Liability of the State for acts of special agents In the case at bar, the ambulance driver was not

lance driver was not a special agent nor was a

Political Law – Non-Suability of the State – Waiver of Non-Suability is Not government officer acting as a special agent hence, there can be no liability
Admission of Liability from the government. “The Government does not undertake to guarantee to
any person the fidelity of the officers or agents whom it employs, since that
The facts of the case took place in the 1910’s. E. Merritt was a constructor
would involve it in all its operations in endless embarrassments, difficulties
who was excellent at his work. One day, while he was riding his motorcycle
and losses, which would be subversive of the public interest.”
along Calle Padre Faura, he was bumped by a government ambulance. The
driver of the ambulance was proven to have been negligent. Because of the
incident, Merritt was hospitalized and he was severely injured beyond
Republic v Purisima
rehabilitation so much so that he could never perform his job the way he used
to and that he cannot even earn at least half of what he used to earn. Facts: A motion to dismiss was filed on September 7, 1972 by defendant
Rice and Corn Administration in a pending civil suit in the sala of respondent
In order for Merritt to recover damages, he sought to sue the government
Judge for the collection of a money claim arising from an alleged breach of
which later authorized Merritt to sue the government by virtue of Act 2457
contract, the plaintiff being private respondent Yellow Ball Freight Lines,
enacted by the legislature (An Act authorizing E. Merritt to bring suit against
Inc. At that time, the leading case of Mobil Philippines Exploration,Inc. v.
the Government of the Philippine Islands and authorizing the Attorney-
Customs Arrastre Service where Justice Bengzon stressed the lack of
General of said Islands to appear in said suit). The lower court then
jurisdiction of a court to pass on the merits of a claim against any office or
determined the amount of damages and ordered the government to pay the
entity acting as part of the machinery of the national government unless
same.
consent be shown, had been applied in 53 other decisions. Respondent Judge
ISSUE: Whether or not the government is liable for the negligent act of the Amante P. Purisima of the Court of First Instance of Manila denied the
driver of the ambulance. motion to dismiss dated October 4, 1972. Hence, the petition for certiorari
and prohibition.
HELD: No. By consenting to be sued a state simply waives its immunity
from suit. It does not thereby concede its liability to plaintiff, or create any
cause of action in his favor, or extend its liability to any cause not previously
ISSUE: WON the respondent’s decision is valid
recognized. It merely gives a remedy to enforce a preexisting liability and
submits itself to the jurisdiction of the court, subject to its right to interpose
HELD: The position of the Republic has been fortified with the explicit
any lawful defense. It follows therefrom that the state, by virtue of such
affirmation found in this provision of the present Constitution: "The State
provisions of law, is not responsible for the damages suffered by private
may not be sued without its consent.""The doctrine of non-suability
individuals in consequence of acts performed by its employees in the
recognized in this jurisdiction even prior to the effectivity of the [1935]
discharge of the functions pertaining to their office, because neither fault nor
Constitution is a logical corollary of the positivist concept of law which, to
even negligence can be presumed on the part of the state in the organization
para-phrase Holmes, negates the assertion of any legal right as against the
of branches of public service and in the appointment of its agents. The State
state, in itself the source of the law on which such a right may be predicated.
can only be liable if it acts through a special agent (and a special agent, in the
Nor is this all, even if such a principle does give rise to problems,
sense in which these words are employed, is one who receives a definite and
considering the vastly expanded role of government enabling it to engage in
fixed order or commission, foreign to the exercise of the duties of his office
business pursuits to promote the general welfare, it is not obeisance to the
if he is a special official) so that in representation of the state and being
analytical school of thought alone that calls for its continued applicability.
bound to act as an agent thereof, he executes the trust confided to him.
