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COLLECTOR VS CAMPOS RUEDA

Government of the Philippine Islands because of an editorial

In January 1955, Maria Cerdeira died in Tangier, Morocco

it published in the issue of Manila Freedom. The

(an international zone [foreign country] in North Africa). At

defendants were convicted for said offense basing upon

thetime of her death, she was a Spanish citizen and was a

Section 8 of Act. No. 292 of the Commission. Defendants

resident of Tangier. She however left some personal

then appealed for reversal of judgment made by the lower

properties (shares of stocks and other intangibles) in the

courts.

Philippines. The designated administrator of her estate here

ISSUE (ADMINISTRATION)

is Antonio Campos Rueda.

Is the editorial published by the defendants directed towards

In the same year, the Collector of Internal Revenue (CIR)

the Government of the United States and the Insular

assessed the estate for deficiency tax amounting to about

Government of the Philippine Islands?

P161k. Campos Rueda refused to pay the assessed tax as

RULING/HELD

he claimed that the estate is exempt from the payment of

No, the editorial was not directed towards the government

said taxes pursuant to section 122 of the Tax Code which

itself but towards the aggregate of individuals who were

provides:

administering the government at that time.

That no tax shall be collected under this Title in respect of

We understand, in modern political science, . . . by the

intangible personal property (a) if the decedent at thetime

term government, that institution or aggregate of institutions

of his death was a resident of a foreign country which at

by which an independent society makes and carries out

the time of his death did not impose a transfer tax or death

those rules of action which are unnecessary to enable men

tax of any character in respect of intangible person property

to live in a social state, or which are imposed upon the

of the Philippines not residing in that foreign country, or (b) if

people forming that society by those who possess the power

the laws of the foreign country of which the decedent was a

or authority of prescribing them. Government is the

resident at the time of his death allow a similar exemption

aggregate of authorities which rule a society. By

from transfer taxes or death taxes of every character in

"administration, again, we understand in modern times, and

respect of intangible personal property owned by citizens of

especially in more or less free countries, the aggregate of

the Philippines not residing in that foreign country.

those persons in whose hands the reins of government are

Campos Rueda was able to prove that there is reciprocity

for the time being (the chief ministers or heads of

between Tangier and the Philippines.

departments)." (Bouvier, Law Dictionary, 891.) But the writer

However, the CIR still denied any tax exemption in favor of

adds that the terms "government" and "administration" are

the estate as it averred that Tangier is not a state as

not always used in their strictness, and that "government" is

contemplated by Section 22 of the Tax Code and that the

often used for "administration."

Philippines does not recognize Tangier as a foreign country.

In this case, the editorial published by defendants where

ISSUE: Whether or not Tangier is a state.

directed towards the personnel of the Commission whom

HELD: Yes. For purposes of the Tax Code, Tangier is a

they described as "notoriously corrupt and rascally, and men

foreign country.

of no personal character". This as being ruled out by the

A foreign country to be identified as a state must be

Supreme Court was an attack not to the government system

a politically organized sovereign community independent of

but to the aggregate of individuals by whom the government

outside control bound by penalties of nationhood, legally

is being administered.

supreme within its territory, acting through a government

NOTES

functioning under a regime of law. The stress is on its being

The final judgment of the convictions of the defendants was

a nation, its people occupying a definite territory, politically

reversed by the Supreme Court acquitting the defendants

organized, exercising by means of its government its

with costs against the officials.

sovereign will over the individuals within it and maintaining

Romualdez-Yap v. CSC

its separate international personality.

Facts:

Further, the Supreme Court noted that there is already an


existing jurisprudence (Collector vs De Lara) which provides

Petitioner Conchita Romualdez-Yap started

that even a tiny principality, that of Liechtenstein, hardly an

working with the Philippine National Bank on 20 September

international personality in the sense, did fall under the

1972 as special assistant with the rank of Second Assistant

exempt category provided for in Section 22 of the Tax Code.

Manager assigned to the office of the PNB President. After

Thus, recognition is not necessary. Hence, since it was

several promotions, she was appointed in 1983 Senior Vice

proven that Tangier provides such exemption to personal

President assigned to the Fund Transfer Department.

properties of Filipinos found therein so must the Philippines


honor the exemption as provided for by our tax law with

Starting 1 April 1986 up to 20 February 1987, petitioner filed

respect to the doctrine of reciprocity.

several applications for leave of absence (due to medical

THE UNITED STATES, complainant-appellee

reasons) which were duly approved. While she was on

Vs

leave, Executive Order No. 80 (Revised Charter of the PNB)

FRED L DORR, ET AL., defendants-appellants

was approved on 3 December 1986. Said executive order

May 19, 1903

authorized the restructure/reorganization and rehabilitation

G.R. No. 1051

of PNB. Pursuant to the reorganization plan, the Fund


Transfer Department was abolished and its functions

FACTS OF THE CASE


The defendants were charged of scurrilous libel against the
Government of the United States and the Insular

transferred to the International Department.

Consequently, petitioner was notified of her separation from

or controlled corporation performing ministrant functions

the service in a letter dated 30 January 1987. This letter was

must meet a common test, the test of good faith.

received by petitioners secretary at the PNB head office on


16 February 1987.

Due to the restructuring and this is empirically verifiable


PNB became once more a viable banking institution. The

Petitioners first recorded appeal to the Civil Service

restoration of the FTD four years after it was abolished and

Commission questioning her separation is a letter dated 4

its functions transferred to the International Department, can

August 1989. Then CSC Chairman Samilo N. Barlongay

be attributed to the banks growth after reorganizations,

upheld the validity of her separation from the service in a

thereby negating malice or bad faith in that reorganization.

letter/opinion dated 30 August 1989 (this was allegedly

The essence of good faith lies in an honest belief in the

received by petitioner only on 26 February 1990)

validity of ones right.It consists of an honest intention to

Issue:

abstain from taking an unconscionable and unscrupulous


whether bad faith existed in the reorganization of

the Philippine National Bank resulting in the separation from

advantage of another, its absence should be established by


convincing evidence.

the service of petitioner


Held:

The records also clearly indicate that starting April 1986 to


No. PNBs reorganization was by virtue of a valid

February 1987, petitioner went on leave of absence for

law, E.O. No. 80. At the time of reorganization, due to the

medical reasons. While she was not reporting to the office,

critical financial situation of the bank, departments, positions

the banks reorganization got underway. She continued,

and functions were abolished or merged. The abolition of the

however, receiving her salaries, allowances, emoluments,

Fund Transfer Department (FTD) was deemed necessary.

honoraria and fees up to March 1987. Employees who were

This, to the Courts mind, was a management prerogative

affected by the reorganization had the option to avail of the

exercised pursuant to a business judgment. At this point, a

banks Separation Benefits Plan/Early Retirement Plan

distinction can be made in ruling on the validity of a

(SBP/ERIP). Petitioner opted not to avail of such plan and

reorganization between a government bureau or office

instead submitted to the result of the banks ongoing

performing constituent functions (like the Customs) and a

reorganization and managements discretion. If petitioner

government-owned or controlled corporation performing

had the desire for continued employment with the bank, she

ministrant functions (like the PNB).

could have asserted it for managements consideration.


There is no proof on record that she affirmatively expressed

Constituent functions are those which constitute the very

willingness to be employed. Since she cannot rebut the CSC

bonds of society and are compulsory in nature; ministrant

finding that her earliest appeal was made on 4 August 1989,

functions are those undertaken by way of advancing the

there is no reason for the Supreme Court to hold that she did

general interests of society, and are merely optional.

not sleep on her rights. On the contrary, her present

Commercial or universal banking is, ideally, not a

argument that bad faith existed at the time of the abolition of

governmental but a private sector, endeavor. It is an optional

the FTD because it was restored four years later is a little too

function of government.

late. Who could have predicted in 1986 or 1987 that PNB


would be able to rise from its financial crisis and become a

The principles determining whether or not a government

viable commercial bank again? The decision to abolish the

shall exercise certain of these optional functions are: (1) that

FTD at the time it was abolished, to repeat, was a business

a government should do for the public welfare those

judgment made in good faith.

things which private capital would not naturally

SPOUSES FONTANILLA VS HON. MALIAMAN,

undertake and (2) that a government should do those


things which by its very, nature it is better equipped to

FACTS: National Irrigation Administration (NIA), a

administer for the public welfare than is any private

government agency, was held liable for damages resulting to

individual or group of individuals.

the death of the son of herein petitioner spouses caused by


the fault and/or negligence of the driver of the said agency.

There are functions which our government is required to

NIA maintains that it is not liable for the act of its driver

exercise to promote its objectives as expressed in our

because the former does not perform primarily proprietorship

Constitution and which are exercised by it as an attribute of

functions but governmental functions.

sovereignty, and those which it may exercise to promote

ISSUE: Whether or not NIA may be held liable for damages

merely the welfare, progress and prosperity of the people.

caused by its driver.

To this latter class belongs the organization of those

HELD: Yes. NIA is a government agency with a corporate

corporations owned or controlled by the government to

personality separate and distinct from the government,

promote certain aspects of the economic life of our people

because its community services are only incidental functions

such as the National Coconut Corporation. These are what

to the principal aim which is irrigation of lands, thus, making

we call government-owned or controlled corporations which

it an agency with proprietary functions governed by

may take on the form of a private enterprise or one

Corporation Law and is liable for actions of their employees.

organized with powers and formal characteristics of a private

Shipside v. CA

corporation under the Corporation Law.

G.R. No. 143377 February 20, 2001


Melo, J.

But a reorganization whether in a government bureau


performing constituent functions or in a government-owned

Facts:

party in interest in whose name an action must be


On October 29, 1958, Original Certificate of Title

prosecuted, he must appear to be the present real owner of

No. 0-381 was issued in favor of Rafael Galvez, over four

the right sought to enforced. A real party in interest is the

parcels of land - Lot 1 with 6,571 square meters; Lot 2, with

party who stands to be benefited or injured by the judgment

16,777 square meters; Lot 3 with 1,583 square meters; and

in the suit, or the party entitled to the avails of the suit. And

Lot 4, with 508 square meters. On April 11, 1960, Lots No. 1

by real interest is meant a present substantial interest, as

and 4 were conveyed by Rafael Galvez in favor of Filipina

distinguished from a mere expectancy, or a future,

Mamaril, Cleopatra Llana, Regina Bustos, and Erlinda

contingent, subordinate or consequential interest. Being the

Balatbat in a deed of sale which was inscribed as Entry No.

owner of the areas covered by Camp Wallace, it is the

9115 OCT No.0-381 on August 10, 1960. August 16, 1960,

Bases Conversion and Development Authority, not the

Mamaril, et al. sold Lots No. 1 and 4 to Lepanto

Government, which stands to be benefited if the land issued

Consolidated Mining Company.

in the name of petitioner is cancelled.


Philippine Virginia Tobacco Administration, petitioner,

On February 1, 1963, unknown to Lepanto Consolidated

vs. Court of Industrial Relations, et al., respondents.

Mining Company, the Court of First Instance of La Union,

G.R. No. L-32052 July 25, 1975

Second Judicial District, issued an order declaring OCT No.


0-381 of the Registry of Deeds for the Province of La Union

Facts:

issued in the name of Rafael Galvez, null and void, and


ordered the cancellation thereof.

Private respondents alleged their employment


relationship, the overtime services in excess of the regular
eight hours a day rendered by them, and the failure to pay

On October 28, 1963, Lepanto Consolidated Mining

them overtime compensation in accordance with

Company sold to herein petitioner Lots No. 1 and 4. In the

Commonwealth Act No. 444. Philippine Virginia Tobacco

meantime, Rafael Galvez filed his motion for reconsideration

Administration denied the allegations and raising the special

against the order issued by the trial court declaring OCT No.

defenses of lack of a cause of action and lack of jurisdiction.

0-381 null and void. The motion was denied. The Court of

The respondent Court issued an order sustaining the claims

Appeals ruled in favor of the Republic of the Philippines.

of private respondents for overtime services and directing


petitioner to pay the same, minus what it had already paid.

Thereafter, the Court of Appeals issued an Entry of

There was a motion for reconsideration but it was denied by

Judgment, certifying that its decision dated August 14, 1973

the respondent Court. Petitioner Philippine Virginia Tobacco

became final and executory on October 23, 1973. Twenty

Administration contends that it is beyond the jurisdiction of

four long years, thereafter, on January 14, 1999, the Office

respondent Court as it is exercising governmental functions

of the Solicitor General received a letter dated January 11,

and that it is exempt from the operation of Commonwealth

1999 from Mr. Victor G. Floresca, Vice-President, John Hay

Act No. 444.

