Case No. 1: U.S.A. vs. Reyes, G.R. No.

79253, March 1, 1993

Related Principle/s:

1.
“the rule that a state may not be sued without its consent, now expressed in
Article XVI Section 3, of the 1987 Constitution, is one of the generally accepted
principles of international law that we have adopted as part of the law of our land under
Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in
the 1935 and 1973 Constitutions and also intended to manifest our resolve to abide by
the rules of the international community. 41

While the doctrine appears to prohibit only suits against the state without its
consent, it is also applicable to complaints filed against officials of the state for acts
allegedly performed by them in the discharge of their duties. The rule is that if the
judgment against such officials will require the state itself to perform an affirmative act
to satisfy the same, such as the appropriation of the amount needed to pay the
damages awarded against them, the suit must be regarded as against the state itself
although it has not been formally impleaded. 42 It must be noted, however, that the
rule is not so all-encompassing as to be applicable under all circumstances.

It is a different matter where the public official is made to account in his

capacity as such for acts contrary to law and injurious to the rights of plaintiff. As was
clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications, et
al. vs. Aligaen, etc., et al. 43 "Inasmuch as the State authorizes only legal acts by its
officers, unauthorized acts of government officials or officers are not acts of the State,
and an action against the officials or officers by one whose rights have been invaded or
violated by such acts, for the protection of his rights, is not a suit against the State
within the rule of immunity of the State from suit. In the same tenor, it has been said
that an action at law or suit in equity against a State officer or the director of a State
department on the ground that, while claiming to act or the State, he violates or invades
the personal and property rights of the plaintiff, under an unconstitutional act or under
an assumption of authority which he does not have, is not a suit against the State within
the constitutional provision that the State may not be sued without its consent." 44 The
rationale for this ruling is that the doctrinaire of state immunity cannot be used as an
instrument for perpetrating an injustice. “

2.
“The aforecited authorities are clear on the matter. They state that the doctrine
of immunity from suit will not apply and may not be invoked where the public official is
being sued in his private and personal capacity as an ordinary citizen. The cloak of
protection afforded the officers and agents of the government is removed the moment
they are sued in their individual capacity. This situation usually arises where the public
official acts without authority or in excess of the powers vested in him. It is a well-
settled principle of law that a public official may be liable in his personal private capacity
for whatever damage he may have caused by his act done with malice and in bad faith,
or beyond the scope of his authority or jurisdiction”
FACTS:

Private respondent, hereinafter referred to as Montoya, is an American citizen who, at the time material
to this case, was employed as an identification (I.D.) checker at the U.S. Navy Exchange (NEX) at the Joint
United States Military Assistance Group (JUSMAG) headquarters in Quezon City. Petitioner Maxine
Bradford, hereinafter referred to as Bradford, is likewise an American citizen who was the activity
exchange manager at the said JUSMAG Headquarters.

As a consequence of an incident which occurred on 22 January 1987 whereby the respondent was
searched on her body and belongings after she had bought some items from the retail store of the NEX
JUSMAG led to file a complaint against the petitioner. Such incident was narrated as follows:

Where the respondent was on her way to her car while already outside the store, Mrs. Yong Kennedy,
also an ID checker, upon the instruction of the store manager, Ms. Maxine Bradford(petitioner),
approached respondent and informed her that she needed to search her bags. The search was
thereafter made on the person, car and bags of the respondent by Mrs. Yong Kennedy in the presence
of the petitioner and numerous curious onlookers. Feeling aggrieved, petitioner checked the records
and discovered that she was the only one whose person and belonging was searched that day.
Respondent filed a complaint contending that illegal search on the her person and belongings in front of
many people has subjected the her to speculations of theft, shoplifting and such other wrongdoings and
has exposed her to contempt and ridicule which was caused her undue embarrassment and indignity
and the act could not have been motivated by other reason than racial discrimination in our own land,
the act constitute a blow to our national pride and dignity which has caused the respondent a feeling of
anger for which she suffers sleepless nights and wounded feelings.

Contention of petitioner together the public petitioner US States:

1. The JUSMAG is under the 1979 amendment of the Military Bases Agreement made it clear that
the United States shall have "the use of certain facilities and areas within the bases and shall
have effective command and control over such facilities and over United States personnel,
employees, equipment and material."

2. Defendant, Maxine Bradford, as manager of the US Navy Exchange Branch at JUSMAG, Quezon
City, is immune from suit for act(s) done by her in the performance of her official functions
under the Philippines-United States Military Assistance Agreement of 1947 and Military Bases
Agreement of 1947, as amended

In summary, petitioner argued that the place of the alleged commission of discriminating act
was in a certain facilities and areas where US have effective command and control and where
US also has command and control over personnel, employees, equipment and material and that
acts are done by the petitioner was made in the performance of her official functions under the
Philippines-United States Military Assistance Agreement of 1947 and Military Bases Agreement
of 1947, as amended. Therefore, such complaint filed against the petitioner is in effect a
complaint against the US which should not prosper in accordance with the state immunity from
suit.
ISSUE:

Whether the petitioner is covered by the state immunity from suit

RESOLUTION:

NO, petitioner is not covered by the state immunity from suit

The doctrine of immunity from suit will not apply and may not be invoked where the public official is
being sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded
the officers and agents of the government is removed the moment they are sued in their individual
capacity. This situation usually arises where the public official acts without authority or in excess of the
powers vested in him. It is a well-settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have caused by his act done with malice and in
bad faith, or beyond the scope of his authority or jurisdiction.

Since it is apparent from the complaint that Bradford was sued in her private or personal capacity for
acts allegedly done beyond the scope and even beyond her place of official functions, said complaint is
not then vulnerable to a motion to dismiss based on the grounds relied upon by the petitioners because
as a consequence of the hypothetical admission of the truth of the allegations therein, the case falls
within the exception to the doctrine of state immunity.

Case No. 2: The Holy See v. RTC, G.R. 101949, Dec. 1, 1994
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and
administrative jurisdiction of the receiving state over any real action relating to private immovable
property situated in the territory of the receiving state which the envoy holds on behalf of the sending
state for the purposes of the mission.

FACTS:
Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is
represented in the Philippines by the Papal Nuncio. Private respondent, Starbright Sales Enterprises,
Inc., is a domestic corporation engaged in the real estate business.
This petition arose from a controversy over a parcel of land consisting of 6,000 square meters located in
the Municipality of Parañaque, Metro Manila and registered in the name of petitioner.Said Lot 5-A is
contiguous to Lots 5-B and 5-D and registered in the name of the Philippine Realty Corporation (PRC).
The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to the
sellers. Later, Licup assigned his rights to the sale to private respondent.
In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose as to
who of the parties has the responsibility of evicting and clearing the land of squatters. Complicating the
relations of the parties was the sale by petitioner of Lot 5-A to Tropicana Properties and Development
Corporation (Tropicana).
Private respondent prayed for the annulment of the Deeds of Sale between petitioner and the PRC on
the one hand, and Tropicana on the other; the reconveyance of the lots in question; specific
performance of the agreement to sell between it and the owners of the lots; and damages.
Petitioner moved to dismiss the complaint for lack of jurisdiction based on sovereign immunity from
suit.
However, the trial court dismissed petitioner's motion after finding that petitioner "shed off its
sovereign immunity by entering into the business contract in question. 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 the Holy See can properly invoke sovereign immunity for its non-suability.

RULING:
Yes.
As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally accepted
principles of International Law.
 Section 2. The Philippines renounces war as an instrument of national policy, adopts the generally
accepted principles of international law as part of the law of the land and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity with all nations.
Even without this affirmation, such principles of International Law are deemed incorporated as part of
the law of the land as a condition and consequence of our admission in the society of nations.
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and
administrative jurisdiction of the receiving state over any real action relating to private immovable
property situated in the territory of the receiving state which the envoy holds on behalf of the sending
state for the purposes of the mission.
If this immunity is provided for a diplomatic envoy, with all the more reason should immunity be
recognized as regards the sovereign itself, which in this case is the Holy See.
The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a
governmental character.
Petitioner did not sell Lot 5-A for profit or gain.
It merely wanted to dispose off the same because the squatters living thereon made it almost impossible
for petitioner to use it for the purpose of the donation.
The fact that squatters have occupied and are still occupying the lot, and that they stubbornly refuse to
leave the premises, has been admitted by private respondent in its complaint 
The privilege of sovereign immunity in this case was sufficiently established by the Memorandum and
Certification of the Department of Foreign Affairs in which it officially certified that the Embassy of the
Holy See is a duly accredited diplomatic mission to the Republic of the Philippines exempt from local
jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in
this country.

Case No. 3: SEAFDEC v. NLRC, 241 SCRA 580

(state immunity: International agency enjoys immunity)

FACTS: On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate as a
probationary basis by the SEAFDEC-AQD and was appointed Senior External Affairs Officer on January 5,
1983 with a monthly basic salary of P8,000.00 and a monthly allowance of P4,000.00. Thereafter, he was
appointed to the position of Professional III and designated as Head of External Affairs Office with the
same pay and benefits.
SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries
Development Center, organized through an agreement entered into in Bangkok, Thailand on December
28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines
with Japan as the sponsoring country.

Petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to private
respondent informing him that due to the financial constraints being experienced by the department,
his services shall be terminated at the close of office hours on May 15, 1986 and that he is entitled to
separation benefits equivalent to one (1) month of his basic salary for every year of service plus other
benefits.
Upon petitioner SEAFDEC-AQD’s failure to pay private respondent his separation pay, the latter filed on
March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral
damages and attorney’s fees with the Arbitration Branch of the NLRC
Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the case
inasmuch as the SEAFDEC-AQD is an international organization and that private respondent must first
secure clearances from the proper departments for property or money accountability before any claim
for separation pay will be paid, and which clearances had not yet been obtained by the private
respondent.

LABOR ARBITER: ordered petitioner to pay the benefits claimed

NLRC: affirmed the LA.

PETITIONER CONTENDS that: SEAFDEC-AQD is immune from suit owing to its international character
and the complaint is in effect a suit against the State which cannot be maintained without its consent.

ISSUE: WON the petitioner is within the scope of application of Philippine labor laws (WON SEAFDEC is
immuned from suit)

HELD: Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-

AQD) is an international agency beyond the jurisdiction of public respondent NLRC.
Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional
independence and freedom from control of the state in whose territory its office is located.
In so far as they are autonomous and beyond the control of any one State, they have a distinct
juridical personality independent of the municipal law of the State where they are situated. As such,
according to one leading authority “they must be deemed to possess a species of international
personality of their own.” (Salonga and Yap, Public International Law, 83 [1956 ed.])
One of the basic immunities of an international organization is immunity from local
jurisdiction, i.e.,that it is immune from the legal writs and processes issued by the tribunals of the
country where it is found. The obvious reason for this is that the subjection of such an organization to
the authority of the local courts would afford a convenient medium thru which the host government
may interfere in their operations or even influence or control its policies and decisions of the
organization; besides, such subjection to local jurisdiction would impair the capacity of such body to
discharge its responsibilities impartially on behalf of its member-states.
WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the
courts or local agency of the Philippine government, the questioned decision and resolution of the NLRC
dated July 26, 1988 and January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for having
been rendered without jurisdiction.

Case No. 4: Callado v. IRRI, 244 SCRA 210

Doctrine:

It is a recognized principle of international law and under our system of separation of powers that
diplomatic immunity is essentially a political question and courts should refuse to look beyond a
determination by the executive branch of the government.

Facts:

Petitioner Ernesto Callado was employed as a driver at the International Rice Research Institute (IRRI).
One day while driving an IRRI vehicle on an official trip to the Ninoy Aquino International Airport and
back to the IRRI, petitioner figured in an accident. Petitioner was informed of the findings of a
preliminary investigation conducted by the IRRI's Human Resource Development Department Manager
in a Memorandum dated March 5, 1990 and filed charges against petitioner Callado.

Petitioner submitted his answer and defenses to the charges against him. After evaluating petitioner's
answer, explanations and other evidence by IRRI's Human Resource Development Department Manager,
the latter issued a Notice of Termination to petitioner.

Petitioner then filed a complaint before the Labor Arbiter for illegal dismissal, illegal suspension
and indemnity pay with moral and exemplary damages and attorney's fees. Private respondent IRRI
likewise informed the Labor Arbiter, that it enjoys immunity from legal process by virtue of Article 3
of Presidential Decree No. 1620, and that it invokes such diplomatic immunity and privileges as an
international organization in the instant case filed by petitioner, not having waived the same. The
Labor Arbiter ruled in favor of the petitioner. However, the NLRC set aside such, and the
complaint was dismissed. Hence, this petition.
Issue:

Whether or not the (IRRI) waive its immunity from suit in this dispute which arose from an employer-
employee relationship?

Ruling:

No. The IRRI did not waive its immunity from suit.The Supreme Court held that P.D. No. 1620, Article 3
provides: Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any penal, civil
and administrative proceedings, except insofar as that immunity has been expressly waived by the
Director-General of the Institute or his authorized representatives.

It is a recognized principle of international law and under our system of separation of powers that
diplomatic immunity is essentially a political question and courts should refuse to look beyond a
determination by the executive branch of the government, and where the plea of diplomatic immunity
is recognized and affirmed by the executive branch of the government as in the case at bar, it is then the
duty of the courts to accept the claim of immunity upon appropriate suggestion by the principal law
officer of the government . . . or other officer acting under his direction.

The grant of immunity to IRRI is clearly necessitated by their international character and respective
purposes. The objective is to avoid the danger of partiality and interference by the host country in their
internal workings. The exercise of jurisdiction by the Department of Labor in these instances would
defeat the very purpose of immunity, which is to shield the affairs of international organizations, in
accordance with international practice, from political pressure or control by the host country to the
prejudice of member States of the organization, and to ensure the unhampered the performance of
their functions.

The grant of immunity to IRRI is clear and unequivocal and an express waiver by its Director-General is
the only way by which it may relinquish or abandon this immunity. In cases involving dismissed
employees, the Institute may waive its immunity, signifying that such waiver is discretionary on its part.

Case No. 5: DFA v. NLRC, Sept. 18, 1996

Doctrines:
1. Diplomatic  immunity is essentially a political question and courts should refuse to look beyond
a determination by the executive branch of the government.
2. The mere entering into a contract by an entity (which has been granted immunity from suit)
with a private party does not immediately constitute waiver of immunity. If the act is in pursuit
of a sovereign purpose and not for gain or profit, then immunity is not deemed waived.
3. The DFA has legal standing in cases where the diplomatic immunity of persons/entities are being
challenged. This is because it is the DFA’s function to determine which entity is covered by
diplomatic immunity.

Facts: Asian Development Bank (ADB) was the respondent in an illegal dismissal case. ADB invoked
immunity from suit, citing its Charter and Headquarters Agreement with the Philippines. 
But the Labor Arbiter took cognizance of the case on the impression that ADB waives its diplomatic
immunity from suit, and ruled against ADB.

ADB did not appeal. Instead, the DFA referred the matter to NLRC, seeking “vacation of the void
judgment”, which the NLRC denied. 

Issue: Is ADB immune from suit?

Ruling: Yes. The Charter and Headquarters Agreement expressly states that ADB enjoys immunity from
every form of legal process, except in cases of borrowing money, guaranteeing obligations, or buy and
selling or underwriting the sale of securities. 

Ratio: 
“It is a recognized principle of international law and under our system of separation of powers that
diplomatic immunity is essentially a political question and courts should refuse to look beyond a
determination by the executive branch of the government, and where the plea of diplomatic immunity
is recognized and affirmed by the executive branch of the government . . . it is then the duty of the
courts to accept the claim of immunity upon appropriate suggestion by the principal law officer of the
government, . . . or other officer acting under his direction. Hence, in adherence to the settled principle
that courts may not so exercise their jurisdiction . . . as to embarrass the executive arm of the
government in conducting foreign relations, it is accepted doctrine that in "such cases the judicial
department of government follows the action of the political branch and will not embarrass the latter by
assuming an antagonistic jurisdiction.”

Continuation of ruling: Being an international organization that has been extended diplomatic status,
the ADB is independent of the municipal law. 

Ratio:
“One of the basic immunities of an international organization is immunity from local jurisdiction, i.e.,
that it is immune from the legal writs and processes issued by the tribunals of the country where it is
found. (See Jenks, Id., pp. 37-44). The obvious reason for this is that the subjection of such an
organization to the authority of the local courts would afford a convenient medium thru which the host
government may interfere in their operations or even influence or control its policies and decisions of
the organization; besides, such subjection to local jurisdiction would impair the capacity of such body to
discharge its responsibilities impartially behalf of its member-states.”

Issue: If a foreign entity is granted immunity from suit but is entering into contacts with private
companies, does this act constitute a waiver of immunity?

Ruling: No, not automatically. 

Ratio: Immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a
state, but not with regard to private act or acts jure gestionis. 

The mere entering into a contract by a foreign state/entity with a private party cannot be the ultimate
test of whether that entity retains its immunity or waives it through private contracting. Such an act can
only be the start of the inquiry. The logical question is whether the foreign entity is engaged in the
activity in regular course of business. If the foreign entity is not engaged regularly in a business or trade,
the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign
activity, or an incident thereof, then it is an act jure imperit, especially when it is not undertaken for gain
or profit.

Here, the service contracts referred of ADB were not intended for profit or gain but are official acts over
which a waiver of immunity would not attack.

Issue: Does the DFA have legal standing?

Ruling: Yes. The DFA's function includes the determination of persons and institutions covered by
diplomatic immunities, a determination which, when challenged, entitles it to seek relief from the court
so as not to seriously impair the conduct of the country's foreign relations. The DFA must be allowed to
plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine
government before the international community.

Case No. 6: Municipality of San Fernando v. Judge Firme, 195 SCRA 692
The municipality cannot be held liable for the torts committed by its regular employee, who was then
engaged in the discharge of governmental functions.

FACTS: 

At about 7 AM of December 16, 1965, a passenger jeepney, a sand truck and a dump truck of the
Municipality of San Fernando, La Union collided. Due to the impact, several passengers of the jeepney
including Laureano Baniña Sr. died. The heirs of Baniña filed a complaint for damages against the owner
and driver of the jeepney. The jeepney driver and owner, in turn, filed a Third Party Complaint against
the Municipality and its dump truck driver, Bislig. Municipality filed its answer and raised the defense of
non-suability of the State.

After trial, the court ruled in favor of the plaintiffs and ordered the Municipality and Bislig to pay  jointly
and severally the heirs of Baniña.

