of a parcel of land?

Republic v. Feliciano, 148 SCRA 424

RULING: No, the suit against the State, under settled jurisprudence is not permitted, except upon a showing that the State has consented to be sued, either expressly of by implication through the use of statutory language too plain to be misinterpreted. It may be invoked by the courts at any stage of the proceedings. Waiver of immunity, will not be inferred lightly, but must be construed strictly. Moreover, the Proclamation is not the legislative act. The consent of the State to be sued must emanate from statutory authority. Waiver of State immunity can only be made by act of the legislative body.

Philippine Agila Satellite Inc. v. Lichauco (G.R. No. 134887, July 27, 2006)
FACTS: Petitioner Philippine Agila Satellite Inc. is a duly organized corporation, whose President and Chief Executive Officer is co-petitioner Michael C.U. De Guzman. PASI was established by a consortium of private telecommunications carriers which in 1994 had entered into a Memorandum of Understanding with the DOTC, through its then Secretary Jesus Garcia, concerning the planned launch of a Philippine-owned satellite into outer space. The Philippine government, through the DOTC, was tasked under the MOU to secure from the International Telecommunication Union the required orbital slots and frequency assignments for the Philippine satellite.

Philippine Agila Satellite Inc. v. Lichauco

The government, together with PASI, coordinated through the International Telecommunication Union two orbital slots, designated as 161 East Longitude and 153 East Longitude, for Philippine satellites. PASI wrote then DOTC Secretary Amado S. Lagdameo, Jr., seeking for official Philippine government confirmation on the assignment of the two aforementioned Philippine orbital slots to PASI for its satellites. Secretary Lagdameo, Jr. replied in a letter confirming the Philippine Governments assignment of Philippine orbital slots 161E and 153E to PASI for its satellites.

Philippine Agila Satellite Inc. v. Lichauco

PASI averred that after having secured the confirmation from the Philippine government, it proceeded with preparations for the launching, operation and management of its satellites, including the availment of loans, the increase in its capital. However, respondent Lichauco, then DOTC Undersecretary for Communications, allegedly embarked on a crusade to malign the name of Michael de Guzman and sabotage the business of PASI. Aggrieved by Lichaucos actions, PASI and De Guzman instituted a civil complaint against Lichauco, by then the Acting Secretary of the DOTC. The complaint, alleging three causes of action, was for injunction, declaration of nullity of award, and damages. The third cause of action, for damages, imputed several acts to Lichauco as part of her alleged crusade to malign the name of plaintiff De Guzman and sabotage the business of PASI.

Philippine Agila Satellite Inc. v. Lichauco

ISSUE: Whether or not the suit is against the state HELD: The hornbook rule is that a suit for acts done in the performance of official functions against an officer of the government by a private citizen that would result in a charge against or financial liability to the government must be regarded as a suit against the State itself, although the latter has not been formally impleaded. However, government immunity from suit will not shield the public official being sued if the government no longer has an interest to protect in the outcome of a suit; or if the liability of the officer is personal because it arises from a tortuous act in the performance of his duties.

Philippine Agila Satellite Inc. v. Lichauco

As earlier noted, the complaint alleges three causes of action against Lichauco: one for injunction against her performing any act in relation to orbital slot 153 East Longitude; one for declaration of nullity of award, seeking to nullify the alleged award of orbital slot 153 East Longitude; and one for damages against Lichauco herself. As stated earlier, it is when the acts done in the performance of official functions by an officer of the government will result in a charge against or financial liability to the government that the complaint must be regarded as a suit against the State itself. However, the distinction must also be raised between where the government official concerned performs an act in his/her official and jurisdictional capacity and where he performs an act that constitutes grave abuse of discretion tantamount to lack of jurisdiction. In the latter case, the Constitution itself assures the availability of judicial review, and it is the official concerned who should be impleaded as the proper party- defendant or respondent.

Philippine Agila Satellite Inc. v. Lichauco

As to the first two causes of action, the Court ruled that the defense of state immunity from suit do not apply since said causes of action cannot be properly considered as suits against the State in constitutional contemplation. These causes of action do not seek to impose a charge or financial liability against the State, but merely the nullification of state action. The prayers attached to these two causes of action are for the revocation of the Notice of Bid and the nullification of the purported award, nothing more. Had it been so that petitioner additionally sought damages in relation to said causes of action, the suit would have been considered as one against the State. Had the petitioner impleaded the DOTC itself, an unincorporated government agency, and not Lichauco herself, the suit would have been considered as one against the State. But neither circumstance obtains in this case.

Philippine Agila Satellite Inc. v. Lichauco

The doctrine, as summarized in Shauff v. Court of Appeals (G.R. No. 90314, November 27, 1990) states: 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. It must be noted, however, that the rule is not so all-encompassing as to be applicable under all circumstances.