Nor is injustice thereby cause private parties. They could still proceed to seek
collection of their money claims by pursuing the statutory remedy of having
the Auditor General pass upon them subject to appeal to judicial tribunals for
final adjudication. We could thus correctly conclude as we did in the cited
Providence Washington Insurance decision: "Thus the doctrine of non-
suability of the government without its consent, as it has operated in practice,
hardly lends itself to the charge that it could be the fruitful parent of injustice,
considering the vast and ever-widening scope of state activities at present
being undertaken. Whatever difficulties for private claimants may still exist,
is, from an objective appraisal of all factors, minimal. In the balancing of
interests, so unavoidable in the determination of what principles must prevail
if government is to satisfy the public weal, the verdict must be, as it has been
these so many years, for its continuing recognition as a fundamental
postulate of constitutional law." [
Switzerland General Insurance Co.,Ltd. v. Republic of the Philippines]
***The consent, to be effective, must come from the State acting through a
duly enacted statute as pointed out by Justice Bengzon in Mobil. Thus,
whatever counsel for defendant Rice and Corn Administration agreed to had
no binding force on the government.
USA vs Guinto
Doctrine of incorporation; Doctrine of Immunity from Suit
G.R. No. 76607 182 SCRA 644 February 26, 1990
Facts: The case involves the doctrine of state immunity. The United States of
America was not impleaded in the case at bar but has moved to dismiss on
the ground that they are in effect suits against it to which it has not
consented.
The private respondents are suing several officers of the US Air Force in
Clark Air Base in connection with the bidding conducted by them for
contracts for barber services in the said base. Among those who submitted
their bids were private respondents Roberto T. Valencia, Emerenciana C.
Tanglao, and Pablo C. del Pilar.
The Bidding was won by Ramon Dizon over the objection of the private
respondents who claimed that he had made a bid for 4 facilities, including the
Civil Engineering Area which was not included in the invitation to bid.
The private respondents filed a complaint in the court below to compel
Philippine Area Exchange (PHAX) and the individual petitioners to cancel
the award to Dizon, to conduct a rebidding for the barbershop concessions
and to allow the private respondents by a writ of preliminary injunction to
continue operating the concessions pending litigation.
The petitioners filed a motion to dismiss and opposition to the petition for
preliminary injunction on the ground that the action was in effect a suit
against USA which had not waived its non-suability, but trial court denied
the application for a writ of preliminary injunction.
Issues:
1. Whether or not the action was in effect a suit against United States of
America.
2. Whether or not the petitioners were immune from suit under the RP-US
Bases Treaty for acts done by them in the performance of their official
duties.
Discussions:
The rule that a state may not be sued without its consent, is one of the
generally accepted principles of international law that we have adopted as
part of the law of our land.
Even without such affirmation, we would still be bound by the generally
accepted principles of international law under the doctrine of incorporation.
Under this doctrine, as accepted by the majority of states, such principles are
deemed incorporated in the law of every civilized state as a condition and
consequence of its membership in the society of nations. Upon its admission
to such society, the state is automatically obligated to comply with these
principles in its relations with other states.
While the doctrine appears to prohibit only suits against the state without its
consent, it is also applicable to complaints filed against officials of the states
for acts allegedly performed by them in the discharge of their duties. The rule
is that if the judgment against such officials will require the state itself to
perform an affirmative act to satisfy the same, the suit must be regarded as
against the state although it has not been formally impleaded. When the
government enters into a contract, it is deemed to have descended to the level
of the other contracting party and divested of its sovereign immunity from
suit with its implied consent.
Rulings:
1. The court finds the barbershops subject to the concessions granted by
the US government to be commercial enterprises operated by private
persons. They are not agencies of the United States Armed Forces nor
are their facilities demandable as a matter of right by the American
servicemen. These establishments provide for the grooming needs of
their customers. This being the case, the petitioners cannot plead any
immunity from the complaint filed by the private respondents in the
court below.
2. Petitioners states they have acted in the discharge of their official
functions as officers or agents of the United States. They are sought to
be held answerable for personal torts in which the United States itself is
not involved. If found liable, they and they alone must satisfy the
judgment.
The Court would have directly resolved the claims against the defendants,
except for the paucity of the record in the case at hand. The evidence of the
alleged irregularity in the grant of the barbershop concessions is not before
the Court. The respondent court will have to receive that evidence first, so it
can later determine on the basis thereof if the plaintiffs are entitled to the
relief they seek. Accordingly, this case must also be remanded to the court
below for further proceedings.
Petitioner: The Holy See
Respondent: Hon. Elidberto Rosario, Jr., in his capacity as Presiding
Judge of RTC Makati, Branch 61 and Starbright Sales Enterprises, Inc.