ISSUE: 

1. Is the Municipality liable?

RESOLUTION:

No, the Municipality is absolved of liability since Bislig, the driver of the dump truck, was then
engaged in the discharge of governmental functions.

The general rule Is that the State may not be sued except when it gives consent to be sued
(Article XVI, Sec. 3 of the Constitution.) Express consent may be embodied in a general law or a special
law. The standing consent of the State to be sued in case of money claims involving liability arising from
contracts is found in Act No. 3083.
 Consent is implied when the government enters into business contracts, thereby descending to
the level of the other contracting party, and also when the State files a complaint, thus opening itself to
a counterclaim.

Municipal corporations, like provinces and cities, are agencies of the State when they are
engaged in governmental functions and therefore should enjoy the sovereign immunity from suit.
Nevertheless, they are subject to suit even in the performance of such functions because their charter
provided that they can sue and be sued.

Municipal corporations are suable because their charters grant them the competence to sue and
be sued. However, they are generally not liable for torts committed by them in the discharge
of governmental functions and can be held answerable only if it can be shown that they were acting in
a proprietary capacity. In permitting such entities to be sued, the State merely gives the claimant the
right to show that the defendant was not acting in its governmental capacity when the injury was
committed or that the case comes under the exceptions recognized by law. Failing this, the claimant
cannot recover.

In this case, the driver of the dump truck of the municipality insists that "he was on his way to
the Naguilian river to get a load of sand and gravel for the repair of San Fernando's municipal streets." In
the absence of any evidence to the contrary, the regularity of the performance of official duty is
presumed. Hence, the driver of the dump truck was performing duties or tasks pertaining to his office.
Municipality cannot be held liable for the torts committed by its regular employee, who was then
engaged in the discharge of governmental functions.

***Distinction between suability and liability: "Suability depends on the consent of the state to be sued,
liability on the applicable law and the established facts. The circumstance that a state is suable does not
necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent
to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When
the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can,
that the defendant is liable."

Case No. 7: Farolan v. CTA 217 SCRA 298

The Bureau of Customs, being an unincorporated agency without a separate juridical personality, enjoys
immunity from suit. It is invested with an inherent power of sovereignty, namely the power of taxation. It
performs governmental functions.

Facts:

Vessel S/S Pacific Hawk arrived at the Port of Manila carrying bales of screen net consigned to
Bagong Buhay Trading. Pursuant to the declaration of Bagong Buhay’s foreign supplier, the shipment
consisted of 80 bales of screen net of 500 rolls amounting to $3,750.00. Since the customs examiner
found the subject shipment reflective of the declaration, Bagong Buhay paid the duties and taxes due on
the amount of P11,250. Thereafter, the customs appraiser made a return of duty.The Office of the
Collector of Customs ordered a re-examination and the re-appraised value revealed that the shipment
consisted of 80 bales of screen, containing 1,600 rolls valued at $37,560.00. Thus, Bagong Buhay Trading
was assessed P272,600.00 as duties and taxes due. Because of its misdeclaration as to quantity and
value, the Collector of Customs forfeited it in favor of the government.

The Bagong Buhay elevated the case to the Supreme Court asking for the release of the questioned
goods because they were being exposed to natural elements. Hence it ordered its release in favor of
Bagong Buhay. 16 bales remain missing, and some were in bad condition. Bagong Buhay demands that
the Bureau of Customs be ordered to pay for damages for the goods it actually lost.

Issue:

Whether the Collector of Customs may be held liable for the goods lost which were the subject of
forfeiture.

Ruling:

No. The political doctrine that "the state may not be sued without its consent" categorically applies.
The Bureau of Customs cannot be held liable for actual damages that Bagong Buhay sustained with
regard to its goods. Otherwise, to permit Bagong Buhay's claim to prosper would violate the doctrine of
sovereign immunity. Since it demands that the Commissioner of Customs pay for actual damages it
sustained, for which ultimately liability will fall on the government, then this has been converted
technically into a suit against the state.

As an unincorporated government agency without any separate juridical personality of its own, the
Bureau of Customs enjoys immunity from suit. Along with the Bureau of Internal Revenue, it is invested
with an inherent power of sovereignty, namely, taxation. As an agency, the Bureau of Customs performs
the governmental function of collecting revenues which is definitely not a proprietary function. Thus,
Bagong Buhay’s claim for damages against the Commissioner of Customs must fail.

Case No. 8: City of Angeles v. CA, G.R. No. 97882, Aug. 28,1996
Doctrine:

Public officials are not immune from damages in their personal capacities arising from acts done in bad
faith, with malice, or beyond the scope of his authority or jurisdiction.

Facts:
A donor donated 51 lands to the City of Angeles and expressly stated in the amended deed of donation
that it must be devoted and utilized to erect a city sports center or sports complex. Plans must be
submitted to the donor within six months and if there are any changes or modifications, the written
consent of the donor is necessary. The deed further states that the completion of the sports complex
must be done within five years from March 9, 1984.

Any breach to the amended deed of donation will entitle the donor to revoke or rescind the deed of
donation and in such eventuality, the donee agrees to vacate and return the premises together with all
the improvements to the donor in a peaceful manner without the necessity of judicial action.

On July 19, 1988, the construction of a drug rehabilitation center started. The donor claimed that he
even offered another site for the drug rehabilitation center because constructing it on the donated lands
would be violative of the conditions on the amended deed of donation. Still, the construction of the drug
rehabilitation center continued.

On August 8, 1988, the donor then filed a complaint with the RTC asking for revocation of the deed plus
damages with preliminary injunction or TRO. Two days after, the trial court issued a TRO to enjoin the
petitioners from the construction of the drug rehabilitation center, which was already 40 percent
complete at that time.

The city claimed later that they already repealed the resolution allowing the construction of the drug
rehabilitation center and instead changed it to a sports development and youth center to conform to
the amended deed of donation of the donor. However, that was not true because the construction of
the drug rehabilitation center continued.

The RTC still decided against the city of Angeles and during the appeal of the petitioner, the drug
rehabilitation center was inaugurated on April 15, 1989.

Issue: Are the public officials, who took part in the construction of the rehabilitation center, liable?

Resolution:

P.D. 1216 was violated in this case. Because under such decree, thirty percent of the total area of a
subdivision must be reserved for open spaces for parks, recreational areas, playgrounds, schools, roads,
places of worship, hospitals, centers, and other similar facilities and amenities. This percentage is non-
buildable. However, such percentage could be decreased depending on the area where the lot is
located. It was determined that the lots are located in such a place that the open spaces should be at
least seven percent. Since the donated land constitutes a little more than 5 percent of the gross area of
the subdivision, there is no excess land to speak of.

Hence, the drug rehabilitation center or the sports complex should not be built. Both the donor and the
donee were in violation of P.D. 1216 therefore the courts will not aid either part to enforce an illegal
contract but will leave them both were they find them. Neither party can recover damages, each must
bear the consequences of his own acts.
However, for scholarly purposes, the Supreme Court noted that the drug rehabilitation center must be
removed or demolished. In theory, the cost of such demolition and reimbursement of public funds must
be borne by the officials who ordered and directed such construction.

Public officials are not immune from damages in their personal capacities arising from acts done in bad
faith, with malice, or beyond the scope of his authority or jurisdiction.

In the instant case, the public officials concerned deliberately violated the law and persisted in their
violations, going as far as attempting to deceive the courts by their pretended change and usage for the
center and making a mockery of the judicial system.

But because the mayor and the members of the Sangguniang Panlungsod were only sued in their official
capacities, they cannot be held personally liable without giving them their day in court.

After due consideration of the circumstances, we believe that the fairest and most equitable solution is
to have the City of Angeles, donee of the subject open space and, ostensibly, the main beneficiary of the
construction and operation of the proposed drug rehabilitation center, undertake the demolition and
removal of said center, and if feasible, recover the cost thereof from the city officials concerned.

Case No. 9: Veterans Manpower v. CA, 214 SCRA 286

Topics that was discussed:
(1) Sec. 3, Art. XVI. “The state cannot be sued without its consent”
(2) Suit against Public Officers
(3) Express Consent – Consent can be given only by an act of the legislative body, in a general or a
special law.

FACTS:

Veterans Manpower and Protective Services, Inc. (Veterans) alleges that Sec. 4 and 17 of Republic Act
No. 5487 or the Private Security Agency Law violate the 1987 Constitution against monopolies, unfair
competition and combinations in restraint of trade, and tend to favor and institutionalize the
Philippine Association of Detective and Protective Agency Operators, Inc.
Philippine Association of Defective & Protective Agency Operators (PADPAO) which is
monopolistic because it has an interest in more than one security agency.

Veterans also questions the validity of par. 3 (g) of the Modifying Regulations on the Issuance of License
to Operate and Private Security Licenses and Specifying Regulations for the Operation of PADPAO issued
by PC Chief Lt. Gen. Fidel V. Ramos, through Col. Sabas V. Edades, requiring that:

“all private security agencies/company security forces must register as members of any
PADPAO Chapter organized within the Region where their main offices are located...”.
The membership requirement in PADPAO is compulsory in nature, it allegedly violates legal and
constitutional provisions against monopolies, unfair competition and combinations in restraint of trade.
Veterans Manpower and Protective Services, Inc. vs. Court of Appeals
A Memorandum of Agreement was executed by PADPAO and the PC Chief, which fixed the minimum
monthly contract rate per guard for 8 hours of security service per day at P2,255.00 within Metro Manila
and P2,215.00 outside of Metro Manila.