Forms of Consent
1. Express consent
o When the law expressly grants the authority to sue the State or any of its agencies. o Another example of express consent is the law enacted by the Philippine Legislature authorizing an individual to sue the Philippine Government for injuries he had sustained when his motorcycle collided with a government ambulance ( Merit vs RP 34 Phil 311)

2. Implied consent When the State enters into a private contract, unless the contract is only incidental to the performance of a government function (Santos vs Santos 92 Phil 281) When the State enters into an operation that is essentially a business operation, unless, the business operation is only incidental to the performance of a governmental function. (Mobile Philippines vs Customs Arrastre Services, 18 SCRA 1120, 1966) When the State sues a private party, the defendant can fila a counter-claim against the State, unless the suit is entered into only to resist claim (Lim vs Brownell 107 Phil 344, 1969)

Can the agencies of the Government of the Philippines be sued?

It depends on whether the government agency to be sued is incorporated or unincorporated. If it is incorporated, the rule is that it is suable if its charter says so and regardless of the function it is performing. If it is unincorporated, the rule is that it is suable if it is performing proprietary functions, and not suable if it is performing governmental functions.

Express Consent
a.) Money claims arising from contract

b.) Torts committed by special agents

c.) Incorporated Government Agencies (Unincorporated Agencies exercising principally proprietary function may be sued))

a. Money claims arising from contract

Republic v. Purisima, 78 SCRA 470 The Rice and Corn Administration (RCA) is part of the government being in fact an office under the office of the President and therefore, cannot be sued without the consent of the State. The consent to be effective must come from the State, acting through a duly enacted statute. Thus, whatever counsel for defendant RCA agreed to had no binding force in the government. That was clearly beyond the scope of his authority

a. Money claims arising from contract

Sayson v. Singson, 54 SCRA 282
Respondent Singson cause of action is a money claim against the government for the payment of the alleged balance of the cost of spare parts supplied by him to the Bureau of Public Highways. Assuming momentarily the validity of such claim, mandamus is not remedy to enforce the collection of such claim against the State, but an ordinary action for specific performance. The suit is against the State which cannot prosper or be entertained by the Court except with the consent of the State. The respondent should have filed his claim with the general auditing office under the provision of C.A. No. 327 which prescribe the condition under which money claim against the government may be filed

b. Torts Committed by special agents (NCC, Art. 2180)

Meritt v. Government, 34 Phil. 311 (1916)
The facts of the case took place in the 1910s. Meritt was a constructor who was excellent at his work. One day, while he was riding his motorcycle along Calle Padre Faura, he was bumped by a government ambulance. The driver of the ambulance was proven to have been negligent. Because of the incident, Meritt was hospitalized and he was severely injured beyond rehabilitation so much so that he could never perform his job the way he used to and that he cannot even earn at least half of what he used to earn.

Meritt v. Government, 34 Phil. 311 (1916)

In order for Meritt to recover damages, he sought to sue the government which later authorized Meritt to sue the government by virtue of Act 2457 enacted by the legislature (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). The lower court then determined the amount of damages and ordered the government to pay the same.

Meritt v. Government, 34 Phil. 311 (1916)

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

HELD: No. 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.

Meritt v. Government, 34 Phil. 311 (1916)

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.

Meritt v. Government, 34 Phil. 311 (1916)

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.

c. Incorporated Government Agencies

PNB v. CIR, 81 SCRA 314 (1978)
Facts: Petitioners motion to quash a notice of garnishment was denied for lack of merit. What was sought to be garnished was the money of the People's Homesite and Housing Corporation deposited at petitioner's branch in Quezon City, to satisfy a decision of respondent Court which had become final and executory. A writ of execution in favor of private respondent Gabriel V. Manansala had previously been issued. He was the counsel of the prevailing party, the United Homesite Employees and Laborers Association.

 The validity of the order assailed is challenged on two grounds: (1) that the appointment of respondent Gilbert P. Lorenzo as authorized deputy sheriff to serve the writ of execution was contrary to law and (2) that the funds subject of the garnishment "may be public in character." The order of August 26, 1970 of respondent Court denying the motion to quash, subject of this certiorari proceeding, reads as follows: "The Philippine National Bank moves to quash the notice of garnishment served upon its branch in Quezon City by the authorize deputy sheriff of this Court. It contends that the service of the notice by the authorized deputy sheriff of the court contravenes Section 11 of Commonwealth Act No. 105, as amended which reads:

" All writs and processes issued by the Court shall be served and executed free of charge by provincial or city sheriffs, or by any person authorized by this Court, in the same manner as writs and processes of Courts of First Instance.' Following the law, the Bank argues that it is the Sheriff of Quezon City, and not the Clerk of this Court who is its Ex-Officio Sheriff, that has the authority to serve the notice of garnishment, and that the actual service by the latter officer of said notice is therefore not in order. The Court finds no merit in this argument. Republic Act No. 4201 has, since June 19, 1965,already repealed Commonwealth Act No. 103, and under this law, it is now the Clerk of this Court that is at the same time the Ex-Officio Sheriff.