Poro Point Development Corporation, stating that the


aforementioned orders and decision of the trial court in

Issue:

L.R.C. No. N-361 have not been executed by the Register of

and not proprietary functions.

Deeds, San Fernando, La Union despite receipt of the writ of

Held:

execution. On April 21, 1999, the Office of the Solicitor


General filed a complaint for revival of judgment and
cancellation of titles before the Regional Trial Court of the
First Judicial Region (Branch 26, San Fernando, La Union)

Whether or not petitioner discharges governmental

Yes, the Petitioner discharges governmental and


not proprietary functions.
The Supreme Court ruled that a reference to the
enactments creating Petitioner Corporation suffices to
demonstrate the merit of petitioners plea that it performs

Issue:

governmental and not proprietary functions. Under Republic


whether or not the Republic of the Philippines can

Act No. 2265, its purposes and objectives are: "(a) To

maintain the action for revival of judgment herein

promote the effective merchandising of Virginia tobacco in

Held:

the domestic and foreign markets so that those engaged in


No. While it is true that prescription does not run

the industry will be placed on a basis of economic security;

against the State, the same may not be invoked by the

(b) To establish and maintain balanced production and

government in this case since it is no longer interested in the

consumption of Virginia tobacco and its manufactured

subject matter. While Camp Wallace may have belonged to

products, and such marketing conditions as will insure and

the government at the time Rafael Galvezs title was ordered

stabilize the price of a level sufficient to cover the cost of

cancelled, the same no longer holds true today.

production plus reasonable profit both in the local as well as


in the foreign market; (c) To create, establish, maintain, and

With the transfer of Camp Wallace to the BCDA,

operate processing, warehousing and marketing facilities in

the government no longer has a right or interest to protect.

suitable centers and supervise the selling and buying of

Consequently, the Republic is not a real party in interest and

Virginia tobacco so that the farmers will enjoy reasonable

it may not institute the instant action. Nor may it raise the

prices that secure a fair return of their investments; (d) To

defense of imprescriptibility, the same being applicable only

prescribe rules and regulations governing the grading,

in cases where the government is a party in interest. Under

classifying, and inspecting of Virginia tobacco; and (e) To

Section 2 of Rule 3 of the 1997 Rules of Civil Procedure,

improve the living and economic conditions of the people

every action must be prosecuted or defended in the name

engaged in the tobacco industry."

of the real party in interest. To qualify a person to be a real

The amendatory statute, Republic Act No. 4155, renders

In June 1863 a devastating earthquake occurred in the

even more evident its nature as a governmental agency. Its

Philippines. The Spanish Government then provided

first section on the declaration of policy reads: "It is declared

$400,000.00 as aid for the victims and it was received by

to be the national policy, with respect to the local Virginia

the Philippine Treasury. Out of the said amount,

tobacco industry, to encourage the production of local

$80,000.00 was left untouched; it was then invested in

Virginia tobacco of the qualities needed and in quantities

the Monte de Piedad Bank which in turn invested the

marketable in both domestic and foreign markets, to

amount in jewelries. But when the Philippine

establish this industry on an efficient and economic basis,

government later tried to withdraw the said amount, the

and, to create a climate conducive to local cigarette

bank cannot provide for the amount. The government

manufacture of the qualities desired by the consuming

then filed a complaint. The bank argued that the

public, blending imported and native Virginia leaf tobacco to

Philippine government is not an affected party hence

improve the quality of locally manufactured cigarettes."

has no right to institute a complaint. The bank argues


that the government was not the intended beneficiary of

It is thus readily apparent from a cursory perusal

the said amount.

of such statutory provisions why petitioner can rightfully

ISSUE: Whether or not the Philippine government is

invoke the doctrine announced in the leading Agricultural

competent to file a complaint against the respondent

Credit and Cooperative Financing Administration

bank.

decision and why the objection of private respondents with

HELD: Yes. The Philippine government is competent to

its overtones of the distinction between constituent and

institute action against Monte de Piedad, this is in

ministrant functions of governments. Under this traditional

accordance with the doctrine of Parens Patriae. The

classification, such constituent functions are exercised by

government being the protector of the rights of the

the State as attributes of sovereignty, and not merely to

people has the inherent supreme power to enforce such

promote the welfare, progress and prosperity of the people -

laws that will promote the public interest. No other party

these latter functions being ministrant, the exercise of which

has been entrusted with such right hence as parents

is optional on the part of the government.

of the people the government has the right to take back

Assoc of Phil Coconut Desicator vs Phil Coconut

the money intended for the people.

Authority

Co Kim Chan v Valdez Tan Keh

Facts:

Facts of the case: Co Kim Chan had a pending civil case,

The Philippine Coconut Authority (PCA) was created by

initiated during the Japanese occupation, with the Court of

Presidential Decree No. 232 as an independent public

First Instance of Manila. After the Liberation of the Manila

corporation to promote the rapid integrated development

and the American occupation, Judge Arsenio Dizon refused

and growth of the coconut and other palm oil industry in all

to continue hearings on the case, saying that a proclamation

its aspects and to ensure that coconut farmers become

issued by General Douglas MacArthur had invalidated and

direct participants in, and beneficiaries of, such development

nullified all judicial proceedings and judgments of the courts

andgrowth through a regulatory scheme set up by law.

of the Philippines and, without an enabling law, lower courts

PCA is also in charge of the issuing of licenses to would-be

have no jurisdiction to take cognizance of and continue

coconut plant operators. In March 1993, however, PCA

judicial proceedings pending in the courts of the defunct

issued Board Resolution No. 018-93 which no longer require

Republic of the Philippines (the Philippine government under

those wishing to engage in coconut processing to apply for

the Japanese).

licenses as a condition for engaging in such business. The

The court resolved three issues:

purpose of which is to promote free enterprise unhampered

1. Whether or not judicial proceedings and decisions made

by protective regulations and unnecessary bureaucratic red

during the Japanese occupation were valid and remained

tapes. But this caused cut-throat competition among

valid even after the American occupation;

operators specifically in congested areas, underselling,

2. Whether or not the October 23, 1944 proclamation

smuggling, and the decline of coconut-based commodities.

MacArthur issued in which he declared that all laws,

The Association of Philippine Coconut Desiccators (APCD)

regulations and processes of any other government in the

then filed a petition for mandamus to compel PCA to revoke

Philippines than that of the said Commonwealth are null and

B.R. No. 018-93.

void and without legal effect in areas of the Philippines free

ISSUE: Whether or not the petition should be granted.

of enemy occupation and control invalidated all judgments

HELD: Yes. Our Constitutions, beginning with the 1935

and judicial acts and proceedings of the courts;

document, have repudiated laissez-faire as an economic

3. And whether or not if they were not invalidated by

principle. Although the present Constitution enshrines free

MacArthurs proclamation, those courts could continue

enterprise as a policy, it nonetheless reserves to the

hearing the cases pending before them.

government the power to intervene whenever necessary to

Ratio: Political and international law recognizes that all acts

promote the general welfare. As such, free enterprise does

and proceedings of a de facto government are good and

not call for the removal of protective regulations for the

valid. The Philippine Executive Commission and the

benefit of the general public. This is so because under Art.

Republic of the Philippines under the Japanese occupation

12, Secs. 6 and 9, it is very clear that the government

may be considered de facto governments, supported by the

reserves the power to intervene whenever necessary to

military force and deriving their authority from the laws of

promote the general welfare and when the public interest so

war.

requires.

Municipal laws and private laws, however, usually remain in

GOVT VS MONTE DE PIEDAD

force unless suspended or changed by the conqueror. Civil

obedience is expected even during war, for the existence of

3. Since the laws remain valid, the court must continue

a state of insurrection and war did not loosen the bonds of

hearing the case pending before it.

society, or do away with civil government or the regular

***3 kinds of de facto government: one established through

administration of the laws. And if they were not valid, then it

rebellion (govt gets possession and control through force or

would not have been necessary for MacArthur to come out

the voice of the majority and maintains itself against the will

with a proclamation abrogating them.

of the rightful government)

The second question, the court said, hinges on the

through occupation (established and maintained by military

interpretation of the phrase processes of any other

forces who invade and occupy a territory of the enemy in the

government and whether or not he intended it to annul all

course of war; denoted as a government of paramount force)

other judgments and judicial proceedings of courts during

through insurrection (established as an independent

the Japanese military occupation.

government by the inhabitants of a country who rise in

IF, according to international law, non-political judgments

insurrection against the parent state)

and judicial proceedings of de facto governments are valid

Laurel vs Misa

and remain valid even after the occupied territory has been

Facts: the Supreme Court, in a resolution, acted on the

liberated, then it could not have been MacArthurs intention

petition for the writ of

to refer to judicial processes, which would be in violation of

habeas corpus filed by petitioner anastacio laurel based on

international law.

the theory that a F

A well-known rule of statutory construction is: A statute

ilipino citizen who adhered to the enemy giving the latter aid

ought never to be construed to violate the law of nations if

and comfort durin

any other possible construction remains.

g the Japanese occupation cannot be prosecuted for the

Another is that where great inconvenience will result from a

crime of treason defined

particular construction, or great mischief done, such

and penalized by article 114 of the revised penal code for

construction is to be avoided, or the court ought to presume

the reason that 1) th

that such construction was not intended by the makers of the

at the sovereignty of the legitimate government in the

law, unless required by clear and unequivocal words.

Philippines and consequen

Annulling judgments of courts made during the Japanese

tly, the correlative allegiance of Filipino citizens therto was

occupation would clog the dockets and violate international

then suspended;

law, therefore what MacArthur said should not be construed

and 2) that there was a change of sovereignty over these

to mean that judicial proceedings are included in the phrase

islands upon the procla

processes of any other governments.

mation of the Philippine republic.

In the case of US vs Reiter, the court said that if such laws

Issues:

and institutions are continued in use by the occupant, they

Whether or not the allegiance of the accused as a Filipino

become his and derive their force from him. The laws and

citizen was suspended

courts of the Philippines did not become, by being continued

and that there was a change of sovereignty over the Phil

as required by the law of nations, laws and courts of Japan.

Islands.

It is a legal maxim that, excepting of a political nature, law

Held:

once established continues until changed by some

No, a citizen or subject owes, not a qualified and temporary,

competent legislative power. IT IS NOT CHANGED

but an absolute an

MERELY BY CHANGE OF SOVEREIGNTY. Until, of

d permanent allegiance, which consists in the obligation of

course, the new sovereign by legislative act creates a

fidelity and obedien

change.

ce to his government of sovereign. The absolute and

Therefore, even assuming that Japan legally acquired

permanent allegiance of the

sovereignty over the Philippines, and the laws and courts of

inhabitants of a territory occupied by the enemy to their

the Philippines had become courts of Japan, as the said

legitimate government

courts and laws creating and conferring jurisdiction upon

or sovereign is not abrogated or severed by the enemy

them have continued in force until now, it follows that the

occupation, because the so

same courts may continue exercising the same jurisdiction

vereignty of the government or sovereign de jure is not

over cases pending therein before the restoration of the

transferred thereby the

Commonwealth Government, until abolished or the laws

occupier.

creating and conferring jurisdiction upon them are repealed

Just as treason may be committed against the Federal as

by the said government.

well as against the Stat

DECISION: Writ of mandamus issued to the judge of the

e Govt, in the same way treason may have been committed

Court of First Instance of Manila, ordering him to take

during the Japanese occu

cognizance of and continue to final judgment the

pation against the sovereignty of the US as well as against

proceedings in civil case no. 3012.

the sovereignty of t

Summary of ratio:

he Phil Commonwealth; and that the change of our form of

1. International law says the acts of a de facto government

govt from commonwealth

are valid and civil laws continue even during occupation

to republic does not affect the prosecution of those charged

unless repealed.

with the crime of t

2. MacArthur annulled proceedings of other governments,

reason committed during the commonwealth, bec it is an

but this cannot be applied on judicial proceedings because

offense against the same

such a construction would violate the law of nations.

govt and the same sovereign people.

PEOPLE OF THE PHILIPPINE ISLANDS vs. GREGORIO

of command. Capt. Beloncio was thus allegedly slain by

PERFECTO (43 Phil 887) Case Digest

Ruffy and his fellow petitioners.