Odin Security Agency (Odin) filed a complaint with PADPAO accusing Veterans of cut-throat
competition by undercutting its contract rate for security services rendered to the Metropolitan
Waterworks and Sewerage System (MWSS), charging said customer lower than the standard minimum
rates provided in the Memorandum of Agreement.
Veterans Manpower and Protective Services, Inc. vs. Court of Appeals
PADPAO found Veterans guilty of cut-throat competition, the PADPAO Committee on Discipline
recommended the expulsion of Veterans from PADPAO and the cancellation of its license to operate a
security agency which was affirmed by the Philippine Constabulary Supervisory Unit for Security and
Investigation Agencies (PC-SUSIA) recommending the cancellation of Veterans’ license.

As a result, PADPAO refused to issue a clearance/certificate of membership to Veterans.

Veterans made a request letter to the PC Chief to set aside or disregard the findings of PADPAO and
consider their application for renewal of its license, even without a certificate of membership from
PADPAO. – The PC Chief did not reply.

Veterans filed a case in the Regional Trial Court. The court issued a restraining order enjoining the PC
Chief and PC-SUSIA "from committing acts that would result in the cancellation or non-renewal of
VMPSI’s license”

The PC Chief filed a motion to dismiss on the grounds that the case is against the State which
had not given consent and that Veterans’ license already expired, hence, the restraining order
or preliminary injunction would not serve any purpose because there was no more license to be
cancelled.

The RTC denied VMPI’s application for being premature. Veterans reiterated that PC-SUSIA had
rejected payment of the penalty for its failure to submit its application for renewal of its license.

The RTC issued the writ of preliminary injunction upon a bond of P100,000.00, restraining the
defendants, or any one acting in their behalf, from cancelling or denying renewal of Veterans’
license, until further orders from the court.

The PC Chief and PC-SUSIA filed a Motion for Reconsideration, but it was denied, so they sought relief by
a petition for certiorari in the Court of Appeals which was granted.

Veterans filed a petition for review.

ISSUE:
Whether Veteran’s complaint is a suit against the State without its consent.

RULING:

Yes, the complaint is a suit against the State without its consent.

1. Immunity from Suit – The PC Chief and the PC-SUSIA may not be sued without the consent of
the State.

The State may not be sued without its consent (Article XVI, Section 3, of the 1987
Constitution). Invoking this rule, the PC Chief and PC-SUSIA contend that, being
instrumentalities of the national government exercising a primarily governmental function of
regulating the organization and operation of private detective, watchmen, or security guard
agencies, said official (the PC Chief) and agency (PC-SUSIA) may not be sued without the
Government’s consent,

In this case, Veterans’ complaint seeks not only to compel the public respondents to act in a
certain way, but worse, because Veterans seeks actual and compensatory damages in the sum
of P1,000,000.00, exemplary damages in the same amount, and P200,000.00 as attorney’s fees
from said public respondents. Even if its action prospers, the payment of its monetary claims
may not be enforced because the State did not consent to appropriate the necessary funds for
that purpose.

2. Suit against Public Officers – Public officials may be sued in his personal capacity IF he acts,
among others beyond the scope of his authority.

A public official may sometimes be held liable in his personal or private capacity if he acts in
bad faith, or beyond the scope of his authority or jurisdiction (Shauf v. Court of Appeals, supra),

Here, the acts for which the PC Chief and PC-SUSIA are being called to account in this case, were
performed by them as part of their official duties, without malice, gross negligence, or bad faith,
no recovery may be had against them in their private capacities.

3. Express Consent to be sued can be given only by act of the legislative body.

Waiver of the State’s immunity from suit, being a derogation of sovereignty, will not be lightly
inferred, but must be construed strictissimi juris (Republic v. Feliciano, 148 SCRA 424). The
consent of the State to be sued must emanate from statutory authority, hence, from a
legislative act, not from a mere memorandum. Without such consent, the trial court did not
acquire jurisdiction over the public respondents.

The state immunity doctrine rests upon reasons of public policy and the inconvenience and
danger which would flow from a different rule. "It is obvious that public service would be
 hindered, and public safety endangered, if the supreme authority could be subjected to suits at
the instance of every citizen, and, consequently, controlled in the use and disposition of the
means required for the proper administration of the government."

Case No. 10: Wylie v. Rarang, 209 SCRA 357

“The general rule is that public officials can be held personally accountable for acts claimed to
have been performed in connection with official duties where they have acted ultra vires or where there
is showing of bad faith… A mere invocation of the immunity clause does not ipso facto result in the
charges being automatically dropped.”

Immunity from suit cannot institutionalize irresponsibility and non-accountability nor grant a
privileged status not claimed by any other official of the Republic.

FACTS:

Petitioner M. H. Wylie was the assistant administrative officer while petitioner Capt. James
Williams was the commanding officer of the U. S. Naval Base in Subic Bay, Olongapo City.

Private respondent Aurora I. Rarang was an employee in the office of the Provost Marshal
assigned as merchandise control guard.
Wylie vs. R
M. H. Wylie, in his capacity as assistant administrative officer of the U.S. Naval Station
supervised the publication of the "Plan of the Day" (POD) which was published daily by the US Naval
Base station.

The POD featured important announcements, necessary precautions, and general matters of
interest to military personnel. One of the regular features of the POD was the "action line inquiry."

On February 3, 1978, the POD made a publication, under the "NAVSTA ACTION LINE INQUIRY"
which mentioned a certain person named “Auring” who is described as a disgrace to her division and to
the Office of the Provost Marshal.
Wylie
The private respondent was the only one who was named "Auring" in the Office of the Provost
Marshal and was subsequently proven that it was her being referred to when petitioner M. H. Wylie
wrote her a letter of apology for the "inadvertent" publication.

The private respondent then filed an action for damages alleging that the article constituted
false, injurious, and malicious defamation and libel tending to impeach her honesty, virtue and
reputation exposing her to public hatred, contempt and ridicule; and that the libel was published and
circulated in the English language and read by almost all the U. S. Naval Base personnel.
Wylie
WYLIE AND WILLIAMS’ ARGUMENT in this Petition for Review is that they made the publication
in the performance of their official functions as administrative assistant (Wylie) and commanding officer
(Williams) of the US Navy and were, therefore, immune from suit for their official actions.
ISSUE:

Does the grant of rights, power, and authority to the US under the RP-US Bases Treaty cover
immunity of its officers from crimes and torts?

RULING:

NO.

Wylie and Williams actively participated in screening the features and articles in the POD as part
of their official functions. Under the rule that US officials in the performance of their official functions
are immune from suit, then it should follow that they may not be held liable for the questioned
publication. BUT! TAKE NOTE THAT THEY WERE SUED IN THEIR PERSONAL CAPACITIES for their alleged
tortious acts in publishing a libelous article. And we presume, those of the US don’t allow the
commission of crimes in the name of official duty, and these aren’t covered by the immunity agreement.

CHAVEZ v. SANDIGANBAYAN on the law on immunity from suit of public officials is applicable
here:

“The general rule is that public officials can be held personally accountable for acts claimed to
have been performed in connection with official duties where they have acted ultra vires or where there
is showing of bad faith… A mere invocation of the immunity clause does not ipso facto result in the
charges being automatically dropped.”

Immunity from suit cannot institutionalize irresponsibility and non-accountability nor grant a
privileged status not claimed by any other official of the Republic.

ULTRA VIRES ACT CAN’T BE PART OF OFFICIAL DUTY. Indeed the imputation of theft contained
in the POD is defamation against Rarang’s character and reputation. Wylie himself admitted that the
Office of the Provost Marshal explicitly recommended the deletion of the name if the article was
published, but they were negligent because under their direction they issued the publication without
deleting the name. Such act or omission is ultra vires and cannot be part of official duty. It was a tortious
act which ridiculed Rarang, and as a result she suffered besmirched reputation, serious anxiety,
wounded feelings and social humiliation, especially so, since the article was baseless and false. Wylie
and Williams alone, in their personal capacities, are liable for the damages they caused.

It was through their own negligence that the name “Auring” was not deleted, and such act or
omission is ultra vires and cannot be part of official duty. They, alone, in their personal capacities are
liable for the damages caused to Rarang.

Case No. 11: Republic v. Feliciano, 148 SCRA 424

A suit against the State, under settled jurisprudence is not permitted, except upon a showing that the
State has consented to be sued, either expressly or by implication through the use of statutory
language too plain to be misinterpreted. It may be invoked by the courts sua sponte at any stage of
the proceedings.

Waiver of immunity, being a derogation of sovereignty, will not be inferred lightly. but must be
construed in strictissimi juris (of strictest right).

Facts:

Respondent Feliciano filed a complaint with the then Court of First Instance of Camarines Sur against the
Republic of the Philippines, represented by the Land Authority, for the recovery of ownership and
possession of a parcel of land. The claim of ownership by Feliciano was derived from deed of sale of the
property traced from informacion posesoria.

However, the said property was subject of Proclamation No. 90 by President Magsaysay for
resettlement purposes.The Proclamation contained the reservation clause” subject to private rights, if
any there be. “Feliciano asserts that the subject property must be excluded from the coverage of the
resettlement project. The trial court dismissed the case on the ground of non-suability of the State.