 As such Ex-Officio Sheriff, the Clerk of this Court has therefore the authority to issue writs of execution and notices of garnishment in an area encompassing the whole of the country, including Quezon City, since his area of authority is coterminous with that of the Court itself, which is national in nature. ... At this stage, the Court notes from the record that the appeal to the Supreme Court by individual employees of PHHC which questions the award of attorney's fees to Atty. Gabriel V. Manansala, has already been dismissed and that the same became final and executory on August 9, 1970. There is no longer any reason, therefore, for withholding action in this case.

[Wherefore], the motion to quash filed by the Philippine National Bank is denied for lack of merit. The said Bank is therefore ordered to comply within five days from receipt with the 'notice of Garnishment' dated May 6, 1970."5 There was a motion for reconsideration filed by petitioner, but in a resolution dated September 22, 1970, it was denied. Hence, this certiorari petition. [Wherefore], the motion to quash filed by the Philippine National Bank is denied for lack of merit. The said Bank is therefore ordered to comply within five days from receipt with the 'notice of Garnishment' dated May 6, 1970."5 There was a motion for reconsideration filed by petitioner, but in a resolution dated September 22, 1970, it was denied. Hence, this certiorari petition.

Issue: WON the funds mentioned may be garnished Ruling: No Rationale: 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

c. Incorporated Government Agencies

Farolan v. CTA, 217 SCRA 298
The Bureau of Customs cannot be held liable for actual damages that the private respondent sustained with regard to its goods. To permit private respondents claim to prosper would violate the doctrine of sovereign immunity. Since it demands that the Commissioner of Customs be ordered to pay for actual damages it sustained, for which ultimately liability will fall on the government, it is obvious that this case has been converted technically into a suit against the State. The Bureau of Customs, along with the Bureau of Internal Revenue, it is invested with an inherent power of sovereignty, namely, taxation. (Farolan vs. CTA, 217 SCRA 298)

 As an unincorporated government agency without any separate juridical personality of its own, the Bureau of Customs enjoys immunity from suit. On this point, the political doctrine that the state may not be sued without its consent, categorically applies. As an unincorporated government agency without any separate juridical personality of its own, the Bureau of Customs enjoys immunity from suit. Along with the Bureau of Internal Revenue, it is invested with an inherent power of sovereignty, namely, taxation. As an agency, the Bureau of Customs performs the governmental function of collecting revenues which is definitely not a proprietary function. Thus, private respondents claim for damages against the Commissioner of Customs must fail.

Implied Consent
a.) Government submits itself to the courts jurisdiction b.) The State itself files a complaint c.) Government entering into business contracts d.) When inequitable for government to claim immunity

 BENITO LIM VS HERBERT BROWNELL, 107 Phil. 344 (1960) FACTS: The property in dispute consists of four parcels of land situated in Tondo, Manila. The lands were, after the last world war, found by the Alien Property Custodian of the United States to be registered in the name of Asaichi Kagawa, national of an enemy country, Japan. Alien Property Custodian, issued a vesting order on the authority of the Trading with the Enemy Act of the United States, as amended, vesting in himself the ownership over two of the said lots, Lots Nos. 1and 2. On July 6, 1948, the Philippine Alien Property Administrator, (successor of the Alien Property Custodian) under the authority of the same statute, issued a supplemental vesting order,

vesting in himself title to the remaining Lots Nos. 3 and 4.The Philippine Alien Property Administrator (acting on behalf of the President of the US) and the President of the Philippines executed two formal agreements, one referring to Lots 1 and 2 and the other to Lots 3 and 4, whereby the said Administrator transferred all the said four lots to the Republic of the Philippines. The transfer agreements were executed. On the theory that the lots in question still belonged to Arsenia Enriquez, the latters son. Benito Lim filed a formal notice of claim to the property with the Philippine Alien Property Administrator.

The notice was subsequently amended to permit Lim to prosecute the claim as administrator of the intestate estate of the deceased Arsenia Enriquez, thus, in effect, substituting the intestate estate as the claimant, it being alleged that the lots were once the property of Arsenia Enriquez. The claim was disallowed byte Vested Property Claims Committee of the Philippine Alien Property Administrator. The claimant Benito Lim filed a complaint in the Court of First Instance of Manila against Philippine Alien Property Administrator (later substituted by the Atty General of the United States) for the recovery of the property in question with back rents.