FACTS: Petition arose from a controversy over a parcel of land. Lot 5-A,
registered under the name Holy See, was contiguous to Lot 5-B and 5-D
under the name of Philippine Realty Corporation (PRC). The land was
donated by the Archdiocese of Manila to the Papal Nuncio, which represents
the Holy See, who exercises sovereignty over the Vatican City, Rome, Italy,
for his residence.
Said lots were sold through an agent to Ramon Licup who assigned his rights
to respondents Starbright Sales Enterprises, Inc.
When the squatters refuse to vacate the lots, a dispute arose between the two
parties because both were unsure whose responsibility was it to evict the
squatters from said lots. Respondent Starbright Sales Enterprises Inc. insists
that Holy See should clear the property while Holy See says that respondent
corporation should do it or the earnest money will be returned. With this,
Msgr. Cirilios, the agent, subsequently returned the P100,000 earnest money.
The same lots were then sold to Tropicana Properties and Development
Corporation.
Starbright Sales Enterprises, Inc. filed a suit for annulment of the sale,
specific performance and damages against Msgr. Cirilios, PRC as well as
Tropicana Properties and Development Corporation. The Holy See and Msgr.
Cirilos moved to dismiss the petition for lack of jurisdiction based on
sovereign immunity from suit. RTC denied the motion on ground that
petitioner already "shed off" its sovereign immunity by entering into a
business contract. The subsequent Motion for Reconsideration was also
denied hence this special civil action for certiorari was forwarded to the
Supreme Court.
ISSUE: Whether or not Holy See can invoke sovereign immunity.
HELD: The Court held that Holy See may properly invoke sovereign
immunity for its non-suability. As expressed in Sec. 2 Art II of the 1987
Constitution, generally accepted principles of International Law are adopted
by our Courts and thus shall form part of the laws of the land as a condition
and consequence of our admission in the society of nations.
It was noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic
Relations that diplomatic envoy shall be granted immunity from civil and
administrative jurisdiction of the receiving state over any real action relating
to private immovable property. The Department of Foreign Affairs (DFA)
certified that the Embassy of the Holy See is a duly accredited diplomatic
missionary to the Republic of the Philippines and is thus exempted from
local jurisdiction and is entitled to the immunity rights of a diplomatic
mission or embassy in this Court.
Furthermore, it shall be understood that in the case at bar, the petitioner has
bought and sold lands in the ordinary course of real estate business, surely,
the said transaction can be categorized as an act jure gestionis. However,
petitioner has denied that the acquisition and subsequent disposal of the lot
were made for profit but claimed that it acquired said property for the site of
its mission or the Apostolic Nunciature in the Philippines.
The Holy See is immune from suit because the act of selling the lot of
concern is non-propriety in nature. The lot was acquired through a donation
from the Archdiocese of Manila, not for a commercial purpose, but for the
use of petitioner to construct the official place of residence of the Papal
Nuncio thereof. The transfer of the property and its subsequent disposal are
likewise clothed with a governmental (non-proprietal) character as petitioner
sold the lot not for profit or gain rather because it merely cannot evict the
squatters living in said property.
In view of the foregoing, the petition is hereby GRANTED and the
complaints were dismissed accordingly.
Froilan vs Pan Oriental Shipping waiver of sovereign immunity
Facts: Plaintiff, Fernando Froilan filed a complaint against the defendant-
appellant, Pan Oriental Shipping Co., alleging that he purchased from the
Shipping Commission the vessel for P200,000, paying P50,000 down and
agreeing to pay the balance in instalments. To secure the payment of the
balance of the purchase price, he executed a chattel mortgage of said vessel
in favor of the Shipping Commission. For various reasons, among them the
non-payment of the installments, the Shipping Commission tool possession
of said vessel and considered the contract of sale cancelled. The Shipping
Commission chartered and delivered said vessel to the defendant-appellant
Pan Oriental Shipping Co. subject to the approval of the President of the
Philippines. Plaintiff appealed the action of the Shipping Commission to the
President of the Philippines and, in its meeting the Cabinet restored him to all
his rights under his original contract with the Shipping Commission. Plaintiff
had repeatedly demanded from the Pan Oriental Shipping Co. the possession
of the vessel in question but the latter refused to do so.