Issues:

1. Whether the State can be sued for recovery and possession of a parcel of land.
2. Whether the invocation of Proclamation No. 90 be considered as a waiver of State Immunity.

Ruling:

1. No. The doctrine of non-suability of the State has proper application in this case. The plaintiff
has impleaded the Republic of the Philippines as defendant in an action for recovery of
ownership and possession of a parcel of land, bringing the State to court just like any private
person who is claimed to be usurping a piece of property. A suit for the recovery of property is
not an action in rem, but an action in personam.

By its caption and its allegation and prayer, the complaint is clearly a suit against the State,
which under settled jurisprudence is not permitted, except upon a showing that the State has
consented to be sued, either expressly or by implication through the use of statutory language
too plain to be misinterpreted. There is no such showing in the instant case. Worse, the
complaint itself fails to allege the existence of such consent. This is a fatal defect, and on this
basis alone, the complaint should have been dismissed.

The failure of the petitioner to assert the defense of immunity from suit when the case was tried
before the court a quo, as alleged by private respondent, is not fatal. It is now settled that such
defense "may be invoked by the courts sua sponte at any stage of the proceedings."
 2. No such consent can be drawn from the language of the Proclamation. The exclusion of existing
private rights from the reservation established by Proclamation No. 90 can not be construed as a
waiver of the immunity of the State from suit. Waiver of immunity, being a derogation of
sovereignty, will not be inferred lightly. but must be construed in strictissimi juris. 5Moreover,
the Proclamation is not a legislative act. The consent of the State to be sued must emanate from
statutory authority. Waiver of State immunity can only be made by an act of the legislative
body.

Case No. 12: Meritt v. Gov't. of the Phil. Islands, 34 Phil. 311
By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its
liability to plaintiff, or create any cause of action in his favor, or extend its liability to any cause not
previously recognized. It merely gives a remedy to enforce a preexisting liability and submits itself to the
jurisdiction of the court, subject to its right to interpose any lawful defense.

The State (the Government of the Philippine Islands) is only liable, according to the decisions of the
Supreme Court of Spain, for the acts of its agents, officers and employees when they act as special
agents within the meaning of paragraph 5 of article 1903.

FACTS:

 Plaintiff E. Meritt was riding on a motorcycle crossing Taft Avenue when he was struck by the General
Hospital ambulance. Accordingly, upon reaching said avenue, the General Hospital ambulance turned
suddenly and unexpectedly and long before reaching the center of the street, into the right side of Taft
Avenue, without having sounded any whistle or horn, by which movement it struck the plaintiff, who
was already six feet from the southwestern point or from the post place there. The plaintiff was so
severely injured when he was taken to the General Hospital. At ten o'clock of the night in question,
which was the time set for performing the operation, his pulse was so weak and so irregular that, in his
opinion, there was little hope that he would live.

As a consequence, plaintiff suffered in the efficiency of his work as a contractor, he had to dissolved the
partnership he had formed with the engineer, because he was incapacitated from making mathematical
calculations on account of the condition of his leg and of his mental faculties; and he had to give up a
contract he had for the construction of the Uy Chaco building because he could no longer, as he had
before done, climb up ladders and scaffoldings to reach the highest parts of the building.

The plaintiff was authorized to bring this action against the Government "in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General Hospital and to
determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said
collision, . . . ." 

Act No. 2457, effective February 3, 1915, reads: 

An Act authorizing E. Merritt to bring suit against the Government of the Philippine Islands and
authorizing the Attorney-General of said Islands to appear in said suit. 
Whereas a claim has been filed against the Government of the Philippine Islands by Mr. E. Merritt, of
Manila, for damages resulting from a collision between his motorcycle and the ambulance of the
General Hospital on March twenty-fifth, nineteen hundred and thirteen; 

Whereas it is not known who is responsible for the accident nor is it possible to determine the amount
of damages, if any, to which the claimant is entitled; and 

Whereas the Director of Public Works and the Attorney-General recommended that an Act be passed by
the Legislature authorizing Mr. E. Merritt to bring suit in the courts against the Government, in order
that said questions may be decided: Now, therefore, 

By authority of the United States, be it enacted by the Philippine Legislature, that: 

SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of the city of Manila
against the Government of the Philippine Islands in order to fix the responsibility for the collision
between his motorcycle and the ambulance of the General Hospital, and to determine the amount of
the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, and the Attorney-
General of the Philippine Islands is hereby authorized and directed to appear at the trial on the behalf of
the Government of said Islands, to defendant said Government at the same. 

SEC. 2. This Act shall take effect on its passage. 

Enacted, February 3, 1915.

ISSUES:

Whether or not the Insular Government, in enacting the above quoted Act, simply waive its immunity
from suit or did it also concede its liability to the plaintiff?

HELD:

Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it also
concede its liability to the plaintiff? If only the former, then it cannot be held that the Act created any
new cause of action in favor of the plaintiff or extended the defendant's liability to any case not
previously recognized.

All admit that the Insular Government (the defendant) cannot be sued by an individual without its
consent. It is also admitted that the instant case is one against the Government. As the consent of the
Government to be sued by the plaintiff was entirely voluntary on its part, it is our duty to look carefully
into the terms of the consent, and render judgment accordingly.

The Government of the Philippine Islands having been "modeled after the Federal and State
Governments in the United States," we may look to the decisions of the high courts of that country for
aid in determining the purpose and scope of Act No. 2457.  In the United States the rule that the state is
not liable for the torts committed by its officers or agents whom it employs, except when expressly
made so by legislative enactment, is well settled.
As to the scope of legislative enactments permitting individuals to sue the state where the cause of
action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus: 

By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its
liability to plaintiff, or create any cause of action in his favor, or extend its liability to any cause not
previously recognized. It merely gives a remedy to enforce a preexisting liability and submits itself to
the jurisdiction of the court, subject to its right to interpose any lawful defense.

It being quite clear that Act No. 2457 does not operate to extend the Government's liability to any
cause not previously recognized, we will now examine the substantive law touching the defendant's
liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of article 1903 of the
Civil Code reads: 

The state is liable in this sense when it acts through a special agent, but not when the damage should
have been caused by the official to whom properly it pertained to do the act performed, in which case
the provisions of the preceding article shall be applicable. 

The supreme court of Spain in defining the scope of this paragraph said: 

That the responsibility of the state is limited by article 1903 to the case wherein it acts through a special
agent(and a special agent, in the sense in which these words are employed, is one who receives a
definite and fixed order or commission, foreign to the exercise of the duties of his office if he is a special
official) so that in representation of the state and being bound to act as an agent thereof, he executes
the trust confided to him. This concept does not apply to any executive agent who is an employee of the
acting administration and who on his own responsibility performs the functions which are inherent in
and naturally pertain to his office and which are regulated by law and the regulations." (Supreme Court
of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.) 

It is, therefore, evidence that the State (the Government of the Philippine Islands) is only liable,
according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents,
officers and employees when they act as special agents within the meaning of paragraph 5 of article
1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an agent. 

Case No. 13: Froilan v. Pan Oriental Shipping, Sept. 30, 1954
By taking the initiative in an action against private party, the State surrenders its privileged position
and comes down to the level of the defendant.

FACTS:

Fernando A. Froilan, filed a complaint against the defendant-appellant, Pan Oriental Shipping Co.,
alleging that he purchased from the Shipping Commission the vessel FS-197 for P200,000, paying
P50,000 down and agreeing to pay the balance in installments; that to secure the payment of the
balance of the purchase price, he executed a chattel mortgage of said vessel in favor of the Shipping
Commission; that for various reason, among them the non-payment of the installments, the Shipping
Commission took possession of said vessel and considered the contract of sale cancelled; that the
Shipping Commission chartered and delivered said vessel to the defendant-appellant Pan Oriental
Shipping Co. subject to the approval of the President of the Philippines. Froilan appealed the action of
the Shipping Commission to the President of the Philippines and, in its meeting on August 25, 1950, the
Cabinet restored him to all his rights under his original contract with the Shipping Commission; that he
had repeatedly demanded from the Pan Oriental Shipping Co. the possession of the vessel in question
but the latter refused to do so. Hence, Froilan a replevin which was eventually granted by the trial court
which in effect, Pan Oriental Shipping Co was divested of possession of the ship. The Government of the
Philippines filed a complaint intervention and contended that Froilan has not complied with its
obligation therefore Government of the Philippines was entitled to the possession of the said vessel
either under the terms of the original contract as supplemented by Froilan's letter dated January 28,
1949, or in order that it may cause the extrajudicial sale thereof under the Chattel Mortgage Law. Pan
Oriental Shipping Co. filed counterclaim to the complaint in intervention alleging that the Government
of the Republic of the Philippines was obligated to deliver the vessel in question to it by virtue of a
contract of bare-boat charter with option to purchase executed on June 16, 1949, by the latter in favor
of the former. Government of the Philippines filed a motion to dismiss contending that Government of
the Philippines was not subject to the jurisdiction of the court in connection with the counterclaim
because it is immune from suit.

ISSUE:

WHETHER THE INTERVENOR GOVERNMENT OF THE PHILIPPINES IS IMMUNE FROM SUIT

RESOLUTION:

NO because by filing its complaint in intervention the Government in effect waived its right of
nonsuability.

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.