The complaint was later amended to include Asaichi Kagawa as defendant. As amended, it alleged that the lands in question formerly belonged to Arsenia Enriquez. He stated some reasons in his allegations to prove that Arsenia is the owner of the property. Plaintiff, therefore, prayed that the sheriffs sale to Kagawa and the vesting of the properties in the Philippine Alien Property Administrator and the transfer thereof by the United States to the Republic of the Philippines be declared null and void; that Arsenia Enriquez be adjudged owner of the said properties and the Register of the Deeds of Manila be ordered to issue the corresponding transfer certificates of title to her. The Court ordered the complaint dismissed on the ground

as stated in the dispositive part of the order that the court has no jurisdiction over the subject matter of this action. ISSUE: Whether or not Lim has the right to sue or claim for damages against the Republic and Attorney General of the United States?

HELD: The immunity of the state from suit, however cannot be invoked where the action, as in the present case, is instituted by a person who is neither an enemy or ally of an enemy for the purpose of establishing his right, title or interest invested property, and of recovering his ownership and possession.

Congressional consent to such suit has expressly been given by the United States. The order of dismissal, however, with respect to plaintiffs claim for damages against the defendant Attorney General of the US may be upheld. The relief available to a person claiming enemy property which has been vested by the Philippines Alien Property Custodian is limited to those expressly provided for in the Trading with the Enemy Act, which does not include a suit for damages for the use of such vested property. That action, as held by this Court in the Castelo case just cited, is not one of those authorized under the act which maybe instituted in the appropriate courts of the Philippines under the provisions of section 3 of the Philippine Property Act of 1946.

Congressional consent to such suit has not been granted. The claim for damages for the use of the property against the intervenor defendant Republic of the Philippines, to which it was transferred, likewise, cannot be maintained because of the immunity of the state from suit. The claim obviously constitutes a charge against, or financial liability to, the Government and consequently cannot be entertained by the courts except with he consent of said government.

The claim for damages for the use of property against the intervenor dependant Republic of the Philippines to which it was transferred cannot be maintained because of the immunity of the State from suit. The claim obviously constitutes a charge against, or financial liability to, the Government and consequently cannot be entertained by the courts except with the consent of the government

When the government enters into a commercial transaction, it abandons its sovereign capacity and it is to be treated like another corporation (Malong Vs. PNR, 138 SCRA 63) National Irrigation Authority is a government agency vested with corporate personality separate and distinct from the government (Sec .1, RA 3601), thus is governed by the Corporation Law. Under Sec. 2, PD 552 NIA is allowed to collect fees and other charges as maybe necessary to cover the cost of operation, maintenance, and insurance and to recover the cost of construction, etc. NIA may also sue and be sued in court. It is authorized to exercise the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provision of NIA charter (Fontanilla Vs.Maliaman, 194 SCRA 486)

The State itself files a complaint

REPUBLIC V. SANDIGANBAYAN, G.R. No. 85384, February 28, 1990 FACTS: Republic (petitioner), through the Presidential Commission on Good Government (PCGG), represented by the Office of the Solicitor General(OSG), filed a petition for forfeiture before the Sandiganbayan pursuant to RA 1379 declaration of the aggregate amount of US$ 356M deposited in escrow in the PNB, as ill-gotten wealth. The funds were previously held by 5 account groups, using various foreign foundations in certain Swiss banks. In addition, the Republic sought the forfeiture of US$25 million and US$5 million in treasury notes which exceeded the Marcos couple's salaries other lawful income as well as income from legitimately acquired property.

The treasury notes are frozen at the Central Bank of the Philippines, now Bangko Sentral ng Pilipinas, by virtue of the freeze order issued by the PCGG. Before the case was set for pre-trial, a General Agreement and the Supplemental Agreement dated December 28,1993 were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos family. The General Agreement/Supplemental Agreements sought to identify, collate, cause the inventory of and distribute all assets presumed to be owned by the Marcos family under the conditions contained therein.

The General Agreement specified in one of its premises or "whereas clauses" the fact that petitioner "obtained a judgment from the Swiss Federal Tribunal on December 21, 1990, that the Three Hundred Fifty-six Million U.S. dollars(US$356 million) belongs in principle to the Republic of the Philippines provided certain conditionalities are met. Hearings were conducted by the Sandiganbayan on the motion to approve the General/Supplemental Agreements. In a resolution dated 31 January2002, the Sandiganbayan denied the Republic's motion for summary judgment.

." The evidence offered for summary judgment of the case did not prove that the money in the Swiss Banks belonged to the Marcos spouses because no legal proof exists in the record as to the ownership by the Marcoses of the funds in escrow from the Swiss Banks. The basis for the forfeiture in favor of the government cannot be deemed to have been established and our judgment thereon, perforce, must also have been without basis."

 ISSUE: Whether or not petitioner Republic was able to prove its case for forfeiture in accordance with the requisites of Sections 26 and 37 of RA 1379? HELD:RA 1379 raises the prima facie presumption that a property is unlawfully acquired, hence subject to forfeiture, if its amount or value is manifestly disproportionate to the official salary and other lawful income of the public officer who owns it. The following facts must be established in order that forfeiture or seizure of the Swiss deposits may be effected:

(1) ownership by the public officer of money or property acquired during his incumbency, whether it be in his name or otherwise, and (2) the extent to which the amount of that money or property exceeds, i. e., is grossly disproportionate to, the legitimate income of the public officer, (3) that the said amount is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property.