Plaintiff, prayed that, upon the approval of the bond accompanying his
complaint, a writ of replevin be issued for the seizure of said vessel with all
its equipment and appurtenances, and that after hearing, he be adjudged to
have the rightful possession thereof . The lower court issued the writ of
replevin prayed for by Froilan and by virtue thereof the Pan Oriental
Shipping Co. was divested of its possession of said vessel.
Pan Oriental protested to this restoration of Plaintiff ‘s rights under the
contract of sale, for the reason that when the vessel was delivered to it, the
Shipping Administration had authority to dispose of said authority to the
property, Plaintiff having already relinquished whatever rights he may have
thereon. Plaintiff paid the required cash of P10,000.00 and as Pan Oriental
refused to surrender possession of the vessel, he filed an action to recover
possession thereof and have him declared the rightful owner of said property.
The Republic of the Philippines was allowed to intervene in said civil case
praying for the possession of the in order that the chattel mortgage
constituted thereon may be foreclosed.
Issues: Whether or not the Court has jurisdiction over the intervenor with
regard to the counterclaim.
Discussions: When the government enters into a contract, for the State is
then deem to have divested itself of the mantle of sovereign immunity and
descended to the level of the ordinary individual. Having done so, it becomes
subject to judicial action and processes.
Rulings: Yes. The Supreme Court held that the government impliedly
allowed itself to be sued when it filed a complaint in intervention for the
purpose of asserting claim for affirmative relief against the plaintiff to the
recovery of the vessel. The immunity of the state from suits does not deprive
it of the right to sue private parties in its own courts. The state as plaintiff
may avail itself of the different forms of actions open to private litigants. In
short, by taking the initiative in an action against a private party, the state
surrenders its privileged position and comes down to the level of the
defendant. The latter automatically acquires, within certain limits, the right to
set up whatever claims and other defenses he might have against the state.
REPUBLIC VS VILLASOR government funds are not subject to
garnishment
G.R. No. L-30671 54 SCRA 83 November 28, 1973
Facts: The case was filed by the Republic of the Philippines requesting to
nullify the ruling of The Court of First Instance in Cebu in garnishing the
public funds allocated for the Arm Forces of the Philippines.
A decision was rendered in Special Proceedings in favor of respondents P. J.
Kiener Co., Ltd., Gavino Unchuan, and International Construction
Corporation, and against the petitioner herein, confirming the arbitration
award in the amount of P1,712,396.40, subject of Special Proceedings. The
respondent Honorable Guillermo P. Villasor, issued an Order declaring the
said decision final and executory, directing the Sheriffs of Rizal Province,
Quezon City and Manila to execute the said decision. The corresponding
Alia Writ of Execution was issued. On the strength of the aforementioned
Alias Writ of Execution, the Provincial Sheriff of Rizal served Notices of
Garnishment with several Banks. The funds of the Armed Forces of the
Philippines on deposit with Philippine Veterans Bank and PNB are public
funds duly appropriated and allocated for the payment of pensions of retirees,
pay and allowances of military and civilian personnel and for maintenance
and operations of the AFP.
Petitioner, filed prohibition proceedings against respondent Judge Villasor
for acting in excess of jurisdiction with grave abuse of discretion amounting
to lack of jurisdiction in granting the issuance of a Writ of Execution against
the properties of the AFP, hence the notices and garnishment are null and
void.
Issues:
Whether or not the state can be sued without its consent.
Whether or not the notice of garnishment issued by Judge Villasor is valid.
Discussions:
The provision of Sec 3 Article XVI declares that “the State may not be sued
without its consent”. This provision is merely a recognition of the sovereign
character of the State and express an affirmation of the unwritten rule
insulating it from the jurisdiction of the courts of justice. Another
justification is the practical consideration that the demands and
inconveniences of litigation will divert time and resources of the State from
the more pressing matters demanding its attention, to the prejudice of the
public welfare.
As a general rule, whether the money is deposited by way of general or
special deposit, they remain government funds and are not subject to
garnishment. An exception of the rule is a law or ordinance that has been
enacted appropriating a specific amount to pay a valid government
obligation.