The United States Supreme Court thus explains:

"No direct suit can be maintained against the United States. But when an action
is brought by the United States to recover money in the hands of a party who has a legal
claim against them, it would be a very rigid principle to deny to him the right of setting
up such claim in a court of justice, and turn him around to an application to Congress."
(Sinco, Philippine Political Law, Tenth Ed., pp. 36-37, citing U. S. vs. Ringgold, 8 Pet. 150,
8 L. ed. 899.)”

It is however, contended for the intervenor that, if there was at all any waiver, it was in favor of the
plaintiff against whom the complaint in intervention was directed. This contention is untenable. As
already stated, the complaint in intervention was in a sense in derogation of the defendant's claim over
the possession of the vessel in question.
 Case No. 14: Fontanilla v. Maliaman, 194 SCRA 486
The liability of the State has two aspects. namely:
1. Its public or governmental aspects where it is liable for the tortious acts of special agents only.
2. Its private or business aspects (as when it engages in private enterprises) where it becomes liable as
an ordinary employer.
FACTS: 
A pick up owned by the National Irrigation Administration (NIA) and driven officially by its regular driver,
Hugo Garcia, bumped a bicycle ridden by Francisco Fontanilla, which resulted in the latter's death. The
parents of Francisco filed a suit for damages against Garcia and the NIA, as Garcia's employer. After trial,
the court awarded actual, moral and exemplary damages to Spouses Fontanilla. NIA appealed. The
Solicitor General contends that the NIA does not perform solely and primarily proprietary functions but
is an agency of the government tasked with governmental functions, and is therefore not liable for the
tortious act of its driver Hugo Garcia, who was not its special agent.
 
ISSUE: 

May NIA, a government agency, be held liable for the damages caused by the negligent act of its driver
who was not its special agent?
 
RULING:

Yes. NIA is a government agency with a juridical personality separate and distinct from the government.
It is not a mere agency of the government but a corporate body performing proprietary
functions. Therefore, it may be held liable for the damages caused by the negligent act of its driver who
was not its special agent. 
 Section 1 of RA No. 3601 tells us that NIA is a government agency invested with a corporate personality
separate and distinct from the government, thus is governed by the Corporation Law.  Section 2,
subsection f of PD 552 provides that NIA also has its own assets and liabilities and has corporate powers
to be exercised by a Board of Directors. Section 2, subsection b of PD 552 provides that NIA may sue and
be sued in court. 

Case No. 15: Republic v. Villasor,54 SCRA 84

Case No. 16: Municipality of San Miguel v. Fernandez, 130 SCRA 56

Doctrine:

It is the settled doctrine of the law that not only the public property but also the taxes and public
revenues of such corporations cannot be seized under execution against them, either in the treasury or
when in transit to it. Judgments rendered for taxes, and the proceeds of such judgments in the hands of
officers of the law, are not subject to execution unless so declared by statute.

Facts:

The Court of First Instance of Bulacan rendered judgment holding herein petitioner Municipality of San
Miguel liable to private respondents Judge Fernandez et.,al. The court ordered the municipality to pay
private respondents the loss of income from rentals on subject lots and attorney’s fees.

The foregoing judgment became final when herein petitioner's appeal was dismissed due to its failure to
file the record on appeal on time.The dismissal was affirmed by the Court of Appeals so the respondents
moved for the issuance of writ of execution for the satisfaction of the judgment. Petitioner filed a
Motion to Quash the writ of execution on the ground that the municipality's property or funds are all
public funds exempt from execution, however such motion to quash was dismissed. The respondent
judge issued another order requiring both the municipal and provincial treasurer to comply with the
money judgment. When the treasurers (provincial and municipal) failed to comply with the order,
respondent judge issued an order for their arrest and that they will be release only upon compliance
thereof.

ISSUE:

Whether the funds in the hands of the provincial and municipal treasurers of Bulacan and San Miguel,
respectively, are public funds which are exempt from execution for the satisfaction of the money
judgment?

RULING:

Yes.The funds in the hands of the provincial and municipal treasures of Bulacan and San Miguel
respectively are public funds and are exempt from execution. It was explained in the case of
Municipality of Paoay vs. Manaois, 86 Phil. 629 "that they are held in trust for the people, intended and
used for the accomplishment of the purposes for which municipal corporations are created, and that to
subject said properties and public funds to execution would materially impede, even defeat and in some
instances destroy said purpose." And, in Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was held
that "it is the settled doctrine of the law that not only the public property but also the taxes and public
revenues of such corporations cannot be seized under execution against them, either in the treasury or
when in transit to it. Judgments rendered for taxes, and the proceeds of such judgments in the hands of
officers of the law, are not subject to execution unless so declared by statute."

Besides PD 447, known as the Decree on Local Fiscal Administration, provides in section 3 (a) that ―no
money shall be paid out of the treasury except in pursuance of a lawful appropriation or other specific
statutory authority. Otherwise stated, there must be a corresponding appropriation in the form of an
ordinance duly passed by the Sangguniang Bayan before any money of the municipality may be paid out.
In the case at bar, it has not been shown that the Sangguniang Bayan has passed any ordinance to this
effect.
Thus, it is clear that all the funds of petitioner municipality in the possession of the Municipal Treasurer
of San Miguel, as well as those in the possession of the Provincial Treasurer of Bulacan, are also public
funds and as such they are exempt from execution.

Case No. 17: Municipality of Makati v. CA, 190 SCRA 206

Doctrines:
1. Public funds and government properties for public use cannot be subjected to levy and
execution of judgment, unless provided by statute.
2. The proper remedy in cases where a municipality unjustifiably refuses to pay money judgments
rendered against it is mandamus.

Facts: Municipality of Makati expropriated a portion of land owned by private respondent Admiral
Finance Creditors Consortium, Inc (AFCC). The RTC fixed the appraised value of the property and
ordered Makati to pay this amount. It then issued a writ of execution accompanied with a writ of
garnishment of funds of Makati. The funds of the municipality were deposited in PNB. 

Issue/Petitioner’s contention: Makati contends that its funds at the PNB could neither be garnished nor
levied upon execution, for to do so would result in the disbursement of public funds without the proper
appropriation required under the law. Is Makati correct?

Ruling: Yes. Public funds are not subject to levy and execution, unless otherwise provided for by statute.
More particularly, the properties of a municipality, whether real or personal, which are necessary for
public use cannot be attached and sold at execution sale to satisfy a money judgment against the
municipality. Municipal revenues derived from taxes, licenses and market fees, which are intended
primarily and exclusively for the purpose of financing the governmental activities and functions of the
municipality, are exempt from execution. 

Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its
public funds an amount corresponding to the balance due under the RTC decision, no levy under
execution may be validly effected on the public funds of Makati.

Issue: What then is the proper remedy of a private entity/person who wins a case where money
judgment is rendered against a municipality/government entity?

Ruling: Mandamus. Where a municipality fails or refuses, without justifiable reason, to effect payment
of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in
order to compel the enactment and approval of the necessary appropriation ordinance, and the
corresponding disbursement of municipal funds therefor.

Case No. 18: Ministerio v. CFI of Cebu, 40 SCRA 464

Where the judgment in such a case would result not only in the recovery of possession of the property in
favor of said citizen but also in a charge against or financial liability to the Government, then the suit
should be regarded as one against the government itself, and, consequently, it cannot prosper or be
validly entertained by the courts except with the consent of said Government. However, where the public
official is made to account in his capacity as such for acts contrary to law and injurious to the rights of
plaintiff, an action against the officials or officers by one whose rights have been invaded or violated by
such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the
State from suit.

FACTS:

On April 13, 1966, Ministerio and Sadaya in a complaint filed with the Court of First Instance of
Cebu, sought the payment of just compensation for a registered lot, alleging that in 1927 the National
Government through its authorized representatives took physical and material possession of it and used
it for the widening of the Gorordo Avenue, a national road in Cebu City, without paying just
compensation and without any agreement, either written or verbal.

Ministerio and Sadaya alleged that repeated demands for the payment of its price or return of
its possession, but defendants Public Highway Commissioner (PHC) and the Auditor General (AG)
refused to restore its possession. It was further alleged that the appraisal committee of the City of Cebu
approved Resolution No. 90, appraising the reasonable and just price of Lot No. 647-B at P50.00 per
square meter or a total price of P52,250.00. Thereafter, the complaint was amended on June 30, 1966 in
the sense that the remedy prayed for was in the alternative, either the restoration of possession or the
payment of the just compensation.

The PHC and the AG, through the then Solicitor General, the principal defense relied upon was
that the suit in reality was one against the government and therefore should be dismissed, no consent
having been shown.

The lower court decided in favor of the PHC and AG contending that since the PHC and AG are
sued in their official capacity, the action is one Against the National Government wo should be a party to
the case and only if it has given consent.

ISSUE:

Whether or not plaintiffs can sue defendants PHC and AG, in their capacity as public officials without
thereby violating the principle of government immunity from suit without its consent.

RESOLUTION:

Yes, Ministerio and Sadaya can sue PHC and AC without violating the principle of government
immunity from suit without its consent.

The lower court should have passed upon the claim of Ministerio and Sadaya, for the recovery
of the possession of the disputed lot, since no proceeding for eminent domain, as required by the then
Code of Civil Procedure, was instituted.
 The doctrine of governmental immunity from suit cannot be an instrument for perpetrating an
injustice on a citizen. If there were an observance of procedural regularity, petitioners would not be in
sad plaint they are now. It is unthinkable then that precisely there was a failure on what the law requires
and the petitioners has the right to demand from the Government what is due to them.