The Republic was able to establish a prima facie case for the forfeiture of the Swiss funds pursuant to RA 1379.

Ferdinand and Imelda Marcos were public officers. Ferdinand and Imelda Marcos had acquired and owned properties during their term of office, as evidenced by their admittance regarding the ownership of the Swiss accounts. The Swiss accounts of the Marcoses had balances amounting to US$356 million, a figure beyond the aggregate legitimate income of $304, 372.34 The Petition was GRANTED. The Swiss deposits which were transferred to and are now deposited in escrow at the Philippine National Bank in the estimated aggregate amount of US$658,175,373.60 as of January 31, 2002, plus interest, are hereby forfeited in favor of petitioner.

When the State files an action, it divests itself of the sovereign character and shed its immunity from suit, descending to the level of an ordinary litigant

d. When inequitable for government to claim immunity

Santiago v. Republic, 87 SCRA 294
FACTS: Santiagos plea was for the revocation of a deed of donation executed by him and his spouse with the Bureau of Plant Industry as the donee. As alleged in such complaint, such Bureau, contrary to the terms of the donation, failed to "install lighting facilities and water system on the property donated and to build an office building and parking [lot] there on which should have been constructed and ready for occupancy. That led him to conclude that under the circumstances, he was exempt from compliance with such an explicit constitutional command. ISSUE: WON the Bureau is immune from suit.

 HELD: YES. If an order of dismissal would suffice, then the element of unfairness enters, the facts alleged being hypothetically admitted. It is the considered opinion of this Court then that to conform to the high dictates of equity and justice, the presumption of consent could be indulged in safely. That would serve to accord to petitioner as plaintiff, at the very least, the right to be heard. The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen.

 Under the circumstances, the fundamental postulate of non-suability cannot stand in the way. It is made to accommodate itself to the demands of procedural due process, which is the negation of arbitrariness and inequity. The government, in the final analysis, is the beneficiary. It thereby manifests its adherence to the highest ethical standards, which can only be ignored at the risk of losing the confidence of the people, the repository of the sovereign power.

Suits against Municipal Corporations

Torio v. Fontanilla, 85 SCRA 99 (1978)
FACTS: The Municipal Council of Malasiqui, Pangasinan, passed a resolution whereby "it resolved to manage the 1959 Malasiqui town fiesta celebration. Another resolution was also passed creating the "1959 Malasiqui 'Town Fiesta Executive Committee" which in turn organized a sub-committee on entertainment and stage. The council appropriated an amount for the construction of 2 stages, one for the "zarzuela" and another for the cancionan. Jose Macaraeg supervised the construction of the stage. The "zarzuela" then began but before the dramatic part of the play was reached, the stage collapsed and Vicente Fontanilla who was at the rear of the stage was pinned underneath. Fontanilia was taken to the hospital where he died in the afternoon of the following day. The heirs of Vicente Fontanilia filed a complaint against Municipality.

Answering the complaint defendant municipality invoked inter alia the principal defense that as a legally and duly organized public corporation it performs sovereign functions and the holding of a town fiesta was an exercise of its governmental functions from which no liability can arise to answer for the negligence of any of its agents. ISSUE: WON the defendant Municipality was performing sovereign functions therefore immune from suit.

 HELD: NO. Answering the complaint defendant municipality invoked inter alia the principal defense that as a legally and duly organized public corporation it performs sovereign functions and the holding of a town fiesta was an exercise of its governmental functions from which no liability can arise to answer for the negligence of any of its agents.

 Holding a fiesta even if the purpose is to commemorate a religious or historical event of the town is in essence an act for the special benefit of the community and not for the general welfare of the public performed in pursuance of a policy of the state. The mere fact that the celebration, as claimed was not to secure profit or gain but merely to provide entertainment to the town inhabitants is not a conclusive test. For instance, the maintenance of parks is not a source of income for the nonetheless it is private undertaking as distinguished from the maintenance of public schools, jails, and the like which are for public service.

There can be no hard and fast rule for purposes of determining the true nature of an undertaking or function of a municipality; the surrounding circumstances of a particular case are to be considered and will be decisive. The basic element, however beneficial to the public the undertaking may be, is that it is governmental in essence, otherwise. The function becomes private or proprietary in character. Easily, no governmental or public policy of the state is involved in the celebration of a town fiesta.