Rulings: It is a fundamental postulate of constitutionalism flowing from the
juristic concept of sovereignty that the state as well as its government is
immune from suit unless it gives its consent. A sovereign is exempt from
suit, not because of any formal conception or obsolete theory, but on the
logical and practical ground that there can be no legal right as against the
authority that makes the law on which the right depends. A continued
adherence to the doctrine of non-suability is not to be deplored for as against
the inconvenience that may cause private parties, the loss of government
efficiency and the obstacle to the performance of its multifarious functions
are far greater is such a fundamental principle were abandoned and the
availability of judicial remedy were not thus restricted.
What was done by respondent Judge is not in conformity with the dictates of
the Constitution. From a logical and sound sense from the basic concept of
the non-suability of the State, public funds cannot be the object of a
garnishment proceeding even if the consent to be sued had been previously
granted and the state liability adjudged. Disbursements of public funds must
be covered by the corresponding appropriation as required by law. The
functions and public services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds from their legitimate
and specific objects, as appropriated by law.
Philippine National Bank vs Judge Javier Pabalan83 SCRA 595 –
Political Law – Constitutional Law – Immunity of the State from Suit
FACTS: On December 17, 1970, Judge Javier Pabalan issued a writ of
execution followed thereafter by a notice of garnishment on the funds of
Philippine Virginia Tobacco Administration (PVTA) in the sum of
P12,724.66 deposited with the Philippine National Bank in La Union. PNB
La Union filed an administrative complaint against Pabalan for grave abuse
of discretion, alleging that the latter failed to recognize that the questioned
funds are of public character and therefore may not be garnished, attached,
nor may be levied upon. The PNB La Union Branch invoked the doctrine of
non suability, putting a bar on the notice of garnishment.
ISSUE: Whether or not PNB may be sued.
HELD: Yes. Funds of public corporations which can sue and be sued are not
exempt from garnishment. PVTA is also a public corporation with the same
attributes, a similar outcome is attributed. The government has entered with
them into a commercial business hence it has abandoned its sovereign
capacity and has stepped down to the level of a corporation. Therefore, it is
subject to rules governing ordinary corporations and in effect can be sued.
Therefore, the petition of PNB La Union is denied.
PVTA is also a public corporation with the same attributes, a similar
outcome is attributed. The government has entered with them into a
commercial business hence it has abandoned its sovereign capacity and has
stepped down to the level of a corporation. Therefore, it is subject to rules
governing ordinary corporations and in effect can be sued. Therefore, the
petition of PNB La Union is denied.
The Supreme Court ruled that the funds held by PNB is subject for
garnishment. Funds of public corporations which can sue and be sued are
not exempt from garnishment. Thus, the writ of execution be imposed
immediately.
Discussions: The consent of the state to be sued may be given expressly or
impliedly. In this case, Consent to be sued was given impliedly when the
State enters into a commercial contract. When the State enters into a contract,
the State is deemed to have divested itself of the mantle of sovereign
immunity and descended to the level of the ordinary individual. Hence,
Funds of public corporations could properly be made the object of a notice of
garnishment.
ARCEGA vs. COURT OF APPEALS
ALICIA O. ARCEGA, assisted by her husband RAF. L. ARCEGA, doing
business under the firm name of “FAIRMONT ICE CREAM CO.,”
petitioner,
Vs. THE COURT OF APPEALS, THE CENTRAL BANK OF THE
PHILIPPINES, and THE PHILIPPINE NATIONAL BANK, respondents.
Facts:
The petitioner Alicia O. Arcega, doing business under the firm name
“Fairmont Ice Cream Company,” filed a complaint with the Court of First
Instance of Manila,
Branch I, against the respondents Central Bank of the Philippines and
Philippine National Bank, for the refund from allegedly unauthorized
payments made by her in the concept of the 17% special excise tax on
foreign exchange. The refund prayed for involves purchases of foreign
exchange from the Philippine National Bank to cover the costs and
transportation and other charges incident to the importation into the
Philippines. The Central Bank moved to dismiss the complaint on the
grounds, among others, that the trial court has no jurisdiction over the
subject-matter of the action, because the judgment sought will constitute a
financial charge against the Government, and therefore the suit is one against
the Government, which cannot prosper without its consent, and in this case
no such consent has been given. The petitioner Arcega filed a motion for
reconsideration of the resolution to which an opposition was filed by the
Central Bank. Then, the Central Bank’s Chief Accountant submitted a
certification that the balance of the collected special excise tax on sales of
foreign exchange was turned over to the Treasurer of the Philippines.