It is not too much to say that when the government takes any property for public use, which is
conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that
it submits to the jurisdiction of a court. There is no thought then that the doctrine of immunity from suit
could still be appropriately invoked.

The lower court decision is reversed so that the court may proceed with the complaint and
determine the compensation to which petitioners are entitled, taking into account the ruling in the
above Alfonso case: "As to the value of the property, although the plaintiff claims the present market
value thereof, the rule is that to determine due compensation for lands appropriated by the
Government, the basis should be the price or value at the time that it was taken from the owner and
appropriated by the Government.”

Case No. 19: Arigo et.al v Swift, et.al 735 SCRA102

1. State Immunity: Warships and other ships operated for non-commercial purposes enjoys immunity
from suits;

2. Waiver of State Immunity in the Visiting Forces Agreement does not apply to special civil actions.
3. The doctrine of immunity from suit will not apply and may not be invoked where the public official is
being sued in his private and personal capacity as an ordinary citizen

Facts:

While transiting the Sulu Sea, the USS Guardian, a US Navy ship, ran aground on the South Shoal of
Tubbataha Reefs, a restricted and marine protected area. The US Government are willing to provide
compensation for the damaged caused and undertook salvage operations to remove the grounded ship
from the coral reef.

The US respondents, Swift et. al. were sued in their official capacity as commanding officers of the US
Navy who had control and supervision over the USS Guardian and its crew. The alleged act or omission
resulting in the unfortunate grounding of the USS Guardian on the Tubbatha Reef National Park was
committed while they were performing official military duties.

Petitioners Arigo et. Al. filed a petition for the issuance of a Writ of Kalikasan alleging that the grounding,
salvaging and post-salvaging operations of the USS Guardian violated their constitutional rights to a
balanced and healthful ecology since these events caused and continue to cause environmental damage
of such magnitude as to affect the provinces sorrounding the Tubbataha Reefs. They argue that there is
a waiver of immunity from suit found in the Visiting Forces Agreement (VFA). Likewise, they invoke
federal statutes in the US under which agencies of the US have statutorily waived their immunity to any
action. Even under the common law tort claims, petitioners asseverate that the US respondents are
liable for negligence, trespass and nuisance. Further, petitioners assail certain provisions of the Visiting
Forces Agreement (VFA) which they want the Court to nullify for being unconstitutional.

Issues and Rulings

Whether warships and other government ships enjoy o perating for non-commercial purposes enjoy
immunity from suits

Yes, Justice Carpio explained that while historically, warships enjoy sovereign immunity from suit as
extensions of their flag State, Art. 31 of the UNCLOS creates an exception to this rule in cases where
they fail to comply with the rules and regulations of the coastal State regarding passage through the
latter's internal waters and the territorial sea.

Article 30
Non-compliance by warships with the laws and regulations of the coastal State

If any warship does not comply with the laws and regulations of the coastal State concerning passage
through the territorial sea and disregards any request for compliance therewith which is made to it, the
coastal State may require it to leave the territorial sea immediately.

Article 31
Responsibility of the flag State for damage caused by a warship or other government ship operated for
non-commercial purposes

The flag State shall bear international responsibility for any loss or damage to the coastal State resulting
from the non-compliance by a warship or other government ship operated for non-commercial purposes
with the laws and regulations of the coastal State concerning passage through the territorial sea or with
the provisions of this Convention or other rules of international law.

Article 32
Immunities of warships and other government ships operated for non-commercial purposes

With such exceptions as are contained in subsection A and in articles 30 and 31, nothing in this
Convention affects the immunities of warships and other government ships operated for non-
commercial purposes.

A foreign warship's unauthorized entry into the Philippine’s internal waters with resulting damage to
marine resources is one situation in which the above provisions may apply. However, the offending
warship is a non-party to the UNCLOS, as in this case, the US. The Supreme Court concur with Justice
Carpio's view that non-membership in the UNCLOS does not mean that the US will disregard the rights
of the Philippines as a Coastal State over its internal waters and territorial sea. It is expected for US to
bear "international responsibility" under Art. 31 in connection with the USS Guardian grounding which
adversely affected the Tubbataha reefs. 
Whether the US Government has given its consent to be sued through the VFA.

No, the waiver of State immunity under the VFA pertains only to criminal jurisdiction and not to
special civil actions. It can be inferred from Section 17, Rule 7 of the Rules that a criminal case against a
person charged with a violation of an environmental law is to be filed separately:

SEC. 17. Institution of separate actions.-The filing of a petition for the issuance of the writ of kalikasan
shall not preclude the filing of separate civil, criminal or administrative actions.

  A ruling on the application or non-application of criminal jurisdiction provisions of the VFA to US

personnel who may be found responsible for the grounding of the USS Guardian, would be premature
and beyond the province of a petition for a Writ of Kalikasan.Hence, contrary to the petitioners’ claim,
the US Government could not be deemed to have waived its immunity from suit.

Whether the US respondents can be sued while in the performance of their official capacity

No. The doctrine of immunity from suit will not apply and may not be invoked where the public
official is being sued in his private and personal capacity as an ordinary citizen. The cloak of protection
afforded the officers and agents of the government is removed the moment they are sued in their
individual capacity. This situation usually arises where the public official acts without authority or in
excess of the powers vested in him.

It is a well-settled principle of law that a public official may be liable in his personal private capacity
for whatever damage he may have caused by his act done with malice and in bad faith, or beyond the
scope of his authority or jurisdiction. In this case, the US respondents were sued in their official capacity
as commanding officers of the US Navy who had control and supervision over the USS Guardian and its
crew. The alleged act or omission resulting in the unfortunate grounding of the USS Guardian was
committed while they we’re performing official military duties. Considering that the satisfaction of a
judgment against said officials will require remedial actions and appropriation of funds by the US
government, the suit is deemed to be one against the US itself. The principle of State immunity
therefore bars the exercise of jurisdiction by the Supreme Court over the persons of respondents Swift,
Rice and Robling..

  Suing a representative of a state is believed to be, in effect, suing the state itself. The
proscription is not accorded for the benefit of an individual but for the State, in whose service he is,
under the maxim -par in parem, non habet imperium - that all states are sovereign equals and cannot
assert jurisdiction over one another. The implication, in broad terms, is that if the judgment against an
official would require the state itself to perform an affirmative act to satisfy the award, such as the
appropriation of the amount needed to pay the damages decreed against him, the suit must be
regarded as being against the state itself, although it has not been formally impleaded.

*******Hello. Please take note nalang po of the one below since na-mention sya sa case:

This traditional rule of State immunity which exempts a State from being sued in the courts of another
State without the former's consent or waiver has evolved into a restrictive doctrine which distinguishes
sovereign and governmental acts (Jure imperil) from private, commercial and proprietary acts (Jure
gestionis). Under the restrictive rule of State immunity, State immunity extends only to acts Jure
imperii. The restrictive application of State immunity is proper only when the proceedings arise out of
commercial transactions of the foreign sovereign, its commercial activities or economic affairs.

Case No. 20: USA vs. Ruiz 136 SCRA 487

Doctrine:

The activities of a sovereign must be distinguished as governmental/jure imperri and

private/commercial/proprietary/jure gestionis.

Also note:

Restrictive application of State Immunity – A state may be said to have descended to the level of an
individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into
business contracts.

Facts:

At times material to this case, the United States of America had a naval base in Subic, Zambales. The
base was one of those provided in the Military Bases Agreement between the Philippines and the United
States.

Sometime in May, 1972, the United States invited the submission of bids for the following projects

1. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.

2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to shoreline revetment,
NAVBASE Subic; and repair to Leyte Wharf approach, NAVBASE Subic Bay, Philippines.

Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequent thereto, the
company received from the United States two telegrams requesting it to confirm its price proposals and
for the name of its bonding company. The company complied with the requests. [In its complaint, the
company alleges that the United States had accepted its bids because "A request to confirm a price
proposal confirms the acceptance of a bid pursuant to defendant United States' bidding practices."
(Rollo, p. 30.) The truth of this allegation has not been tested because the case has not reached the trial
stage.]

In June, 1972, the company received a letter which was signed by Wilham I. Collins, Director, Contracts
Division, Naval Facilities Engineering Command, Southwest Pacific, Department of the Navy of the
United States, who is one of the petitioners herein. The letter said that the company did not qualify to
receive an award for the projects because of its previous unsatisfactory performance rating on a repair
contract for the sea wall at the boat landings of the U.S. Naval Station in Subic Bay. The letter further
said that the projects had been awarded to third parties. In the abovementioned Civil Case No. 779-M,
the company sued the United States of America and Messrs. James E. Galloway, William I. Collins and
Robert Gohier all members of the Engineering Command of the U.S. Navy. The complaint is to order the
defendants to allow the plaintiff to perform the work on the projects and, in the event that specific
performance was no longer possible, to order the defendants to pay damages. The company also asked
for the issuance of a writ of preliminary injunction to restrain the defendants from entering into
contracts with third parties for work on the projects.

The defendants entered their special appearance for the purpose only of questioning the jurisdiction of
this court over the subject matter of the complaint and the persons of defendants, the subject matter of
the complaint being acts and omissions of the individual defendants as agents of defendant United
States of America, a foreign sovereign which has not given her consent to this suit or any other suit for
the causes of action asserted in the complaint."