Facts:

ISSUE: Whether or not the petitioners were subject to


military law at the time the offense was committed, which

On September 7, 1920, Mr. Gregorio Perfecto published an

was at the time of war and the Japanese occupancy.

article in the newspaper La Nacionregarding the


disappearance of certain documents in the Office of

HELD: The Court held that the petitioners were still subject

Fernando M. Guerrero, the Secretary of the Philippine

to military law since members of the Armed Forces were still

Senate. The article of Mr. Perfecto suggested that the

covered by the National Defense Act, Articles of War and

difficulty in finding the perpetrators was due to an official

other laws even during an occupation. The act of

concealment by the Senate since the missing documents

unbecoming of an officer and a gentleman is considered as

constituted the records of testimony given by witnesses in

a defiance of 95th Article of War held petitioners liable to

the investigation of oil companies. This resulted to a case

military jurisdiction and trial. Moreover, they were operating

being filed against Mr. Perfecto for violation of Article 256 of

officers, which makes them even more eligible for the

the Penal Code. He was found guilty by the Municipal Trial

military court's jurisdiction.

Court and again in the Court of First Instance of Manila. Mr.


Perfecto filed an appeal in the Supreme Court to dismiss the

In consideration of the foregoing, the petition has no merit

case on the ground that Article 256 was not in force

and should be dismissed. Thus, the petition is

anymore.

hereby DENIED.
World Health Organization v. Aquino 48 SCRA 243

Issue:

Will a law be abrogated by the change of Spanish to

Facts:

American Sovereignty over the Philippines?


Herein petitioner, in behalf of Dr. Verstuyft, was allegedly
Ruling:

suspected by the Constabulary Offshore Action Center


(COSAC) officers of carrying dutiable goods under the

The Supreme Court held that Article 256 of the Spanish

Customs and Tariff Code of the Philippines. Respondent

Penal Code was enacted by the Government of Spain to

Judge then issued a search warrant at the instance of the

protect Spanish officials who were representative of the

COSAC officers for the search and seizure of the personla

King. With the change of sovereignty, a new government,

effects of Dr. Verstuyft notwithstanding his being entitled to

and a new theory of government, was set up in the

diplomatic immunity, as duly recognized by the Executive

Philippines. It was no sense a continuation of the old laws.

branch of the government.

No longer is there a Minister of the Crown or a person in


authority of such exalted position that the citizen must speak

The Secretary of Foreign Affairs Carlos P. Romulo advised

of him only in bated breath.

the respondent judge that Dr. Verstuyft is entitled to


immunity from search in respect for his personal baggage as

The crime of lese majeste disappeared in the Philippines

accorded to members of diplomatic missions pursuant to the

with the ratification of the Treaty of Paris. Ministers of the

Host Agreement and further requested for the suspension of

Crown have no place under the American flag.

the search warrant. The Solicitor General accordingly joined


the petitioner for the quashal of the search warrant but

Judgement is REVERED and the defendant and appellant

respondent judge nevertheless summarily denied the

ACQUITTED.

quashal.

Ruffy vs Chief of Staff


G.R. No. L-533
75 Phil 875

Issue:

August 20, 1956


Whether or not personal effect of WHO Officer Dr. Verstuyft
Petitioners: Ramon Ruffy, et al.

can be exempted from search and seizure under the

Respondents: The Chief of Staff, et al.

diplomatic immunity.

FACTS: During the Japanese insurrection in the


Philippines, military men were assigned at designated

Ruling:

camps or military bases all over the country. Japanese


forces went to Mindoro thus forcing petitioner and his

The executive branch of the Phils has expressly recognized

band move up the mountains and organize a guerilla

that Verstuyft is entitled to diplomatic immunity, pursuant to

outfit and call it the "Bolo area". A certain Capt.

the provisions of the Host Agreement. The DFA formally

Beloncio relieved Ruffy and fellow petitioners of their

advised respondent judge of the Philippine Government's

position and duties in the "Bolo area" by the new

official position. The Solicitor General, as principal law officer

authority vested upon him because of the recent change

of the gorvernment, likewise expressly affirmed said


petitioner's right to diplomatic immunity and asked for the

quashal of the search warrant.

state in whose territory its office is located. One of the basic


immunities of an international organization is immunity from

It recognized principle of international law and under our

local jurisdiction, i.e., that it is immune from the legal writs

system of separation of powers that diplomatic immunity is

and processes issued by the tribunals of the country where it

essentially a political question and courts should refuse to

is found. The obvious reason for this is that the subjection of

look beyond a determination by the executive branch of

such an organization to the authority of the local courts

government, and where the plea of diplomatic immunity is

would afford a convenient medium thru which the host

recognized by the executive branch of the government as in

government may interfere in their operations or even

the case at bar, it is then the duty of the courts to accept the

influence or control its policies and decisions of the

claim of immunity upon appropriate suggestion by the

organization; besides, such objection to local jurisdiction

principal law officer of the government, the Solicitor General

would impair the capacity of such body to discharge its

in this case, or other officer acting under his discretion.

responsibilities impartially on behalf of its member-states.

Courts may not so exercise their jurisdiction by seizure and

REPUBLIC VS. VILLASOR, ET AL.

detention of property, as to embarass the executive arm of

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

the government in conducting foreign relations.


Facts: On July 7, 1969, a decision was rendered in Special
The Court, therefore, holds the respondent judge acted

Proceedings No. 2156-R infavor of respondents P.J. Kiener

without jurisdiction and with grave abuse of discretion in not

Co., Ltd., Gavino Unchuan, and InternationalConstruction

ordering the quashal of the search warrant issued by him in

Corporation and against petitioner confirming the arbitration

disregard of the diplomatic immunity of petitioner Verstuyft.

award in theamount of P1,712,396.40.The award is for the

SOUTHEAST ASIAN FISHERIES DEVELOPMENT

satisfactionof a judgment against thePhlippine

CENTER-AQUACULTURE DEPARTMENT (SEAFDEC-

Government.On June 24, 1969, respondent Honorable

AQD), vs.

Guillermo Villasor issued an Orderdeclaring thedecision final

NATIONAL LABOR RELATIONS COMMISSION and

and executory.Villasor directed the Sheriffs of RizalProvince,

JUVENAL LAZAGA, respondents.

Quezon City as well as Manilato execute said decision.The

G.R. No. 86773 February 14, 1992

Provincial Sheriffof Rizal served Notices of Garnishment with


several Banks,specially on PhilippineVeterans Bank and

FACTS:

PNB.The funds of the Armed Forces of the Philippines on


deposit with PhilippineVeterans Bank andPNB are public
Two labor cases of illegal termination were filed by

funds duly appropriated and allocated for thepayment of

the herein private respondents against the petitioner,

pensions of retirees, pay andallowances of military and

Southeast Asian Fisheries Development Center

civilian personneland for maintenance and operations of the

(SEAFDEC), before the National Labor Relations

AFP.Petitioner, on certiorari, filed prohibition proceedings

Commission (NLRC), Regional Arbitration Branch, Iloilo City.

against respondent JudgeVillasor for acting in excess of

The petitioner, who claims to be an international inter-

jurisdiction with grave abuse of discretion amounting tolack

government organization composed of various Southeast

of jurisdiction in grantingthe issuance of a Writ of Execution

Asian countries, filed a Motion to Dismiss, challenged the

against the propertiesof the AFP, hence the notices and

jurisdiction of the public respondent in taking cognizance of

garnishment arenull and void.

the above cases. The private respondents, as well as


respondent labor arbiter, allege that the petitioner is not

Issue: Is the Writ of Execution issued by Judge Villasor

immune from suit and assuming that if, indeed, it is an

valid?

international organization, it has, however, impliedly, if not


expressly, waived its immunity by belatedly raising the issue

Held: What was done by respondent Judge is not in

of jurisdiction.

conformity with the dictates of theConstitution.It isa


fundamental postulate of constitutionalism flowing from the

ISSUE:

juristicconcept of sovereignty that the stateas well as its


Whether or not the petitioner is immune from suit.

government is immune from suitunless it gives its consent.A


sovereign is exempt from suit,not because of any

HELD:

formalconception or obsolete theory, but on the logical and


practical ground that therecan beno legal right as against the
The Court ruled for the petitioner. It is beyond

authority that makes the law on which the right depends.The

question that petitioner SEAFDEC is an international agency

State may not be sued without its consent. A corollary, both

enjoying diplomatic immunity. It has already been held in

dictated by logicand soundsense from a basic concept is that

Southeast Asian Fisheries Development Center-Aquaculture

public funds cannot be the object of agarnishment

Department vs. National Labor Relations Commission (G.R.

proceeding even if theconsent to be sued had been

No. 86773, 206 SCRA 283/1992). Petitioner Southeast

previously granted andthe state liability adjudged.The

Asian Fisheries Development Center-Aquaculture

universal rule that wherethe State gives its consent tobe

Department (SEAFDEC-AQD) is an international agency

sued by private parties either by general or special law, it

beyond the jurisdiction of public respondent NLRC.

may limitclaimants actiononly up to the completion of

Being an intergovernmental organization,

proceedings anterior to the stage of execution and

SEAFDEC including its Departments (AQD), enjoys

thatthepower of the Courts ends when the judgment is

functional independence and freedom from control of the

rendered, since the government fundsand properties maynot

be seized under writs of execution or garnishment to satisfy

that it was recognized by the US Government pursuant to

suchjudgments, is based on obviousconsiderations of public

the Vienna Convention on Diplomatic Relations and the

policy.Disbursements of publicfunds must be covered by the

Philippine government itself thru its Executive Department

correspondingappropriation as required by law.Thefunctions

and DFA.

and public services rendered by the State cannot be


allowedto be paralyzedor disrupted by the diversion of public

The courts ruled in favor of Scalzo on the ground

funds from their legitimate and specific

that as a special agent of the US Drug Enforcement

objects,asappropriated by law

Administration, he was entitled to diplomatic immunity.


Hence, the present recourse of Minucher.

Case: KHOSROW MINUCHER v. CA and ARTHUR


SCALZO (G.R. 142396)

Issue: WON Scalzo is entitled to diplomatic immunity

Date: February 11, 2003


Ponente: J. Vitug

Held: Yes.

Facts:

Ratio:
Minucher is an Iranian national who came to study

The Convention lists the classes of heads of

in UP in 1974 and was appointed Labor Attache for the

diplomatic missions to include (a) ambassadors or nuncios

Iranian Embasies in Tokyo and Manila; he continued to stay

accredited to the heads of state, (b) envoys, ministers

in the Philippines when the Shah of Iran was deposed by

or internuncios accredited to the heads of states; and (c)

Khomeini, he became a refugee of the UN and he headed

charges d' affairs accredited to the ministers of foreign

the Iranian National Resistance Movement in the Philippines.

affairs. Comprising the "staff of the (diplomatic) mission" are


the diplomatic staff, the administrative staff and the technical

On the other hand, Scalzo was a special agent of

and service staff. Only the heads of missions, as well as

the US Drugs Enforcement Agency. He conducts

members of the diplomatic staff, excluding the members of

surveillance operations on suspected drug dealers in the

the administrative, technical and service staff of the mission,

Philippines believed to be the source of prohibited drugs

are accorded diplomatic rank. Even while the Vienna

shipped to the US and make the actual arrest.

Convention on Diplomatic Relations provides for immunity to


the members of diplomatic missions, it does so,

Minucher and one Abbas Torabian was charged

nevertheless, with an understanding that the same be

for a violation of Act. 6425 (Dangerous Drugs Act of 1972)

restrictively applied. The main yardstick in ascertaining

before the Pasig RTC, such criminal charge was followed by

whether a person is a diplomat entitled to immunity is

a buy-bust operation conducted by the Philippine police

the determination of whether or not he performs duties

narcotic agents to which Scalzo was a witness for the

of diplomatic nature.

prosecution. They were acquitted.

Scalzo was an Assistant Attach of the US diplomatic


mission. An attach belongs to a category of officers in the

Later on, Minucher filed a complaint for damages

diplomatic establishment who may be in charge of its

against Scalzo. It was said that Minucher and Scalzo came

cultural, press, administrative or financial affairs. There could

to know of each other thru Jose Iigo; they conducted some

also be a class of attaches belonging to certain ministries or

business i.e. the former sold to the latter some caviar and

departments of the government, other than the foreign

Persian carpets. Scalzo then represented himself as a

ministry or department, who are detailed by their respective

special agent of the Drug Enforcement Administration, DOJ

ministries or departments with the embassies such as the

of US.

military, naval, air, commercial, agricultural, labor, science,


and customs attaches, or the like. Attaches assist a chief
Minucher expressed his desire to obtain a US Visa

of mission in his duties and are administratively under

for him and his Abbass wife. Scalzo told him that he could

him, but their main function is to observe, analyze and

help him for a $2,000 fee per visa. After a series of business

interpret trends and developments in their respective

transactions between the two, when Scalzo came to deliver

fields in the host country and submit reports to their

the visas to Minuchers house, he told the latter that he

own ministries or departments in the home government.

would be leaving the Philippines soon and requested him to

These officials are not generally regarded as members

come out of the house so he can introduce him to his cousin

of the diplomatic mission, nor are they normally

waiting in the cab. To his surprise, 30-40 armed Filipino

designated as having diplomatic rank.

soldiers came to arrest him.