The court denied the petitioner’s motion for reconsideration. As a result,
Arcega appealed to the Court of Appeals. Holding that the suit is indirectly
against the Republic of the Philippines, which cannot be sued without its
consent, the Court of Appeals affirmed the dismissal of the complaint. The
petitioner interposed the present appeal by certiorari.
Issue: Whether a suit against the Central Bank a suit against the State.
Held: The suit is brought against the Central Bank of the Philippines, an
entity authorized by its charter to sue and be sued. The consent of the State to
thus be sued, therefore, has been given.
GAUDENCIO RAYO vs. COURT OF FIRST INSTANCE OF
BULACAN G.R. No. L-55273-83 December 19, 1981
FACTS: At the height of the infamous typhoon "Kading", the respondent
opened simultaneously all the three floodgates of the Angat Dam which
resulted in a sudden, precipitate and simultaneous opening of said floodgates
several towns in Bulacan were inundated. The petitioners filed for damages
against the respondent corporation.
Petitioners opposed the prayer of the respondents forn dismissal of the case
and contended that the respondent corporation is merely performing a
propriety functions and that under its own organic act, it can sue and be sued
in court.
ISSUE: W/N the respondent performs governmental functions with respect to
the management and operation of the Angat Dam.
W/N the power of the respondent to sue and be sued under its organic charter
includes the power to be sued for tort.
HELD: The government has organized a private corporation, put money in it
and has allowed it to sue and be sued in any court under its charter.
As a government owned and controlled corporation, it has a personality of its
own, distinct and separate from that of the government. Moreover, the
charter provision that it can sue and be sued in any court.
PNR v IAC
[FACTS]
1. That plaintiff was passing thru the town of Calumpit Bulacan, temporarily
while the bridge at Hagonoy, Bulacan was under construction;
2. That defendant Philippine National Railways is a purely government
owned and regularly passes along the intersection of Barrio Balungao,
Calumpit, Bulacan, in going to San Fernando, La Union from Manila and
return;
3. That on August 10, 1974, at about 1:20 o'clock in the afternoon, Passenger
train No. 73 hit and bumped the right mid portion of the plaintiff's passenger
bus No. 1066, while the rear portion of said bus was at the railroad track and
its direction was towards Hagonoy, Bulacan at about 1:30 o'clock in the
afternoon;
4. That at the time of the collision there was a slight rainfall in the vicinity of
the scene of the accident and that there was at said intersection no bar,
semaphores, and signal lights that would warn the public of the approaching
train.
5. That on account of said collision, the Baliuag Transit Bus with Body No.
1066 driven by Romeo Hughes was damaged and eighteen (18) of its
passengers died and the rest who were more than fifty three (53) passengers
suffered physical injuries;
[ISSUES]
1. Who between the driver Romeo Hughes of the Baliuag Transit
Incorporated and Honorio Cabardo, train Engineer of the Philippine National
Railways was negligent in the operation of their respective vehicles, or
whether or both were negligent?
2. Could either of the companies Baliuag Transit Incorporated and the
Philippine National Railways be held accountable for the collision because of
negligence?
[RULING]
The instant case the State divested itself of its sovereign capacity when it
organized the PNR which is no different from its predecessor, the Manila
Railroad Company. The PNR did not become immune from suit. It did not
remove itself from the operation of Articles 1732 to 1766 of the Civil Code
on common carriers.
The correct rule is that "not all government entities, whether corporate or
noncorporate, are immune from suits. Immunity from suit is determined by
the character of the objects for which the entity was organized."
When it is apparent, or when in the exercise of reasonable diligence
commensurate with the surroundings it should be apparent, to the company
that a person on its track or to get on its track is unaware of his danger or
cannot get out of the way, it becomes the duty of the company to use such
precautions, by warnings, applying brakes, or otherwise, as may be
reasonably necessary to avoid injury to him.