Issue:

Will the doctrine of immunity from suit be followed? (Because they are asserting that a state is immune
from suit in the courts of another state without its consent or waive. This rule is a necessary
consequence of the principles of independence and equality of States)

Resolution:

The traditional rule of State immunity exempts a State from being sued in the courts of another State
without its consent or waiver. This rule is a necessary consequence of the principles of independence
and equality of States. However, the rules of International Law are not petrified; they are constantly
developing and evolving. And because the activities of states have multiplied, it has been necessary to
distinguish them-between sovereign and governmental acts (jure imperii) and private, commercial and
proprietary acts (jure gestionis). The result is that State immunity now extends only to acts jure imperil
The restrictive application of State immunity is now the rule in the United States, the United Kingdom
and other states in western Europe. (See Coquia and Defensor Santiago, Public International Law, pp.
207-209 [1984].)

The restrictive application of State immunity is proper only when the proceedings arise out of
commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated
differently, a State may be said to have descended to the level of an individual and can thus be deemed
to have tacitly given its consent to be sued only when it enters into business contracts. It does not apply
where the contract relates to the exercise of its sovereign functions. In this case the projects are an
integral part of the naval base which is devoted to the defense of both the United States and the
Philippines, indisputably a function of the government of the highest order; they are not utilized for nor
dedicated to commercial or business purposes.

That the correct test for the application of State immunity is not the conclusion of a contract by a State
but the legal nature of the act.
 Case No. 21: Buisan vs. COA G.R. No. 212376, January 31,2017
The main issue is about Forum Shopping (Remedial), laches and prescription (Remedial), and Grave
Abuse of Discretion. You can remove the Remedial Law part if you want to.

Political Law: The case talks about the Doctrine of Non-Suability of State, wherein a governmental entity
(DPWH) is protected from claims of damages.

Political Law: The case also talks about the concept of checks and balances, and the basis of the Doctrine
of Separation of Power as to the functions of COA.
(Out of topic from State Immunity from Suit, Maybe…)

FACTS:

In 1989, the Department of Public Works and Highways (DPWH) undertook a construction of the
Liguasan Cut-off hannel (Project) in Tunggol, Maguindanao to minimize the perennial problem of
flooding in the area. In April 2001, the DPWH received various claims from land owners for damages
allegedly caused to their properties, crops and improvements by the premature opening of the Project.

The Regional Director (RD) of DPWH investigated the claims with the Technical Working Group
(TWG) which, in 2004, recommended to pay just compensation to the claimants. The TWG noted that
since the event occurred in 1989, it could not account physically the actual quantity of the damaged
crops and properties.

In 2006, an ad hoc committee was created to determine the legality and propriety of the claims.
Due to the considerable lapse of time and the insufficiency of evidence, no final resolution was made by
the DPWH. The claims were returned to the claimants, considered to be under the jurisdiction of the
Commission on Audit (COA) pursuant to Rule VIII of the 2009 Revised Rules of Procedure of the COA.

April 2010, the petitioners (Buisan et al.), represented by Mayor Bai Annie C. Montawal
(Montawal), filed a petition with the COA, praying that the DPWH be ordered to pay the petitioners the
sum of ₱122,051,850.00 as compensation for their damaged crops, properties and improvements.

September 2010, Buisan filed a Motion to Dismiss the Petition alleging that Montawal was not
authorized to represent them. In fact, Buisan and the other claimants filed a separate petition with the
COA based on that same money claim.

The DPWH averred that the petitioners (Buisan et al.) failed to establish that they are the
owners of crops and properties allegedly damaged, and that the damage was caused by the construction
of the Project. Moreover, the DPWH asserted that the Buisan’s cause of action had already prescribed. 

The COA denied the money claims of the petitioners due to their failure to file their money
claims within a reasonable time, they are deemed to have committed laches. And the cause of action
had already prescribed in view of Article 1146 of the Civil Code. 

The petitioners (Buisan et al.) filed a motion for reconsideration, but denied by the COA for lack
of merit.
 ISSUES:

(1) Political Law Issue - Whether DPWH can be sued for money claims
(2) Political Law Issue – Whether the COA gravely abused its discretion in finding that the petitioner’s
claim was barred by laches and prescription.
(3) Remedial Law Issue (Main) - Whether the petitioner’s claim was barred by laches and prescription.
(4) Remedial Law Issue (Main) - Whether the petitioners failed to comply with the rules on certification
against forum shopping.

RULING:

(1) Whether DPWH can be sued for money claims.

No, the Doctrine of Non-Suability of State insulates the DPWH, a governmental entity, from
claims of damages.

The State cannot be sued without its consent.  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. The rule, in any case, is not absolute for it does not say that the
State may not be sued under any circumstances. The doctrine only conveys that "the state may not be
sued without its consent;" its clear import then is that the State may at times be sued.  Suits filed
against government agencies may either be against incorporated or unincorporated agencies. In case of
incorporated agencies, its suability depends upon whether its own organic act specifically provides
that it can sue and be sued in Court. 

The DPWH exercises governmental functions that effectively insulate it from any suit, much less
from any monetary liability. The construction of the Project which was for the purpose of minimizing the
perennial problem of flood, is well within the powers and functions of the DPWH as mandated by the
Administrative Code of 1997.

The Doctrine of Non-Suability clothes the DPWH from being held responsible for alleged
damages it performed in consonance with its mandated duty. Nowhere does it appear in the petition
that the State has given its consent, expressly or impliedly, to be sued before the courts. The failure to
allege the existence of the State's consent to be sued in the complaint is a fatal defect, and on this basis
alone, should cause the dismissal of the complaint.

(Again…this Political Law Issue is outside the topic of State Immunity from suit.)
(2) Whether the COA gravely abused its discretion in finding that the petitioner’s claim was barred by
laches and prescription.
No, COA did not abuse its discretion in denying the petitioners' claims for damages against the
DPWH. The COA is endowed with enough latitude to determine, prevent, and disallow irregular,
unnecessary, excessive, extravagant or unconscionable expenditures of government funds. It is tasked
to be vigilant and conscientious in safeguarding the proper use of the government's and, ultimately, the
people's property. The exercise of its general audit power is among the constitutional mechanisms
that gives life to the check and balance system inherent in our form of government. 
 In denying the petitioners' money claims against the DPWH, the COA did not abuse the exercise
of its discretion as its denial was grounded on facts and circumstances that would warrant such denial
arising from their observation of the claims. The Commission, recommended the dismissal of the
Petition.

The Court finds no grave abuse of discretion on the part of COA in denying the petitioners'
money claims for failure to present substantial evidence to prove that their properties were damaged by
floods due to the premature opening of the Project of the DPWH. The inconsistencies and discrepancies
in the evidence presented by the petitioners backed by the findings of COA lead only to one inescapable
conclusion: that there is no substantial evidence to prove the petitioners' claims that would render the
DPWH or the State liable for the amount claimed.

Finally, it is the general policy of the Court to sustain the decision of administrative authorities,
especially one that was constitutionally created like COA, not only on the basis of the doctrine of
separation of powers, but also of their presumed expertise in the laws they are entrusted to enforce.
The findings of administrative agencies are accorded not only respect but also finality when the decision
and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of
discretion. 

Remedial Law Issues (Main)

(3) Whether the petitioner’s claim was barred by laches and prescription.
Yes, the petitioners' cause of action has been barred by prescription and laches on the ground
that the petitioners filed their money claims only on 2014, or 15 years after their cause of action arose in
1989. Even it may be argued that the petitioners have a cause of action against the DPWH, the same has
already prescribed.

ART. 1146. The following actions must be instituted within four years: (1) Upon an injury to the
rights of the plaintiff; (2)  Upon a quasi-delict.

The petitioners' money claims (2004; even in 2001) had already prescribed. Solicitor General
said, "it will be the height of injustice for respondent DPWH to be confronted with stale claims, where
verification on the plausibility of the allegations remains difficult, either because the condition of the
alleged inundation of crops has changed, or the physical impossibility of accounting for the lost and
damaged crops due to the considerable lapse of time."

Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence could or should have been done earlier. Laches has set in because of:
(1) the premature opening by the DPWH of the Project allegedly causing flash floods, and damaging the
petitioners' properties took place in 1989 or even in 1992; (2) the petitioners took 15 years to assert
their rights when they formally filed a complaint in 2004 against the DPWH. (3) As the petitioners failed
to file a formal suit for their claims before the COA, there is an apparent lack of notice that would give
the DPWH the opportunity to defend itself.

(4) Whether the petitioners failed to comply with the rules on certification against forum shopping.
Yes, the petition failed to comply with the rules on certification against forum shopping. The
Rules of Court requires that in a petition for review of judgments and final orders or resolutions of COA,
the petition should be verified and contain a sworn certification against forum shopping.
 The failure of the petitioner to comply with the requirements shall be sufficient ground for the
dismissal of the petition. The certification against forum shopping was signed by Montawal, the mayor. 
Montawal's legal capacity to sue on behalf of the petitioners is questionable, considering that her
authority to represent the claimants was even assailed by the petitioners, when they filed with the COA
a Motion to Dismiss the Petition filed therein by Montawal.

In the case of natural persons, the rule requires the parties themselves to sign the certification
against forum shopping. The reason for such requirement is that the petitioner himself knows better
than anyone else whether a separate case has been filed or pending which involves substantially the
same issues.  The filing of this petition was neither signed by the petitioners nor their counsel, but by the
mayor who is not even one of the petitioners in this case.