Vesting a person with diplomatic immunity is a


prerogative of the executive branch of the government.

In his complaint for damages, he said that some of

The government of the United States itself, which Scalzo

his properties were missing like Persian carpets, a painting

claims to be acting for, has formulated its standards for

together with his TV and betamax sets. There was nothing

recognition of a diplomatic agent. The State Department

left in his house. He averred that his arrest as a heroine

policy is to only concede diplomatic status to a person who

trafficker was well publicized and that when we got arrested,

possesses an acknowledged diplomatic title and "performs

he was not given any food or water for 3 days.

duties of diplomatic nature." Supplementary criteria for


accreditation are the possession of a valid diplomatic

In his defense, Scalzo asserted his diplomatic


immunity as evidenced by a Diplomatic Note. He contended

passport or, from States which do not issue such passports,


a diplomatic note formally representing the intention to

assign the person to diplomatic duties, the holding of a non-

While evidence is wanting to show any similar agreement

immigrant visa, being over twenty-one years of age, and

between the governments of the Philippines and of the

performing diplomatic functions on an essentially full-time

United States (for the latter to send its agents and to conduct

basis. Diplomatic missions are requested to provide the most

surveillance and related activities of suspected drug dealers

accurate and descriptive job title to that which currently

in the Philippines), the consent or imprimatur of the

applies to the duties performed. The Office of the Protocol

Philippine government to the activities of the United

would then assign each individual to the appropriate

States Drug Enforcement Agency, however, can be

functional category.

gleaned from the facts heretofore elsewhere mentioned.

While the diplomatic immunity of Scalzo might thus

The official exchanges of communication between

remain contentious, it was sufficiently established that,

agencies of the government of the two countries,

indeed, he worked for the United States Drug

certifications from officials of both the Philippine

Enforcement Agency and was tasked to conduct

Department of Foreign Affairs and the United States

surveillance of suspected drug activities within the

Embassy, as well as the participation of members of the

country on the dates pertinent to this case. If it should

Philippine Narcotics Command in the "buy-bust

be ascertained that Arthur Scalzo was acting well within

operation" conducted at the residence of Minucher at

his assigned functions when he committed the acts

the behest of Scalzo, may be inadequate to support the

alleged in the complaint, the present controversy could

"diplomatic status" of the latter but they give enough

then be resolved under the related doctrine of State

indication that the Philippine government has given

Immunity from Suit.

its imprimatur, if not consent, to the activities within

The precept that a State cannot be sued in the courts of

Philippine territory of agent Scalzo of the United States

a foreign state is a long-standing rule of customary

Drug Enforcement Agency. The job description of Scalzo

international law then closely identified with the personal

has tasked him to conduct surveillance on suspected drug

immunity of a foreign sovereign from suit and, with the

suppliers and, after having ascertained the target, to inform

emergence of democratic states, made to attach not just to

local law enforcers who would then be expected to make the

the person of the head of state, or his representative, but

arrest. In conducting surveillance activities on Minucher,

also distinctly to the state itself in its sovereign capacity. If

later acting as the poseur-buyer during the buy-bust

the acts giving rise to a suit are those of a foreign

operation, and then becoming a principal witness in the

government done by its foreign agent, although not

criminal case against Minucher, Scalzo hardly can be said to

necessarily a diplomatic personage, but acting in his official

have acted beyond the scope of his official function or

capacity, the complaint could be barred by the immunity of

duties.

the foreign sovereign from suit without its consent. Suing a

Lasco vs UNRFNRE

representative of a state is believed to be, in effect, suing the

Case Digest_Eldepio Lasco et al v United Nations Revolving

state itself. The proscription is not accorded for the benefit of

Fund For Natural Resources Exploration (UNRFNRE)

an individual but for the State, in whose service he is, under

G.R. Nos. 109095-109107 February 23, 1995

the maxim - par in parem, non habet imperium - that all

Facts: Petitioners were dismissed from their employment

states are sovereign equals and cannot assert jurisdiction

with privaterespondent, the United Nations Revolving Fund

over one another.22 The implication, in broad terms, is that if

for NaturalResourcesExploration (UNRFNRE), which is a

the judgment against an official would require the state itself

special fund and subsidiary organ of theUnited Nations.The

to perform an affirmative act to satisfy the award, such as

UNRFNRE is involved in a joint project of

the appropriation of the amount needed to pay the damages

thePhilippineGovernment and the United Nations for

decreed against him, the suit must be regarded as being

exploration work in Dinagat Island.Petitioners are

against the state itself, although it has not been formally

thecomplainants for illegal dismissal and damages.Private

impleaded.

respondent alleged that respondent Labor Arbiter had no

(T)he doctrine of immunity from suit will not apply and may

jurisdiction over its personality since itenjoyed diplomatic

not be invoked where the public official is being sued in his

immunity.

private and personal capacity as an ordinary citizen. The


cloak of protection afforded the officers and agents of the

Issue:WON specialized agencies enjoy diplomatic immunity

government is removed the moment they are sued in their


individual capacity. This situation usually arises where the

Held:Petition is dismissed. This is not to say that petitioner

public official acts without authority or in excess of the

have no recourse.Section 31 of the Convention on the

powers vested in him. It is a well-settled principle of law that

Privileges and Immunitiesof the SpecializedAgencies of the

a public official may be liable in his personal private capacity

United Nations states that each specialized agency shall

for whatever damage he may have caused by his act done

makea provision for appropriate modes of settlement of (a)

with malice and in bad faith or beyond the scope of his

disputes arising out of contracts or other disputes of private

authority and jurisdiction."

character to which thespecialized agencyisa party. Private

Indeed, a foreign agent, operating within a territory, can be

respondent is not engaged in a commercial venture in

cloaked with immunity from suit but only as long as it can be

thePhilippines.Its presence is by virtue of a joint project

established that he is acting within the directives of the

entered into by thePhilippine Government and theUnited

sending state. The consent of the host state is an

Nations for mineral exploration in DinagatIsland

indispensable requirement of basic courtesy between the

ERNESTO CALLADO vs. INTERNATIONAL RICE

two sovereigns.

RESEARCH INSTITUTE (IRRI)

G.R. No. 106483 May 22, 1995/ ROMERO, J.:

expressly waived by the Director-General of the Institute or

Facts: Ernesto Callado, petitioner, was employed as a driver

his authorized representatives.

at the IRRI. One day while driving an IRRI vehicle on an


official trip to the NAIA and back to the IRRI, petitioner

The SC upholds the constitutionality of the aforequoted law.

figured in an accident.

There is in this case "a categorical recognition by the


Executive Branch of the Government that IRRI enjoys

Petitioner was informed of the findings of a preliminary

immunities accorded to international organizations, which

investigation conducted by the IRRI's Human Resource

determination has been held to be a political question

Development Department Manager. In view of the findings,

conclusive upon the Courts in order not to embarass a

he was charged with:

political department of Government.

(1) Driving an institute vehicle while on official duty under the

It is a recognized principle of international law and under our

influence of liquor;

system of separation of powers that diplomatic immunity is

(2) Serious misconduct consisting of failure to report to

essentially a political question and courts should refuse to

supervisors the failure of the vehicle to start because of a

look beyond a determination by the executive branch of the

problem with the car battery, and

government, and where the plea of diplomatic immunity is

(3) Gross and habitual neglect of duties.

recognized and affirmed by the executive branch of the


government as in the case at bar, it is then the duty of the

Petitioner submitted his answer and defenses to the charges

courts to accept the claim of immunity upon appropriate

against him. However, IRRI issued a Notice of Termination

suggestion by the principal law officer of the government or

to petitioner.

other officer acting under his direction.

Thereafter, petitioner filed a complaint before the Labor

The raison d'etre for these immunities is the assurance of

Arbiter for illegal dismissal, illegal suspension and indemnity

unimpeded performance of their functions by the agencies

pay with moral and exemplary damages and attorney's fees.

concerned.

IRRI wrote the Labor Arbiter to inform him that the Institute

The grant of immunity to IRRI is clear and unequivocal and

enjoys immunity from legal process by virtue of Article 3 of

an express waiver by its Director-General is the only way by

Presidential Decree No. 1620, 5 and that it invokes such

which it may relinquish or abandon this immunity.

diplomatic immunity and privileges as an international


organization in the instant case filed by petitioner, not having

In cases involving dismissed employees, the Institute may

waived the same.

waive its immunity, signifying that such waiver is


discretionary on its part.

While admitting IRRI's defense of immunity, the Labor

ICMC vs. Calleja

Arbiter, nonetheless, cited an Order issued by the Institute

International Catholic Migration Commission vs. Calleja [GR

to the effect that "in all cases of termination, respondent IRRI

85750, Sept. 28, 1990]

waives its immunity," and, accordingly, considered the


defense of immunity no longer a legal obstacle in resolving

Facts:

the case.

An Agreement was forged between the Philippine


Government and the United Nations High Commissioner for

The NLRC found merit in private respondent's appeal and,

Refugees [Vietnamese refugees of the Vietnam War]

finding that IRRI did not waive its immunity, ordered the

whereby an operating center for processing Indo-Chinese

aforesaid decision of the Labor Arbiter set aside and the

refugees for eventual resettlement to other countries was to

complaint dismissed.

be established inBataan.

In this petition petitioner contends that the immunity of the

ICMC was one of those accredited by the Philippine

IRRI as an international organization granted by Article 3 of

Government to operate the refugee processing center in

Presidential Decree No. 1620 may not be invoked in the

Morong, Bataan. It was incorporated in New York, USA, at

case at bench inasmuch as it waived the same by virtue of

the request of the Holy See, as a non-profit agency involved

its Memorandum on "Guidelines on the handling of

in international humanitarian and voluntary work. It is duly

dismissed employees in relation to P.D. 1620."

registered with the United Nations Economic and Social


Council (ECOSOC) and enjoys Consultative Status,

Issue: Did the (IRRI) waive its immunity from suit in this

Category II. As an international organization rendering

dispute which arose from an employer-employee

voluntary and humanitarian services in the Philippines.

relationship?
Trade Unions of the Philippines and Allied Services (TUPAS)
Held: No.

filed with the then Ministry of Labor and Employment a


Petition for Certification Election among the rank and file

P.D. No. 1620, Article 3 provides:

members employed by ICMC. The latter opposed the

Art. 3. Immunity from Legal Process. The Institute shall enjoy

petition on the ground that it is an international organization

immunity from any penal, civil and administrative

registered with the United Nations and, hence, enjoys

proceedings, except insofar as that immunity has been

diplomatic immunity.

Director Pura Calleja of the Bureau of Labor Relations

Sanders disagreed with the hearing officer's report. The

(BLR), reversed the Med-Arbiter's Decision and ordered the

letter contained the statements that: a ) "Mr. Rossi tends to

immediate conduct of a certification election. At that

alienate most co-workers and supervisors;" b) "Messrs.

time, ICMC's request for recognition as a specialized agency

Rossi and Wyers have proven, according to their immediate

was still pending with the Department of Foreign Affairs

supervisors, to be difficult employees to supervise;" and c)

(DEFORAF).

"even though the grievants were under oath not to discuss


the case with anyone, (they) placed the records in public

Subsequently, DEFORAF, granted ICMC the status of a

places where others not involved in the case could hear."

specialized agency with corresponding diplomatic privileges


and immunities, as evidenced by a Memorandum of

Before the start of the grievance hearings, a-letter from

Agreement between the Government and ICMC. ICMC then

petitioner Moreau was sent to the Chief of Naval Personnel

sought the immediate dismissal of the TUPAS Petition for

explaining the change of the private respondent's

Certification Election sustaining the affirmative of the

employment status. So, private respondent filed for damages

proposition.

alleging that the letters contained libelous imputations and


that the prejudgment of the grievance proceedings was an

Issue:

invasion of their personal and proprietary rights.