What exacerbates against petitioners' contention is the authority in this
jurisdiction to the effect that the failure of a railroad company to install a
semaphore or at the very least, to post a flagman or watchman to warn the
public of the passing train amounts to negligence
 Whether or not the Civil Aeronautics Administration should be
regarded as engaged in private functions and therefore subject to suit.
National Airports Corp vs Teodoro waiver of sovereign immunity
Discussions:
Facts:
Not all government entities, whether corporate or non corporate, are
The National Airports Corporation was organized under Republic Act
immune from suits. The power to sue and be sued is implied from the
No. 224, which expressly made the provisions of the Corporation Law
power to transact private business. And if it has the power to sue and
applicable to the said corporation. It was abolished by Executive Order
be sued on its behalf, the Civil Aeronautics Administration with
No. 365 and to take its place the Civil Aeronautics Administration was
greater reason should have the power to prosecute and defend suits for
created.
and against the National Airports Corporation, having acquired all the
properties, funds and choses in action and assumed all the liabilities of
Before the abolition, the Philippine Airlines, Inc. paid to the National
the latter. The rule is thus stated in Corpus Juris:
Airports Corporation P65,245 as fees for landing and parking for the
Suits against state agencies with relation to matters in which they have
period up to and including July 31, 1948. These fees are said to have
assumed to act in private or nongovernment capacity, and various suits
been due and payable to the Capitol Subdivision, Inc., who owned the
against certain corporations created by the state for public purposes,
land used by the National Airports Corporation as airport. The owner
but to engage in matters partaking more of the nature of ordinary
commenced an action in the court against the Philippine Airlines, Inc.
business rather than functions of a governmental or political character,
are not regarded as suits against the state. The Latter is true, although
The Philippine Airlines, Inc. countered with a third-party complaint
the state may own stock or property of such a corporation for by
against the National Airports Corporation, which by that time had been
engaging in business operations through a corporation the state divests
dissolved, and served summons on the Civil Aeronautics
itself so far of its sovereign character, and by implication consents to
Administration. The third party plaintiff alleged that it had paid to the
suits against the corporation.
National Airports Corporation the fees claimed by the Capitol
Subdivision, Inc. “on the belief and assumption that the third party
Rulings: Yes. The Supreme Court ruled that the Civil Aeronautics
defendant was the lessee of the lands subject of the complaint and that
Administration comes under the category of a private entity. Although
the third party defendant and its predecessors in interest were the
not a body corporate it was created, like the National Airports
operators and maintainers of said airport and, further, that the third
Corporation, not to maintain a necessary function of government, but
party defendant would pay to the landowners, particularly the Capitol
to run what is essentially a business, even if revenues be not its prime
Subdivision, Inc., the reasonable rentals for the use of their lands.”
objective but rather the promotion of travel and the convenience of the
The Solicitor General, after answering the third party complaint, filed
traveling public. It is engaged in an enterprise which, far from being
a motion to dismiss on the ground that the court lacks jurisdiction to
the exclusive prerogative of state, may, more than the construction of
entertain the third- party complaint, first, because the National
public roads, be undertaken by private concerns.
Airports Corporation “has lost its juridical personality,” and, second,
because agency of the Republic of the Philippines, unincorporated and
In the light of a well-established precedents, and as a matter of simple
not possessing juridical personality under the law, is incapable of
justice to the parties who dealt with the National Airports Corporation
suing and being sued
on the faith of equality in the enforcement of their mutual
commitments, the Civil Aeronautics Administration may not, and
Issues:
should not, claim for itself the privileges and immunities of the
sovereign state.