Suits Against Foreign States

Rep. of Indonesia v. Vinzon, G.R. 154705, June 26, 2003
FACTS: Petitioner, Republic of Indonesia, represented by its Counselor entered into a Maintenance Agreement with respondent James Vinzon, owner of Vinzon Trade and Services. The Maintenance Agreement stated that respondent shall, for a consideration, maintain specified equipment at the Embassy Main Building, Embassy Annex Building and the Wisma Duta, the official residence of petitioner Ambassador Soeratmin. The equipment covered by the Maintenance Agreement are air conditioning units, generator sets, electrical facilities, water heaters, and water motor pumps. It is likewise stated therein that the agreement shall be effective for a period of four years and will renew itself automatically unless cancelled by either party by giving thirty days prior written notice from the date of expiry.

 Petitioners claim that sometime prior to the date of expiration of the said agreement, or before August 1999, they informed respondent that the renewal of the agreement shall be at the discretion of the incoming Chief of Administration. When the Chief of Administration assumed his position, he allegedly found respondents work and services unsatisfactory and not in compliance with the standards in the Agreement. Hence, the Indonesian Embassy terminated the agreement. Petitioners claim, that they had earlier verbally informed respondent of their decision to terminate the agreement.

On the other hand, respondent claims that the aforesaid termination was arbitrary and unlawful. Hence, he filed a complaint against the petitioners which opposed by invoking immunity from suit. ISSUE: WON the Republic of Indonesia can successfully invoke state immunity from suit.

HELD: YES. 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 upkeep. 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 petitioner Republic of Indonesia was acting in pursuit of a sovereign activity when it entered into a contract with respondent for the upkeep or maintenance. The Solicitor General, in his Comment, submits the view that, the Maintenance Agreement was entered into by the Republic of Indonesia in the discharge of its governmental functions. In such a case, it cannot be deemed to have waived its immunity from suit.

 The Holy See v. Hon. Rosario, Jr.

FACTS:This petition arose from a controversy over a parcel of land consisting of 6,000 square meters located in the Municipality of Paranaque. Said lot was contiguous with two other lots. These lots were sold to Ramon Licup. In view of the refusal of the squatters to vacate the lots sold, a dispute arose as to who of the parties has the responsibility of evicting and clearing the land of squatters. Complicating the relations of the parties was the sale by petitioner of the lot of concern to Tropicana.
ISSUE: Whether the Holy See is immune from suit insofar as its business relations regarding selling a lot to a private entity.

 RULING: As expressed in Section 2 of Article II of the 1987Constitution, we have adopted the generally accepted principles of International Law. Even without this affirmation, such principles of International Law are deemed incorporated as part of the law of the land as a condition and consequence of our admission in the society of nations. In the present case, if petitioner has bought and sold lands in the ordinary course of real estate business, surely the said transaction can be categorized as an act jure gestionis.

However, petitioner has denied that the acquisition and subsequent disposal of the lot were made for profit but claimed that it acquired said property for the site of its mission or the Apostolic Nunciature in the Philippines. The Holy See is immune from suit for the act of selling the lot of concern is non-proprietary in nature. The lot was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was made not for commercial purpose, but for the use of petitioner to construct thereon the official place of residence of the Papal Nuncio. The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a governmental character. Petitioner did not sell the lot for profit or gain. It merely wanted to dispose of the same because the squatters living thereon made it almost impossible for petitioner to use it for the purpose of the donation.

Suits against International Agencies

DFA v. NLRC, G.R. No, 113191, September 18, 1997 Facts: A complaint for illegal dismissal was filed against the Asian Development Bank ("ADB"). Upon receipt of summonses, both the ADB and the DFA notified the Labor Arbiter that the ADB, as well as its President and Officers, were covered by an immunity from legal process except for borrowings, guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of the Agreement Establishing the Asian Development Bank (the "Charter") in relation to Section 5 and Section 44 of the Agreement Between The Bank And The Government Of The Philippines Regarding The Bank's Headquarters (the "Headquarters Agreement").

The Labor Arbiter took cognizance of the complaint on the impression that the ADB had waived its diplomatic immunity from suit, and issued a judgment in favor of the complainant. The ADB did not file an appeal, but the DFA sought a nullification with the NLRC. The latter denied the request. Issue: Whether or not ADB is immune from suit?

 Ruling: No. Under the Charter and Headquarters Agreement, the ADB enjoys immunity from legal process of every form, except in the specified cases of borrowing and guarantee operations, as well as the purchase, sale and underwriting of securities. The Banks officers, on their part, enjoy immunity in respect of all acts performed by them in their official capacity. The Charter and the Headquarters Agreement granting these immunities and privileges are treaty covenants and commitments voluntarily assumed by the Philippine government which must be respected.

 Being an international organization that has been extended a diplomatic status, the ADB is independent of the municipal law. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in their operations or even influence or control its policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its memberstates."

The ADB didn't descend to the level of an ordinary party to a commercial transaction, which should have constituted a waiver of its immunity from suit, by entering into service contracts with different private companies. There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the Courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private act or acts jure gestionis.

Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit. The service contracts referred to by private respondent have not been intended by the ADB for profit or gain but are official acts over which a waiver of immunity would not attach.