Is the grant of diplomatic privileges and immunites to ICMC


is proper?

However, petitioners argued that the acts complained of

Held:

were performed by them in the discharge of their official

The foregoing opinions constitute a categorical recognition

duties and that, consequently, the court had no jurisdiction

by the Executive Branch of the Government that ICMC and

over them under the doctrine of state immunity. However,

IRRI enjoy immunities accorded to international

the motion was denied on the main ground that the

organizations, which determination has been held to be a

petitioners had not presented any evidence that their acts

political question conclusive upon the Courts in order not to

were official in nature.

embarrass a political department of Government.


It is a recognized principle of international law and under our

ISSUE:

system of separation of powers that diplomatic immunity is


essentially a political question and courts should refuse to

Whether or not the petitioners were performing their official

look beyond a determination by the executive branch of the

duties?

government, and where the plea of diplomatic immunity is


recognized and affirmed by the executive branch of the

RULING:

government as in the case at bar, it is then the duty of the


courts to accept the claim of immunity upon appropriate

Yes. Sanders, as director of the special services department

suggestion by the principal law officer of the government . . .

of NAVSTA, undoubtedly had supervision over its personnel,

or other officer acting under his direction. Hence, in

including the private respondents. Given the official

adherence to the settled principle that courts may not so

character of the letters, the petitioners were being sued as

exercise their jurisdiction . . . as to embarrass the executive

officers of the United States government because they have

arm of the government in conducting foreign relations, it is

acted on behalf of that government and within the scope of

accepted doctrine that in such cases the judicial department

their authority. Thus, it is that government and not the

of (this) government follows the action of the political branch

petitioners personally that is responsible for their acts.

and will not embarrass the latter by assuming an


antagonistic jurisdiction.

It is stressed at the outset that the mere allegation that a

Sanders v. Veridiano GR L-46930 (June10, 1988)

government functionary is being sued in his personal

FACTS:

capacity will not automatically remove him from the


protection of the law of public officers and, if appropriate, the

Petitioner Sanders was the special services director of the

doctrine of state immunity. By the same token, the mere

U.S. Naval Station. Petitioner Moreau was the

invocation of official character will not suffice to insulate him


from suability and liability for an act imputed to him as a

commanding officer of the Subic Naval Base. Private

personal tort committed without or in excess of his authority.

respondent Rossi is an American citizen with permanent

These well-settled principles are applicable not only to the

residence in the Philippines. Private respondent Rossi and

officers of the local state but also where the person sued in

Wyer were both employed as game room attendants in the

its courts pertains to the government of a foreign state, as in

special services department of the NAVSTA.

the present case.

On October 3, 1975, the private respondents were advised

Assuming that the trial can proceed and it is proved that the

that their employment had been converted from permanent

claimants have a right to the payment of damages, such

full-time to permanent part-time. They instituted grievance

award will have to be satisfied not by the petitioners in their

proceedings to the rules and regulations of the U.S.

personal capacities but by the United States government as

Department of Defense. The hearing officer recommended

their principal. This will require that government to perform

for reinstatement of their permanent full-time status.

an affirmative act to satisfy the judgment, viz, the


appropriation of the necessary amount to cover the damages

However, in a letter addressed to petitioner Moreau,

awarded, thus making the action a suit against that

government without its consent.


Held:
The practical justification for the doctrine, as Holmes put it, is
that "there can be no legal right against the authority which

Yes. The plaintiff has impleaded the Republic of

makes the law on which the right depends. In the case of

the Philippines as defendant in an action for recovery of

foreign states, the rule is derived from the principle of the

ownership and possession of a parcel of land, bringing the

sovereign equality of states which wisely admonishes that

State to court just like any private person who is claimed to

par in parem non habet imperium and that a contrary attitude

be usurping a piece of property.

would "unduly vex the peace of nations."


17

The complaint is clearly a suit against the State,


which under settled jurisprudence is not permitted, except

Our adherence to this precept is formally expressed in

upon a showing that the State has consented to be sued,

Article II, Section 2, of our Constitution, where we reiterate

either expressly or by implication through the use of statutory

from our previous charters that the Philippines "adopts the

language too plain to be misinterpreted. There is no such

generally accepted principles of international law as part of

showing in the instant case. Worse, the complaint itself fails

the law of the land. WHEREFORE, the petition is

to allege the existence of such consent. This is a fatal defect,

GRANTED.

and on this basis alone, the complaint should have been

Republic v. Feliciano

dismissed.

G.R. No. 70853 March 12, 1987


The failure of the petitioner to assert the defense

Yap, J.

of immunity from suit when the case was tried before the
court a quo, as alleged by private respondent, is not fatal.

Facts:

Such defense may be invoked by the courts sua sponte at


Respondent Feliciano filed a complaint with the

any stage of the proceedings.

then Court of First Instance of Camarines Sur against the

Tan v. Director of Forestry

Republic of the Philippines, represented by the Land

G.R. No. L- 24548October 27, 1983

Authority, for the recovery of ownership and possession of a

Makasiar, J.

parcel of land, consisting of four (4) lots with an aggregate


area of 1,364.4177 hectares, situated in the Barrio of

Facts:

Salvacion, Municipality of Tinambac, Camarines Sur. Plaintiff


alleged that he bought the property in question from Victor

Sometime in April 1961, the Bureau of Forestry

Gardiola by virtue of a Contract of Sale dated May 31, 1952,

issued Notice No. 2087, advertising for public bidding a

followed by a Deed of Absolute Sale on October 30, 1954;

certain tract of public forest land situated in Olongapo,

that Gardiola had acquired the property by purchase from

Zambales, provided tenders were received on or before May

the heirs of Francisco Abrazado whose title to the said

22, 1961. This public forest land, consisting of 6,420

property was evidenced by an informacion posesoria that

hectares, is located within the former U.S. Naval Reservation

upon plaintiffs purchase of the property, he took actual

comprising 7,252 hectares of timberland, which was turned

possession of the same, introduced various improvements

over by the United States Government to the Philippine

therein and caused it to be surveyed in July 1952, which

Government.

survey was approved by the Director of Lands on October


24, 1954; that on November 1, 1954, President Ramon

On May 5, 1961, petitioner-appellant Wenceslao Vinzons

Magsaysay issued Proclamation No. 90 reserving for

Tan submitted his application in due form after paying the

settlement purposes, under the administration of the

necessary fees and posting tile required bond therefor. Nine

National Resettlement and Rehabilitation Administration

other applicants submitted their offers before the deadline.

(NARRA), a tract of land situated in the Municipalities of


Tinambac and Siruma, Camarines Sur, after which the

On May 30, 1963, the Secretary of Agriculture and Natural

NARRA and its successor agency, the Land Authority,

Resources Benjamin M. Gozon who succeeded Secretary

started sub-dividing and distributing the land to the settlers;

Cesar M. Fortich in office issued General Memorandum

that the property in question, while located within the

Order No. 46, series of 1963, pertinent portions of which

reservation established under Proclamation No. 90, was the

state:

private property of plaintiff and should therefore be excluded

xxx xxx xxx

therefrom. Plaintiff prayed that he be declared the rightful


and true owner of the property in question consisting of

SUBJECT: ... ... ...

1,364.4177 hectares; that his title of ownership based

(D)elegation of authority to the Director of Forestry to grant

on informacion posesoria of his predecessor-in-interest be

ordinary timber licenses.

declared legal valid and subsisting and that defendant be

1. ... ... ...

ordered to cancel and nullify all awards to the settlers.

2. The Director of Forestry is hereby authorized to grant (a)

Issue:

new ordinary timber licenses where the area covered


whether the complaint of respondent Pablo

thereby is not more than 3,000 hectares each; and (be the

Feliciano for recovery of ownership and possession of a

extension of ordinary timber licenses for areas not exceeding

parcel of land should be dismissed on the ground of non-

5,000 hectares each;

suability of the State

3. This Order shall take effect immediately.

circumvented by directing the action against the officers of


Thereafter, Jose Y. Feliciano was appointed as Acting

the State instead of against the State itself. In such cases

secretary of Agriculture and Natural Resources, replacing

the States immunity may be validly invoked against the

secretary Benjamin M. Gozon. Upon assumption of office he

action as long as it can be shown that the suit really affects

Immediately promulgate on December 19, 19b3 General

the property, rights, or interests of the State and not merely

memorandum Order No. 60, revoking the authority

those of the officer nominally made party defendant.

delegated to the Director of Forestry, under General


Memorandum order No. 46, to grant ordinary timber

Both the Secretary of Agriculture and Natural

licenses, which order took effect on the same day,

Resources and the Director of Forestry acted in their

December 19, 1963. Pertinent portions of the said Order

capacity as officers of the State, representatives of the

read as follows:

sovereign authority discharging governmental powers. A


private individual cannot issue a timber license.

xxx xxx xxx

Consequently, a favorable judgment for the petitionerappellant would result in the government losing a substantial

SUBJECT: Revocation of General Memorandum Order No

part of its timber resources. This being the case, petitioner-

46 dated May 30, 1963

appellants action cannot prosper unless the State gives its


consent to be sued.

1. In order to acquaint the undersigned with the volume and


Nature of the work of the Department, the authority

Veterans Manpower and Protective Services, Inc. vs. Court of

delegated to the Director of forestry under General

Appeals

Memorandum Order No. 46, dated May 30, 1963, to grant


(a) new ordinary timber licenses where the area covered
thereby is not more than 3,000 hectares each; and (b) the

FACTS:
This is a petition for review on certiorari of the

extension of ordinary timber licenses for areas not exceeding

decision dated August 11, 1989. On May 12, 1986, a

3,000 hectares each is hereby revoked. Until further notice,

Memorandum of Agreement was executed by PADPAO and

the issuance of new licenses , including amendments

the PC Chief, which fixed the minimum monthly contract rate

thereto, shall be signed by the secretary of Agriculture and

per guard for eight (8)hours of service security per day. On

Natural Resources.

June 29, 1987, Odin Security Agency filed a complaint with


PADPAO accusing VMPSI of cut-throat competition.

2. This Order shall take effect immediately and all other

PADPAO and PC-SUSIA found VMPSI guilty and

previous orders, directives, circulars, memoranda, rules and

recommended its expulsion from PADPAO and the

regulations inconsistent with this Order are hereby revoked

cancellation of its license to operate a security agency. As a

(Emphasis supplied).

result, PADPAO refused to issue a clearance/certificate


of membership to VMPSI when it requested one. VMPSI

On December 19, 1963, Ordinary Timber License No. 20-64

filed Civil Case No. 88-471 against the PC-Chief and PC-

(NEW) dated April 22, 1963, in the name of Wenceslao

SUSIA in the RTC-Makati Branch 135, on March 28, 1988.

Vinzons Tan, was signed by then Acting Director of Forestry

On the same date, the court issued a restraining order

Estanislao R. Bernal without the approval of the Secretary of

enjoining the PC Chief and PC-SUSIA from committing acts

Agriculture and Natural Resources. On January 6, 1964, the

that would result in the cancellation or non-renewal of

license was released by the Office of the Director of

VMPSIs license. The PC Chief and PC-SUSIA filed a Motion

Forestry. It was not signed by the Secretary of Agriculture

to Dismiss, Opposition to the Issuance of Writ of Preliminary

and Natural Resources as required by Order No. 60

Injunction, and Motion to Quash the TRO, on the grounds

aforequoted.

that the case is against the State which had not given
consent thereto and that VMPSIs license already expired on

On February 12, 1964, Ravago Commercial Company wrote

March 31, 1988, hence, the restraining order or preliminary

a letter to the Secretary of Agriculture and Natural

injunction would not serve any purpose because there was

Resources shall be considered by tile Natural Resources

no more license to be cancelled. Respondent VMPSI

praying that, pending resolution of the appeal filed by

opposed the motion. On April 18, 1988 the lower court

Ravago Commercial Company and Jorge Lao Happick from

denied VMPSIs application for a writ of preliminary

the order of the Director of Forestry denying their motion for

injunction for being premature but VMPSI reiterated its

reconsideration, OTI No. 20-64 in the name of Wenceslao

application for the issuance of preliminary injunction because

V. Tan be cancelled or revoked on the ground that the grant

PC-SUSIA had rejected payment of the penalty for its failure

thereof was irregular, anomalous and contrary to existing

to submit its application for renewal of its license. On June

forestry laws, rules and regulations.