BOP v BPEA, 1 SCRA, 340
Facts: BPEA (respondents) filed a complaint by an acting prosecutor of the
Industrial Court against petitioners BOP (secretary of Department of General
Services and Director of BOP). The complaint alleged that both the secretary
of DOG and the director of BOP have been engaging in unfair labor
practices. Answering the complaint, the petitioners (BOP), denied the
charges of unfair labor practices attributed to them and alleged that the
BPEA complainants were suspended pending result of administrative
investigation against them for breach of Civil Service rules and regulations;
that the BOP is not an industrial concern engaged for the purpose of gain but
of the republic performing governmental functions. For relief, they prayed
that the case be dismissed for lack of jurisdiction. But later on January 27,
1959, the trial judge of Industrial Court sustained the jurisdiction of the court
on the theory that the functions of the BOP are “exclusively proprietary in
nature,” since they receives outside jobs and that many of its employees are
paid for overtime work on regular working days and holidays, therefore
consequently denied the prayed for dismissal, which brought the petitioners
(BOP) to present petition for certiorari and prohibition.
Issue: Whether or not the BOP can be sued.
Held: As an office of the Government, without any corporate or juridical
personality, the BOP cannot be sued (Sec.1, Rule 33, Rules of court).
It is true that BOP receives outside jobs and that many of its employees are
paid for overtime work on regular working days and holidays, but these facts
do not justify the conclusion that its functions are “exclusively proprietary in
nature”. Overtime work in the BOP is done only when the interest of the
service so requires. As a matter of administrative policy, the overtime
compensation may be paid, but such payment is discretionary with the head
of the Bureau depending upon its current appropriations, so that it cannot be
the basis for holding that the functions of said Bureau are wholly proprietary
in character.
Any suit, action or proceeding against it, if it were to produce any effect,
would actually be a suit, action or proceeding against the Government itself,
and the rule is settled that the Government cannot be sued without its
consent, much less over its jurisdiction.
Disposition: The petition for a writ of prohibition is granted. The orders
complained of are set aside and the complaint for unfair labor practice
against the petitioners is dismissed, with costs against respondents other than
the respondent court.
Immunity from Suit
MOBIL PHIL INC VS CUSTOM ARRASTRE SERVICE
G.R. No. L-23139 18 SCRA 1120 December 17, 1966
Facts: This case was filed by Mobil Phil Exploration Inc. against the
Customs Arrastre Service and the Bureau of Customs to recover the value of
the undelivered case of rotary drill parts.
Four cases of rotary drill parts were shipped from abroad, consigned to Mobil
Philippines Exploration, Inc. The shipment was discharged to the custody of
the Customs Arrastre Service, the unit of the Bureau of Customs then
handling arrastre operations therein. The Customs Arrastre Service later
delivered to the broker of the consignee three cases only of the shipment.
Mobil Philippines Exploration, Inc filed suit in the Court of First Instance of
Manila against the Customs Arrastre Service and the Bureau of Customs to
recover the value of the undelivered case plus other damages.
Defendants filed a motion to dismiss the complaint on the ground that not
being persons under the law, defendants cannot be sued. Appellant contends
that not all government entities are immune from suit; that defendant Bureau
of Customs as operator of the arrastre service at the Port of Manila, is
discharging proprietary functions and as such, can be sued by private
individuals.
Issues: Whether or not both Customs Arrastre Service and the Bureau of
Customs can invoke state immunity.
Discussions: The Bureau of Custom, is a part of Department of Finance. It
does not have a separate juridical personality of its own apart from that of the
national government. Its primary function is governmental, that of assessing
and collecting lawful revenues from imported articles and all other tariff and
customs duties, fees, charges, fines and penalties (Sec. 602, R.A. 1937). To
this function, arrastre service is a necessary incident. As stated in the law,
agencies of the government is not suable if it is performing governmental
functions and if it an unincorporated government entity without a separate
juridical personality.

Rulings: Yes. The Supreme Court ruled that the Bureau of Customs cannot
be sued for recovery of money and damages involving arrastre services,
considering that said arrastre function may be deemed proprietary, because it
is a necessary incident of the primary and governmental function of the
Bureau of Customs. The Court ruled that the fact that a non-corporate
government entity performs a function proprietary in nature does not
necessarily result in its being suable. If said non-governmental function is
undertaken as an incident to its governmental function, there is no waiver
thereby of the sovereign immunity from suit extended to such government
entity. The Supreme Court ruled that the plaintiff should have filed its
present claim to the General Auditing Office, it being for money under the
provisions of Commonwealth Act 327, which state the conditions under
which money claims against the Government may be filed.