Issue: Whether or not the DFA has the legal standing to file the present petition?

Ruling: The DFA's function includes, among its other mandates, the determination of persons and institutions covered by diplomatic immunities, a determination which, when challenged, entitles it to seek relief from the court so as not to seriously impair the conduct of the country's foreign relations. The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine government before the international community. When international agreements are concluded, the parties thereto are deemed to have likewise accepted the responsibility of seeing to it that their agreements are duly regarded. In our country, this task falls principally on the DFA as being the highest executive department with the competence and authority to so act in this aspect of the international arena.

Suits against Public Officers

Shauf v. CA, 191 SCRA 713 (1990)
FACTS: 1990: Petitioner, Loida Shauf, a Filipino by origin and married to an American who is a member of the US Air Force, was rejected for a position of Guidance Counselor in the Base Education Office at Clark Air Base. She boasts of related working experience and being a qualified dependent locally available. By reason of her non-selection, she filed a complaint for damages and an equal employment opportunity complaint against private respondents, Don Detwiler (civillian personnel officer) and Anthony Persi (Education Director), for alleged discrimination by reason of her sex (female), color (brown) and national origin (Filipino by birth).

Shauf was offered a temporary position as a temporary Assistant Education Adviser for a 180-day period with the condition that if a vacancy occurs, she will be automatically selected to fill the vacancy. But if no vacancy occurs after 180 days, she will be released but will be selected to fill a future vacancy if shes available. Shauf accepted the offer. During that time, Mrs. Mary Abalateos was about to vacate her position. But Mrs. Abalateos appointment was extended thus, Shauf was never appointed to said position. She claims that the Abalateos stay was extended indefinitely to deny her the appointment as retaliation for the complaint that she filed against Persi. Persi denies this allegation. He claims it was a joint decision of the management & it was in accordance of with the applicable regulation.

Shauf filed for damages and other relief in different venues such as the Civil Service Commission, Appeals Review Board, Philippine Regional Trial Court, etc. RTC ruled in favor of Shauf ordering defendants to pay $39,662.49 as actual damages + 20% of such amount as attorneys fees + P100k as moral & exemplary damages. Both parties appealed to the CA. Shauf prayed for the increase of the damages to be collected from defendants. Defendants on the other hand, continued using the defense that they are immune from suit for acts done/statements made by them in performance of their official governmental functions pursuant to RP-US Military Bases Agreement of 1947. They claim that the Philippines does not have jurisdiction over the case because it was under the exclusive jurisdiction of a US District Court. They likewise claim that petitioner failed to exhaust all administrative remedies thus case should be dismissed. CA reversed RTC decision. According to the CA, defendants are immune from suit.

Shauf claims that the respondents are being sued in their private capacity thus this is not a suit against the US government w/c would require consent. Respondents still maintain their immunity from suit. They further claim that the rule allowing suits against public officers & employees for criminal & unauthorized acts is applicable only in the Philippines & is not part of international law. ISSUE: WON private respondents are immune from suit being officers of the US Armed Forces

 HELD: Respondents ordered, jointly and severally, to pay petitioners the sum of P100K as moral damages, P20K for attys fees. RATIONALE: No, the respondents cannot rely on the US blanket of diplomatic immunity for all its acts or the acts of its agents in the Phils. Private respondents are personally liable in indemnifying petitioner Shauf.

While the doctrine of immunity is also applicable to complaints filed against state officials, it only contemplates acts done in their official capacity. This does not cover acts contrary to law & injurious to the rights of the plaintiff. When an official acts in a manner that invades or violates the personal & property rights of another, the aggrieved party may sue the official & such suit will not be a suit against the state. (Director of the Bureau of Telecommunications vs. Aligaen) The doctrine of immunity from suit will not apply where the public official is being sued in his private & personal capacity as an ordinary citizen.

The discrimination is very evident. Shauf was not considered for the position even if she was previously employed as a Guidance Counselor at the Clark Airbase. She was not granted an interview. The person appointed was not even qualified for that position and that person kept the position despite orders from the US Civil Service Commission for his removal. Extension of Abalateos services is another proof. She was not appointed even if US officials found her highly qualified for the position (letters from the Director of the US Civil Service Commission, Staff Judge Advocate of the Department of Air Force). Shauf has proven that discrimination did occur whereas respondents merely denied allegations.

The US Constitution assures everyone of equality in employment & work opportunities regardless of sex, race, or creed. The Philippine Constitution has a similar provision. Persi & Detwiler violated Shaufs constitutional right to earn a living, an integral aspect of her right to life. Thus, they should be accountable. Though Shauf is entitled to damages, she should not be paid for the supposedly unearned income had she been hired as a Guidance Counselor. She never acquired rights over that amount because she was never appointed.