10, 1988, the RTC-Makati issued a writ of preliminary

Issue:

injunction upon a bond of P100,000. restraining the


whether the case involves a suit against the State

defendant from cancelling or denying renewal of VMPSIs

without its consent

license. The PC-Chief and PC-SUSIA filed a Motion for

Held:

Reconsideration of the above order, but it was denied by the


Yes. This action is a suit against the State which,

court. On November 3, 1988, the PC-Chief and PC-SUSIA

under the doctrine of State immunity from suit, cannot

sought relief by a petition for certiorari in the Court of

prosper unless the State gives its consent to be sued. The

Appeals. On August 11, 1989, the Court of Appeals granted

rule establishing State immunity from suits may not be

the petition.

now the Clerk of this Court that is at the same time the
HELD:

Ex-Officio Sheriff. As such Ex-Officio Sheriff, the Clerk

Wherefore, the petition for review is DENIED and the

of this Court has therefore the authority to issue writs of

judgment appealed from is AFFIRMED

execution and notices of garnishment in an area

in toto. The State may not be sued without its consent.

encompassing the whole of the country, including

Invoking this rule, the PC Chief and PC-SUSIA, being

Quezon City, since his area of authority is coterminous

instrumentalities of the national government exercising a

with that of the Court itself, which is national in nature.

primarily governmental function of regulating the

... At this stage, the Court notes from the record that the

organization and operation of private detective, watchmen,

appeal to the Supreme Court by individual employees of

or security guard agencies, said official and agency may not

PHHC which questions the award of attorney's fees to

be sued without the Governments consent, especially in this

Atty. Gabriel V. Manansala, has already been dismissed

case because VMPSIs complaint seeks not only to compel

and that the same became final and executory on

the public respondents to act in a certain way, but worse,

August 9, 1970. There is no longer any reason,

because VMPSI seeks actual and compensatory damages in

therefore, for withholding action in this case.

the sum P1,000,000.00 exemplary damages in the same

[Wherefore], the motion to quash filed by the Philippine

amount, and P200,000.00 as attorneys fees from said public

National Bank is denied for lack of merit. The said Bank

respondents. Even if its action prospers, the payment of its

is therefore ordered to comply within five days from

monetary claims may not been forced because the State did

receipt with the 'notice of Garnishment' dated May 6,

not consent to appropriate the necessary funds for that

1970." 5 There was a motion for reconsideration filed by

purpose.

petitioner, but in a resolution dated September 22, 1970,


it was denied. Hence, this certiorari petition.

PRINCIPLE:

Issue: WON the funds mentioned may be garnished

States immunity from suit.

Ruling: No
Rationale:

PNB v. CIR

National Shipyard and Steel Corporation v. court of

Facts:

Industrial Relations 6 is squarely in point. As was

Petitioners motion to quash a notice of garnishment

explicitly stated in the opinion of the then Justice, later

was denied for lack of merit. What was sought to be

Chief Justice, Concepcion: "The allegation to the effect

garnished was the money of the People's Homesite and

that the funds of the NASSCO are public funds of the

Housing Corporation deposited at petitioner's branch in

government, and that, as such, the same may not be

Quezon City, to satisfy a decision of respondent Court

garnished, attached or levied upon, is untenable for, as

which had become final and executory. A writ of

a government owned and controlled corporation. the

execution in favor of private respondent Gabriel V.

NASSCO has a personality of its own, distinct and

Manansala had previously been issued. He was the

separate from that of the Government. It has pursuant to

counsel of the prevailing party, the United Homesite

Section 2 of Executive Order No. 356, dated October 23,

Employees and Laborers Association. The validity of the

1950 ..., pursuant to which the NASSCO has been

order assailed is challenged on two grounds: (1) that the

established 'all the powers of a corporation under the

appointment of respondent Gilbert P. Lorenzo as

Corporation Law ...' Accordingly, it may sue and be sued

authorized deputy sheriff to serve the writ of execution

and may be subjected to court processes just like any

was contrary to law and (2) that the funds subject of the

other corporation (Section 13, Act No. 1459), as

garnishment "may be public in character."

amended."

The order of August 26, 1970 of respondent Court

In a 1941 decision, Manila Hotel Employees Association

denying the motion to quash, subject of this certiorari

v. Manila Hotel Company, 8 this Court, through Justice

proceeding, reads as follows: "The Philippine National

Ozaeta, held: "On the other hand, it is well settled that

Bank moves to quash the notice of garnishment served

when the government enters into commercial business,

upon its branch in Quezon City by the authorized deputy

it abandons its sovereign capacity and is to be treated

sheriff of this Court. It contends that the service of the

like any other corporation. (Bank of the United States v.

notice by the authorized deputy sheriff of the court

Planters' Bank, 9 Wheat, 904, 6 L.ed. 244). By engaging

contravenes Section 11 of Commonwealth Act No. 105,

in a particular business thru the instrumentality of a

as amended which reads:" 'All writs and processes

corporation, the governmnent divests itself pro hac vice

issued by the Court shall be served and executed free of

of its sovereign character, so as to render the

charge by provincial or city sheriffs, or by any person

corporation subject to the rules of law governing private

authorized by this Court, in the same manner as writs

corporations."

and processes of Courts of First Instance.' Following the

Both the Palacio and the Commissioner of Public

law, the Bank argues that it is the Sheriff of Quezon City,

Highways decisions, insofar as they reiterate the

and not the Clerk of this Court who is its Ex-Officio

doctrine that one of the coronaries of the fundamental

Sheriff, that has the authority to serve the notice of

concept of non-suability is that governmental funds are

garnishment, and that the actual service by the latter

immune from garnishment. It is an entirely different

officer of said notice is therefore not in order. The Court

matter if, according to Justice Sanchez in Ramos v.

finds no merit in this argument. Republic Act No. 4201

Court of Industrial Relations, the office or entity is

has, since June 19, 1965, already repealed

"possessed of a separate and distinct corporate

Commonwealth Act No. 103, and under this law, it is

existence." Then it can sue and be sued. Thereafter, its

function, by virtue of the explicit provision of the aforecited

funds may be levied upon or garnished.

enabling law, the government must be deemed to have

GAUDENCIO RAYO vs. COURT OF FIRST INSTANCE OF

waived immunity in respect of the SSS, although it does not

BULACAN G.R. No. L-55273-83 December 19, 1981

thereby concede its liability that statutory law has given to

FACTS: At the height of the infamous typhoon "Kading", the

the private citizen a remedy for the enforcement and

respondent opened simultaneously all the three floodgates

protection of his rights. The SSS thereby has been required

of the Angat Dam which resulted in a sudden, precipitate

to submit to the jurisdiction of the court; subject to its right to

and simultaneous opening of said floodgates several towns

interpose any lawful defense.

in Bulacan were inundated. The petitioners filed for damages

PNR v. IAC

against the respondent corporation. Petitioners opposed the

GR No. 70547; January 22, 1993

prayer of the respondents forn dismissal of the case and


contended that the respondent corporation is merely

FACTS:

performing a propriety functions and that under its own

The passenger express train of Philippine National Railways

organic act, it can sue and be sued in court.

(PNR) and a passenger bus of Baliwag Transit Inc. collided

ISSUE: W/N the respondent performs governmental

at the railroad crossing at Barrio Balungao, Calumpit

functions with respect to the management and operation of

Bulacan at 1:30 in the afternoon of August 10, 1947 causing

the Angat Dam.

damage to the bus and its passengers, 18 of whom died and

W/N the power of the respondent to sue and be sued under

53 suffered physical injuries. Plaintiff alleges that the

its organic charter includes the power to be sued for tort.

collision was due to the negligence and imprudence of PNR

HELD: The government has organized a private corporation,

and its engineer Honorio Cirbado in operating in a busy

put money in it and has allowed it to sue and be sued in any

intersection without any bars, semaphores, signal lights,

court under its charter. As a government owned and

flagman or switchman.

controlled corporation, it has a personality of its own, distinct


and separate from that of the government. Moreover, the

ISSUE:

charter provision that it can sue and be sued in any court.

1)

SSS vs. CA

negligent?

(120 SCRA 707)

2)

FACTS:

HELD:
Spouses David and Socorro Cruz, applied and

Who between the petitioner and respondent was

Is PNR immune from suit?

There is no admissible evidence to show that the bus driver

granted a real estate loan by the SSS with residential lot

did not take necessary precaution in traversing the track.

located at Pateros, Rizal as collateral. The spouses Cruz

Contributory negligence may not be ascribed to the bus

complied with their monthly payments. When delayed were

driver for he had taken necessary precautions before

incurred in their monthly payments SSS filed a petition for

passing over the railway track. The failure of PNR, on the

foreclosure of their real estate mortgage executed by the

other hand, to put a cross bar, or signal light, flagman, or

spouses Cruz on the ground that the spouses Cruz defaulted

switchman or semaphores is evidence of negligence on their

in payment, Pursuant for these application for foreclosure

part.

notices were published on the second notice the counsel for

By the doctrine of implied powers, the power to sue and be

spouses Cruz sent a letter to SSS informing the latter that

sued is implicit from the faculty to transact private business.

his clients are up to date in their payment of the monthly

PNR is not exercising governmental powers, as such it is not

amortization and the SSS should discontinued the

immune from suit.

publication of the notices of foreclosure. This request remain


unheaded, this spouses Cruz filed an action for damages

Bureau of Printing vs Bureau of Printing Employees

against SSS before RTC in Rizal. SSS invoking its immunity

Association

from suit being an agency of the government performing

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

government function. The trial court and court of appeal

1 SCRA 340

nevertheless awarded damages in favor of spouses Cruz


which was affirmed by court of appeal, Hence this petition.

Facts:

ISSUE: Whether or not SSS is immune from suit.

of Printing Employees Association against the Bureau of

Upon complaint of the respondents of the Bureau

Printing, the complaint alleged that the latter have been


HELD:

engaging in unfair labor practices by interfering with, or


Negative.. The SSS has a distinct legal personality

coercing their employees, in the exercise of their right to self-

and it can be sued for damages. The SSS does not enjoy

organization and discriminating in regard to hire and tenure

immunity from suit by express statutory consent.

of their employment in order to discourage themfrom


pursuing the union activities.

It has corporated power separate and distinct from

The Petitioners of Bureau of Printing denied the

the government. SSS own organic act specifically provides

charges of unfair labor practices attributed to and, by way of

that it can sue and be sued in court. These words sue and

affirmative defenses, alleged, among other things, that the

be sued embrace all civil process incident to a legal action.

respondents of the Bureau of Printing Employees

So that even assuming that the SSS, as it claims, enjoys

Association were suspending the pending result of an

immunity from suit as an entity performing governmental

administrative investigation against them for breach of Civil

Service rules and regulations petition; that the Bureau of

taxes due in the amount of P11,350.00 dated February 1,

Printing has no juridical personality to sue and be sued; that

1972.

said bureau is not an industrial concern engaged for the

The Office of the Collector of Customs ordered a

purpose of gain but is an agency of the Republic performing

re-examination of the shipment upon hearing the information

government functions. The petitioners filed an "Omnibus

that the shipment consisted of mosquito net made of nylon

Motion" asking for a preliminary hearing on the question of

under Tariff Heading No. 62.02 of the Tariff and Customs

jurisdiction raised by them in their answer and for

Code. Upon re-examination, report shows that the shipment

suspension of the trial of the case on the merits pending the

was undervalued in quantity, quality and of value. The

determination of such jurisdical question.

Collector of Customs determined the subject shipment is

Issue:

classifiable under Tariff Heading No. 51.04-B at 100% ad


Whether or not the Bureau of Printing, in the

proceeding in the action for unfair labor practice, lacks

valorem and thus, forfeited the shipment in favor of the


government.

jurisdiction thereof.
Held:

Private respondent filed a petition on August 20,


1976 for the release of the questioned goods which the

The trial judge of the Industrial Court in an order

Court denied. On June 2, 1986, 64 bales out of the 80 bales

dated January 27, 1959 sustained the jurisdiction of the

were released to Bagong Buhay Trading after several

court on the theory that the functions of the Bureau of

motion. The sixteen remaining bales were missing. The

Printing are "exclusively proprietary in nature,". The Bureau

respondent claims that of the 143,454 yards released, only

of Printing is an office of the Government created by the

116,950 yards were in good condition and the rest were not.

Administrative Code of 1916 (Act No. 2657). As such

Thus, respondents demands that the Bureau of Customs be

instrumentality of the Government, it operates under the

ordered to pay for damages for the 43,050 yards it actually

direct supervision of the Executive Secretary, Office of the

lost.

President, and is "charged with the execution of all printing

Issue:

and binding, including work incidental to those processes,

Whether or not the Collector of Customs may be

required by the National Government and such other work of

held liable for the 43,050 yards actually lost by the private

the same character as said Bureau may, by law or by order

respondent.

of the Executive Secretary, be authorized to undertake...". It

Held:

has no corporate existence, and its appropriations are

Bureau of Customs cannot be held liable for actual

provided for in the General Appropriations Act. Designed to

damages that the private respondent sustained with regard

meet the printing needs of the Government, it is primarily a

to its goods. Otherwise, to permit private respondent's claim

service bureau and obviously, not engaged in business or

to prosper would violate the doctrine of state immunity. Since

occupation for pecuniary profit. Overtime work in the Bureau

it demands that the Commissioner of Customs should pay

of Printing is done only when the interest of the service so

for actual damages it sustained, the ultimately liability falls

requires. As a matter of administrative policy, the overtime

to the government, this case has been converted technically

compensation may be paid, but such payment is

into a suit against the state.


On this point, the political doctrine that state may

discretionary with the head of the Bureau depending upon its


current appropriations, so that it cannot be the basis for

not be sued without its consent, applies. As an

holding that the functions of said Bureau are wholly

unincorporated government agency without any separate

proprietary in character. The additional work it executes for

judicial personality of its own, the Bureau of Customs enjoys

private parties is merely incidental to its function, and

immunity from suit. Along with the Bureau of Internal

although such work may be deemed proprietary in character,

Revenue, it is invested with an inherent power of

there is no showing that the employees performing said

sovereignty, namely, taxation. As an agency, the Bureau of

proprietary function are separate and distinct from those

Customs performs the governmental function of collecting

employed in its general governmental functions.

revenues which is not a proprietary function. Thus private

As an office of the Government, without any


corporate or juridical personality, the Bureau of Printing

respondents claim for damages against the Commissioner of


Customs must fails.

cannot be sued. Any suit, action or proceeding against it, if it


were to produce any effect, would actually be a suit, action

Mobil Philippines Exploration vs Customs Arrastre

or proceeding against the Government itself, and the rule is

Service

settled that the Government cannot be sued without its

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

consent, much less over its objection.

18 SCRA 1120

Farolan vs Court of Tax Appeals


G.R. No. 42204 January 21, 1993
217 SCRA 298

Facts:
Sometime during the month of November 1962,
four cases of rotary drill parts were shipped from abroad on

Facts:

S.S. ''Leoville'' consigned to Mobil Philippines Exploration,


On January 30, 1972 at the Port of Manila, S/S

Inc., Manila. It was dishcarged to the custody of the Customs

Pacific Hawk vessel with Registry No. 170 arrived carrying

Arrastre Service, the unit of the Bureau of Customs then

among others, 80 bales of screen net consigned to Baging

handling arrastre operations. The Customs Arrastre Service

Buhay Trading (Baging Buhay). The import was classified

later delivered to the broker of the consignee three cases

under Tariff Heading no. 39.06-B of the Tariff and Customs

only. Petitioner then filed a suit in the Court of First Instance

Code at 35% ad valorem. Bagong Buhay paid the duties and

of Manila against the Customs to recover the value of

undelivered case plus other damages thereof. The

made between one which is executed in the exercise of its

respondents filed a motion to dismiss on the ground that not

sovereign functions and another which is done in the

being persons under the law, they cannot be sued.

proprietary capacity. State gives consent upon financial

Issue:

claims arising from a contract. Under Act No. 3038, a


Whether or not the defendants can invoke state

immunity.

general law, the State consents and submits to be sued


upon any money claim involving liability arising from

Held:

contract, express or implied. However, the money claim


YES. If an agency's function is deemed

proprietary, if such is a necessary incident of the primary and

must first be brought to the Commission on Audit.


Wherefore, the petition is granted.

government function of such agency, such agency is not


suable. If an agency performs a non-governmental function

Farolan vs CTA

and is undertaken as an incident to its governmental

Facts:

function, there is no waiver thereby of the state immunity

S/S Pacific Hawk vessel with Registry No. 170 arrived on

from suit extended to such government entity. The Bureau of

January 30, 1972 at the Port of Manila carrying among

Customs is part of the Department of Finance with no

others, 80 bales of screen net consigned to Baging Buhay

personality of its own apart from that of the national

Trading (Baging Buhay). The import was classified under

government. Its primary function is governmental, such as

Tariff Heading no. 39.06-B of the Tariff and Customs Code

assessing and collecting lawful revenues from imported

at 35% ad valorem. Bagong Buhay paid the duties and taxes

articles and all other tariff and custom duties, fees, charges,

due in the amount of P11,350.00.

fines and penalties. To this function, arrastre service is a


necessary incident.

The Office of the Collector of Customs ordered a reexamination of the shipment upon hearing the information

Department of Agriculture vs National Labor Relations

that the shipment consisted of mosquito net made of nylon

Commission

under Tariff Heading No. 62.02 of the Tariff and Customs

G.R. No. 104269 November 11, 1993

Code. Upon re-examination, it turns out that the shipment

227 SCRA 693

was undervalued in quantity and value as previously


declared. Thus the Collector of Customs forfeited the

Facts:

shipment in favor of the government.


Department of Agriculture and Sultan Security

Agency entered into a contract for security services for the

Private respondent filed a petition on August 20, 1976 for the

government entity. September 13, 1990, several guards of

release of the questioned goods which the Court denied. On

the security agency filed a complaint for under payment of

June 2,1986, 64 bales out of the 80 bales were released to

13th month pay, unifrom allowances, night shift differential

Bagong Buhay after several motion. The sixteen remaining

pay, holiday pay and overtime pay, as well as for damages

bales were missing. The respondent claims that of the

before the Regional Arbitration Branch in Cagayan de Oro

143,454 yards released, only 116,950 yards were in good

City. The Labor Arbiter found the Department of Agriculture

condition and the rest were in bad condition. Thus,

jointly and liable with Sultan Agency for the payment of

respondents demands that the Bureau of Customs be

money claim of the guards.

ordered to pay for damages for the 43,050 yards it actually

Department of Agriculture filed a petition and

lost.

mandamus, with prayer for preliminary injunction with the


National Labor Relations Commission Cagayan de Oro. It

Issue:

argued that the writ of execution was effected without the

Whether or not the Collector of Customs may be held liable

Labor Arbiter having duly acquired jurisdiction over the said

for the 43,050 yards actually lost by the private respondent.

department. Hence, its decision was null and void.


National Labor Relations Commission dismissed

Held:

the petition. Thus provoked the Department of Agriculture to

Bureau of Customs cannot be held liable for actual damages

charge National Labor Relations Commission for grave

that the private respondent sustained with regard to its

abuse of discretion for refusing to reject the writ of execution.

goods. Otherwise, to permit private respondent's claim to

It argued that money claims against the department falls

prosper would violate the doctrine of sovereign immunity.

under the exclusive jurisdiction of the Commission on Audit.

Since it demands that the Commissioner of Customs be

Department of Agriculture asserts that National Labor

ordered to pay for actual damages it sustained, for which

Relations Commission has disregarded the cardinal rule on

ultimately liability will fall on the government, it is obvious

the non-suability of the state. National Labor Relations

that this case has been converted technically into a suit

Commission, on the other hand, argue that the petitioner has

against the state.

impliedly waived its immunity from suit by concluding a


service contract with Sultan Security Agency.

On this point, the political doctrine that state may not be

Issue:

sued without its consent, categorically applies. As an


Whether or not the Department of Agriculture can

unincorporated government agency without any separate

be sued.

judicial personality of its own, the Bureau of Customs enjoys

Held:

immunity from suit. Along with the Bureau of Internal


Not all contracts entered into by the government

operate as a waiver of its non-suability. Distinction must be

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

business contracts. It does notapply where the contract

revenues which is defined not a proprietary function. Thus

relates to the exercise of its sovereign functions.

private respondents claim for damages against the


Commissioner of Customs must fails.

In the case, the DA has not pretended to have assumed a


capacity apart from its being a governmental entity when it

Department of Agriculture vs. NLRC G.R. No. 104269,

entered into the questioned contract; nor that it could have,

November 11, 1993

in fact, performed any act proprietary in character.

Sunday, January 25, 2009 Posted by Coffeeholic Writes


Labels: Case Digests, Political Law

But, be that as it may, the claims of the complainant security


guards clearly constitute money claims. Act No. 3083 gives

Facts: Petitioner Department of Agriculture (DA) and

the consent of the State to be sued upon any moneyed claim

Sultan Security Agency entered into a contract for security

involving liability arising from contract, express or implied.

services to be provided by the latter to the said

Pursuant, however, to Commonwealth Act 327, as amended

governmental entity. Pursuant to their arrangements, guards

by PD 1145, the money claim must first be brought to the

were deployed by Sultan Security Agency in the

Commission on Audit.

various premisesof the DA. Thereafter, several guards filed a

National Airports Corp vs Teodoro

complaint for underpayment of wages, nonpayment of 13th

91 Phil 203

month pay, uniform allowances, night shift differential pay,


holiday pay, and overtime pay, as well as for damages

FACTS:

against the DA and the security agency.

The National Airports Corporation was organized under


Republic Act No. 224, which expressly made the provisions

The Labor Arbiter rendered a decision finding the DA jointly

of the Corporation Law applicable to the said corporation.

and severally liable with the security agency for the payment

On November 10, 1950, the National Airports Corporation

of money claims of the complainant security guards. The DA

was abolished by Executive Order No. 365 and to take its

and the security agency did not appeal the decision. Thus,

place the Civil Aeronautics Administration was created.

the decision became final and executory. The Labor Arbiter

Before the abolition, the Philippine Airlines, Inc. paid to the

issued a writ of execution to enforce and execute the

National Airports Corporation P65, 245 as fees for landing

judgment against the property of the DA and the security

and parking on Bacolod Airport No. 2 for the period up to

agency. Thereafter, the City Sheriff levied on execution the

and including July 31, 1948. These fees are said to have

motor vehicles of the DA.

been due and payable to the Capitol Subdivision, Inc. which

Issue: Whether or not the doctrine of non-suability of the

owned the land used by the National Airports Corporation as

State applies in the case

airport, and the owner commenced an action in the Court of


First Instance of Negros Occidental against the Philippine

Held: The basic postulate enshrined in the Constitution that

Airlines, Inc.

the State may not be sued without its consent reflects

In 1951 to recover the above amount, The Philippine

nothing less than a recognition of the sovereign character of

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

the State and an express affirmation of the unwritten rule

the National Airports Corporation, which by that time had

effectively insulating it from the jurisdiction of courts. It is

been dissolved, and served summons on the Civil

based on the very essence of sovereignty. A sovereign is

Aeronautics Administration.

exempt from suit based on the logical and practical ground

The third party plaintiff alleged that it had paid to the National

that there can be no legal right as against the authority that

Airports Corporation the fees claimed by the Capitol

makes the law on which the right depends.

Subdivision, Inc. "on the belief and assumption that the third
party defendant was the lessee of the lands subject of the

The rule is not really absolute for it does not say that the

complaint and that the third party defendant and its

State may not be sued under any circumstances. The State

predecessors in interest were the operators and maintainers

may at times be sued. The States consent may be given

of said Bacolod Airport No. 2

expressly or impliedly. Express consent may be made

The Solicitor General, after answering the third party

through a general law or a special law. Implied consent, on

complaint, filed a motion to dismiss on the ground that the

the other hand, is conceded when the State itself

court lacks jurisdiction to entertain the third- party complaint,

commences litigation, thus opening itself to a counterclaim,

first, because the National Airports Corporation "has lost its

or when it enters into a contract. In this situation, the

juridical personality," and, second, because agency of the

government is deemed to have descended to the level of the

Republic of the Philippines, unincorporated and not

other contracting party and to have divested itself of its

possessing juridical personality under the law, is incapable

sovereign immunity.

of suing and being sued."

But not all contracts entered into by the government operate

ISSUE:

as a waiver of its non-suability; distinction must still be made

1.

between one which is executed in the exercise of its


sovereign function and another which is done in its

be sued
2.

proprietary capacity. A State may be said to have descended


to the level of an individual and can this be deemed to have
actually given its consent to be sued only when it enters into

Whether or not government corporate agency may

Whether or not the Civil Aeronautics


Administration can be sued

HELD

1.