Shauf followed the proper procedure in seeking relief for the defendants discriminatory acts. The Department of Air Force in Washington told her that one of her appeal rights would be to file a civil action if a final decision has not been rendered after 180 days from the dated of the initial appeal to the Commission. The appeal was lodged on Sept. 30, 1978 and it has not been decided up to the time SC has decided. Shauf is entitled to choose the remedy, not otherwise prohibited, which will best advance & protect her interests.

 REPUBLIC OF THE PHILIPPINES vs SANDOVAL, G.R. No. 48607, March 19, 1993 Petition for Certiorari to review the orders of the RTC of Manila, Branch 9Facts: This case deals with the tragedy that transpired on January 22, 1987. Popularly known as the Black Thursday or the Mendiola Massacre. Twelve people died and the heirs of these people are seeking for retribution. (the gist is that the people marched to Mendiola because of failed agrarian reforms and the police and military were there to defend the palace. There were shooting and no one knows who started it. End result = some people were killed. )

Heirs of the deceased and the injured filed this case for damages. President Aquino issued AO no. 11 which created the Citizens Mendiola Commission and in their report they recommended that criminal prosecution of four unidentified, uniformed individuals. The most significant recommendation that they made was that the deceased and wounded victims of the Mendiola incident be compensated by the government. This recommendation of the commission was the basis of the claim for damages by the petitioners.

February 23, 1988 the Solicitor General filed a motion to dismiss on the ground that the State cannot be sued without its consent. The petitioner maintained 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. Issue: WON the State has waived its immunity from suit Held: No. Immunity from suit is expressly provided in Article XVI, sec. 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 reason of public policy that public policy 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 disposition of the means required for the proper administration of the government.

Recommendation made by the commission does not in any way mean that liability automatically attaches to the State. The purpose of the commission as provided for in AO 11 was to have a body that will conduct an investigation of the disorder, deaths and casualties that took place. The findings of the commission shall only serve as the cause of action in the event that any party decides to litigate his/her claim. Consent to be sued may be given impliedly it cannot be maintained that such consent was given in this case. The commission was a fact finding body. The commission was merely a preliminary venue and it wan not an end in itself.

The case does not qualify as a suit against the state. Some instances when a suit against the State is proper are
When the Republic is sued by name When the suit is against an unincorporated government agency 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.

The ultimate liability in this case does not pertain to the government. Based on the investigation the military officials acted beyond their authority and there was lack of jurisdiction by the government forces in the use of firearms. The committed a prohibited act under BP 880 as there was unnecessary firing by them in dispersing the marchers. The court ruled before that an officer cannot shelter himself by plea that he is a public agent acting under the color of his office when his acts are wholly without authority.

The appellate court held that she was entitled to her salaries from October, 1983 to December, 1986. For the second time, the City Government of Caloocan appealed to the Supreme Court (GR 98366, City Government of Caloocan vs. Court of Appeals, et al.) The petition was dismissed, through its Resolution of 16 May 1991, for having been filed late and for failure to show any reversible error on the part of the Court of Appeals. The resolution subsequently attained finality and the corresponding entry of judgment was made on 29 July 1991.

Consent to Execution
Municipality of Makati vs. Court of Appeals,
G.R. Nos. 89898-99 October 1, 1990
Facts: Petitioner Municipality of Makati expropriated a portion of land owned by private respondents, Admiral Finance Creditors Consortium, Inc. After proceedings, the RTC of Makati determined the cost of the said land which the petitioner must pay to the private respondents amounting to P5,291,666.00 minus the advanced payment of P338,160.00. It issued the corresponding writ of execution accompanied with a writ of garnishment of funds of the petitioner which was deposited in PNB.

However, such order was opposed by petitioner through a motion for reconsideration, contending that its funds at the PNB could neither be garnished nor levied upon execution, for to do so would result in the disbursement of public funds without the proper appropriation required under the law, citing the case of Republic of the Philippines v. Palacio.The RTC dismissed such motion, which was appealed to the Court of Appeals; the latter affirmed said dismissal and petitioner now filed this petition for review.

 Issue: Whether or not funds of the Municipality of Makati are exempt from garnishment and levy upon execution. Held: It is petitioner's main contention that the orders of respondent RTC judge involved the net amount of P4,965,506.45, wherein the funds garnished by respondent sheriff are in excess of P99,743.94, which are public fund and thereby are exempted from execution without the proper appropriation required under the law. There is merit in this contention. In this jurisdiction, wellsettled is the rule that public funds are not subject to levy and execution, unless otherwise provided for by statute. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution.

Absent a showing that the municipal council of Makati has passed an ordinance appropriating the said amount from its public funds deposited in their PNB account, no levy under execution may be validly effected. However, this court orders petitioner to pay for the said land which has been in their use already. This Court will not condone petitioner's blatant refusal to settle its legal obligation arising from expropriation of land they are already enjoying. The State's power of eminent domain should be exercised within the bounds of fair play and justice.