As a general rule, state cannot be sued without its

illegal dismissal" and ordered them to reinstate

consent and there can be no legal basis against

private respondents with full back wages, or if that

the authority that formulate the law and which the

is no longer possible, to pay private respondents'

law depends. But the exemptions are the


unincorporated type of government and

separation pay.

Petitioner appealed to the NLRC claiming that the

functioning for proprietary. Not all government

Labor Arbiter never acquired jurisdiction over her

entities, whether corporate or non-corporate, are

person because no summons or copies of the

immune to suits. Immunity from suits is

complaints, both original and amended, were ever

determined by the character of the objects for

served on her. In her "Supplemental Memorandum

which the entity was organized. however

of Appeal," petitioner argued that the attempts to

contended that when a sovereign state enters into

serve her with notices of hearing were not in

a contract with a private person, the state can be

accordance with the provisions of the R.P.U.S.

sued upon the theory that it has descended to the

Military Bases Agreement of 1947.

level of an individual from which 'it can be implied


that it has given its consent to be sued under the
contract
2.

Issue:

Petitioner's contention that the questioned

Among the general powers of the Civil Aeronautics

resolutions are null and void because respondent

Administration are, under section 3 of Executive

Labor Arbiter did not acquire jurisdiction to

Order No. 365, to execute contracts of any kind, to

entertain and decide the case. Petitioner alleges

purchase property, and to grant concession rights,

that she never received nor was served, any

and under section 4, to charge landing fees,

summons or copies of the original and amended

royalties on sales to aircraft of aviation gasoline,

complaints, and therefore the Labor Arbiter had no

accessories and supplies, and rentals for. the use

jurisdiction over her person under Article XIV of

of any property under its management. These

the R.P.U.S. Military Bases Agreement.

provisions confer upon 'the Civil Aeronautics


Administration the power to sue and be sued,

For Reference:

which is implied from the power to transact private

R.P.U.S. Military Bases Agreement.

business. And if it has the power to sue and be

". . . [N]o process, civil or criminal, shall be served within any

sued on its behalf, the Civil Aeronautics

base except with the permission of the commanding officer

Administration with greater reason should have

of such base; but should the commanding officer refuse to

the power to prosecute and defend suits for and

grant such permission he shall forthwith take the necessary

against the Mational Airports Corporation, having

steps . . . to serve such process, as the case may be, and to

acquired all the properties, funds and choses in

provide the attendance of the server of such process before

action and assumed all the liabilities of the latter.

the appropriate court in the Philippines or procure such

According to the court, the petition is denied with costs

server to make the necessary affidavit or declaration to

against the Civil Aeronautics Administration.

prove such service as the case may require."

Larkins vs NLRC

Ruling:

summonses and other processes issued by

Facts:

On August 12, 1988, private respondents filed a

Philippine courts and administrative agencies for

complaint with the Regional Arbitration Branch No.

United States Armed Forces personnel within any

III of the NLRC, San Fernando, Pampanga for

U.S. base in the Philippines could be served

illegal dismissal and underpayment of wages.

therein only with the permission of the Base

Charges were against petitionerT/Sgt Aldora

Commander. If he withholds giving his permission,

Larkins who was a member of the United States

he should instead designate another person to

Air Force (USAF) assigned to oversee the

serve the process, and obtain the server's affidavit

dormitories of the Third Aircraft Generation

for filing with the appropriate court.Respondent

Squadron (3 AGS) at Clark Air Base, Pampanga.,

Labor Arbiter did not follow said procedure. He

Lt. Col. Frankhauster, and Joselito Cunanan,

instead, addressed the summons to Lt. Col.


Frankhauser and not the Base Commander.

the new contractor (JAC Maintenance Services)


employed for 3 AGS.

Labor Arbiter has no jurisdiction over the case as

Respondents do not dispute petitioner's claim that

Petitioner and Lt. Col. Frankhauser failed to

no summons was ever issued and served on her.

answer the complaint and to appear at the

They contend, however, that they sent notices of

hearings. They, likewise, failed to submit their

the hearings to her BUT as contended notices of

position paper, which the Labor Arbiter deemed a

hearing are not summonses. The provisions and

waiver on their part to do so. The case was

prevailing jurisprudence in Civil Procedure may be

therefore submitted for decision on the basis of

applied by analogy to NLRC proceedings (Revised

private respondents' position paper and supporting

Rules of the NLRC, Rule I, Sec. 3). It is basic that

documentswhich therefore on November 21, 1988,

the Labor Arbiter cannot acquire jurisdiction over

the Labor Arbiter rendered a decision granting all

the person of the respondent without the latter

the claims of private respondents. He found both

being served with summons (cf. Vda. de Macoy v.

Lt. Col. Frankhauser and petitioner "guilty of

Court of Appeals, 206 SCRA 244 [1992]; Filmerco

Commercial Co., Inc. v. Intermediate Appellate

future vacancy if shes available. Shauf accepted the offer.

Court, 149 SCRA 193 [1987]). In the absence of

During that time, Mrs. Mary Abalateos was about to vacate

service of summons or a valid waiver thereof, the

her position. But Mrs. Abalateos appointment was extended

hearings and judgment rendered by the Labor

thus, Shauf was never appointed to said position. She claims

Arbiter are null and void.

that the Abalateos stay was extended indefinitely to deny

Petitioner, in the case at bench, appealed to the

her the appointment as retaliation for the complaint that she

NLRC and participated in the oral argument before

filed against Persi. Persi denies this allegation. He claims it

the said body. This, however, does not constitute

was a joint decision of the management & it was in

a waiver of the lack of summons and a voluntary

accordance of with the applicable regulation.

submission of her person to the jurisdiction of the

Shauf filed for damages and other relief in different venues

Labor Arbiter. She may have raised in her

such as the Civil Service Commission, Appeals Review

pleadings grounds other than lack of jurisdiction,

Board, Philippine Regional Trial Court, etc.

but these grounds were discussed in relation to

RTC ruled in favor of Shauf ordering defendants to pay

and as a result of the issue of the lack of

$39,662.49 as actual damages + 20% of such amount as

jurisdiction. In effect, petitioner set forth only one

attorneys fees + P100k as moral & exemplary damages.

issue and that is the absence of jurisdiction over

Both parties appealed to the CA. Shauf prayed for the

her person. If an appearance before the NLRC is

increase of the damages to be collected from defendants.

precisely to question the jurisdiction of the said

Defendants on the other hand, continued using the defense

agency over the person of the defendant, then this

that they are immune from suit for acts done/statements

appearance is not equivalent to service of

made by them in performance of their official governmental

summons (De los Santos v. Montera, 221 SCRA

functions pursuant to RP-US Military Bases Agreement of

15 [1993]).

1947. They claim that the Philippines does not have

Be that as it may, on the assumption that

jurisdiction over the case because it was under the exclusive

petitioner validly waived service of summons on

jurisdiction of a US District Court. They likewise claim that

her, still the case could not prosper. There is no

petitioner failed to exhaust all administrative remedies thus

allegation from the pleadings filed that Lt. Col.

case should be dismissed. CA reversed RTC decision.

Frankhauser and petitioner were being sued in

According to the CA, defendants are immune from suit.

their personal capacities for tortious acts (United

Shauf claims that the respondents are being sued in their

States of America v. Guinto, 182 SCRA 644

private capacity thus this is not a suit against the US

[1990]). However, private respondents named 3

government w/c would require consent.

AGS as one of the respondents in their complaint.

Respondents still maintain their immunity from suit. They

Indeed, assuming that jurisdiction was acquired

further claim that the rule allowing suits against public

over the United States Government and the

officers & employees for criminal & unauthorized acts is

monetary claims of private respondents proved,

applicable only in the Philippines & is not part of international

such awards will have to be satisfied not by Lt.

law.

Col. Frankhauser and petitioner in their personal

ISSUE:

capacities, but by the United States government

WON private respondents are immune from suit being

(Sandres v. Veridiano II, 162 SCRA 88 [1988]).

officers of the US Armed Forces


HELD:

Shauf v. CA 191 SCRA 713

Respondents ordered, jointly and severally, to pay

SHAUF vs. COURT OF APPEALS

petitioners the sum of P100K as moral damages, P20K for

Petition for certiorari to review the decision of CA

attys fees.
RATIO:

FACTS:

No, the respondents cannot rely on the US blanket of


diplomatic immunity for all its acts or the acts of its agents in

1990: Petitioner, Loida Shauf, a Filipino by origin and

the Phils. Private respondents are personally liable in

married to an American who is a member of the US Air

indemnifying petitioner Shauf.

Force, was rejected for a position of Guidance Counselor in


the Base Education Office at Clark Air Base. She boasts of

While the doctrine of immunity is also applicable to

related working experience and being a qualified dependent

complaints filed against state officials, it only contemplates

locally available.

acts done in their official capacity. This does not cover acts

By reason of her non-selection, she filed a complaint for

contrary to law & injurious to the rights of the plaintiff. When

damages and an equal employment opportunity complaint

an official acts in a manner that invades or violates the

against private respondents, Don Detwiler (civillian

personal & property rights of another, the aggrieved party

personnel officer) and Anthony Persi (Education Director),

may sue the official & such suit will not be a suit against the

for alleged discrimination by reason of her sex (female),

state. (Director of the Bureau of Telecommunications vs.

color (brown) and national origin (Filipino by birth).

Aligaen) The doctrine of immunity from suit will not apply

Shauf was offered a temporary position as a temporary

where the public official is being sued in his private &

Assistant Education Adviser for a 180-day period with the

personal capacity as an ordinary citizen.

condition that if a vacancy occurs, she will be automatically


selected to fill the vacancy. But if no vacancy occurs after

The discrimination is very evident. Shauf was not considered

180 days, she will be released but will be selected to fill a

for the position even if she was previously employed as a

Guidance Counselor at the Clark Airbase. She was not

capacity is not enough to protest such official from

granted an interview. The person appointed was not even

liability for acts done without or in excess of his

qualified for that position and that person kept the position

authority.

despite orders from the US Civil Service Commission for his


removal. Extension of Abalateos services is another proof.

Issues:

Whether or not private respondents' complaint

She was not appointed even if US officials found her highly

against petitioner Lansang, as Chairman of NPDC,

qualified for the position (letters from the Director of the US

is in effect a suit against the state which cannot be

Civil Service Commission, Staff Judge Advocate of the

sued without its consent.

Department of Air Force). Shauf has proven that

discrimination did occur whereas respondents merely denied

Whether or not petitioner Lansang abused his


authority in ordering the ejectment of private

allegations.

respondents from Rizal Park.


Held:

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

No, the complaint is not a suit against the state.

No, Lansang did not abuse his authority.

Ratio:

The doctrine of state immunity from suit applies to

should be accountable. Though Shauf is entitled to

complaints filed against public officials for acts

damages, she should not be paid for the supposedly

done in the performance of their duties. The rule is

unearned income had she been hired as a Guidance

that the suit must be regarded as one against the

Counselor. She never acquired rights over that amount

state where satisfaction of the judgment against

because she was never appointed.

the public official concerned will require the state


itself to perform a positive act.

Shauf followed the proper procedure in seeking relief for the

Lansang was sued not in his capacity as

defendants discriminatory acts. The Department of Air Force

NPDC Chairman but in his personal

in Washington told her that one of her appeal rights would be

capacity. It is evident from the complaint

to file a civil action if a final decision has not been rendered

that Lansang was sued allegedly for

after 180 days from the dated of the initial appeal to the

having personal motives in ordering the

Commission. The appeal was lodged on Sept. 30, 1978 and

ejectment of GABI from Rizal Park.

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.
Lansang vs. Court of Appeals (Consti1)
February 23, 2000
Facts:

Private respondent General Assembly of the Blind


(GABI) were allegedly awarded a verbal contract
of lease in Rizal Park by the National Parks
Development Committee (NPDC). However, this
verbal contract accommodation was unclear
because there was no document or instrument
involved.

With the change of government, the new


Chairman of NPDC, petitioner Amado J. Lansang,
sought to clean up Rizal Park and terminated the
said verbal agreement with GABI and demanded
that they vacate the area.

The notice was signed by the president of GABI,


private respondent Jose Iglesias, allegedly to
indicate his conformity to its contents but later on
claimed that he was deceived into signing the
notice.

On the day of the supposed eviction, GABI filed an


action for damages and injunction in the RTC
against the petitioner but it was dismissed, ruling
that the complaint was actually directed against
the state which could not be sued without its
consent.

On appeal, the Court of Appeals reversed the


decision of the trial court and ruled that a
government official being sued in his official

There was no evidence of abuse of authority.

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