9/30/2020 Document

The fact that a non-corporate government entity performs a function proprietary in nature does not necessarily result in its being
suable. If said non-governmental function is undertaken as an incident to its governmental function, there is no waiver thereby of
the sovereign immunity from suit extended to such government entity.
xxx xxx xxx
The Bureau of Customs, to repeat, is part of the Department of Finance (Sec. 81, Rev. Adm. Code), with no personality of its
own apart from that of the national government. Its primary function is governmental, that of assessing and collecting lawful
revenues from imported articles and all other tariff and customs duties, fees, charges, fines and penalties (Sec. 602, R.A. 1937).
To this function, arrastre service is a necessary incident.
xxx xxx xxx
Clearly, therefore, although said arrastre function may be deemed proprietary, it is a necessary incident of the primary and
governmental function of the Bureau of Customs, so that engaging in the same does not necessarily render said Bureau liable to
suit. For otherwise, it could not perform its governmental function without necessarily exposing itself to suit. Sovereign
immunity, granted as to the end, should not be denied as to the necessary means to that end.
xxx xxx xxx
It must be remembered that statutory provisions waiving State immunity from suit are strictly construed and that waiver of
immunity, being in derogation of sovereignty, will not be lightly inferred. (49 Am. Jur., States, Territories and Dependencies, Sec.
96, p. 314; Petty vs. Tennessee-Missouri Bridge Co., 359 U.S. 275, 3 L. Ed. 804, 79 S. Ct. 785). From the provision authorizing
the Bureau of Customs to lease arrastre operations to private parties, We see no authority to sue the said Bureau in the instances
where it undertakes to conduct said operation itself. The Bureau of Customs, acting as part of the machinery of the national
government in the operation of the arrastre service, pursuant to express legislative mandate and as a necessary incident of its
prime governmental function, is immune from suit, there being no statute to the contrary.

(Domestic Insurance Company of the Philippines vs. Republic of the Philippines, GR L-29362;9/27/1968

The immunity of the State from suit, known also as the doctrine of sovereign immunity or non-suability of the State, is expressly
provided in Article XVI of the 1987 Constitution which states:

Section 3. The State may not be sued without its consent.

In United States of America v. Judge Guinto, we discussed the principle of state immunity from suit, as follows:
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. x x x.

Even without such affirmation, we would still be bound by the generally accepted principles of international law under the
doctrine of incorporation. Under this doctrine, as accepted by the majority of states, such principles are deemed incorporated
in the law of every civilized state as a condition and consequence of its membership in the society of nations. Upon its
admission to such society, the state is automatically obligated to comply with these principles in its relations with other states.

https://unc.blackboard.com/ultra/courses/_1510_1/outline/edit/document/_54835_1?courseId=_1510_1 1/5
9/30/2020 Document

As applied to the local state, the doctrine of state immunity is based on the justification given by Justice Holmes that ''there
can be no legal right against the authority which makes the law on which the right depends." [Kawanakoa v. Polybank, 205
U.S. 349] There are other practical reasons for the enforcement of the doctrine. In the case of the foreign state sought to be
impleaded in the local jurisdiction, the added inhibition is expressed in the maxim par in parem, non habet imperium. All
states are sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would, in the language of
a celebrated case, "unduly vex the peace of nations." [De Haber v. Queen of Portugal, 17 Q. B. 171]

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. [Garcia v. Chief of Staff, 16 SCRA 120] In such a situation, the state
may move to dismiss the complaint on the ground that it has been filed without its consent.19 (Emphasis supplied.)

In the case of Minucher v. Court of Appeals, 20 we further expounded on the immunity of foreign states from the jurisdiction of
local courts, as follows:

The precept that a State cannot be sued in the courts of a foreign state is a long-standing rule of customary international
law then closely identified with the personal immunity of a foreign sovereign from suit and, with the emergence of democratic
states, made to attach not just to the person of the head of state, or his representative, but also distinctly to the state itself in its
sovereign capacity. If the acts giving rise to a suit arc those of a foreign government done by its foreign agent, although not
necessarily a diplomatic personage, but acting in his official capacity, the complaint could be barred by the immunity of the
foreign sovereign from suit without its consent. 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. (Emphasis supplied.)

In the same case we also mentioned that in the case of diplomatic immunity, the privilege is not an immunity from the
observance of the law of the territorial sovereign or from ensuing legal liability; it is, rather, an immunity from the exercise of
territorial jurisdiction.

In United States of America v. Judge Guinto, one of the consolidated cases therein involved a Filipino employed at Clark Air
Base who was arrested following a buy-bust operation conducted by two officers of the US Air Force, and was eventually
dismissed from his employment when he was charged in court for violation of R.A. No. 6425. In a complaint for damages filed
by the said employee against the military officers, the latter moved to dismiss the case on the ground that the suit was against the
US Government which had not given its consent. The RTC denied the motion but on a petition for certiorari and prohibition filed
before this Court, we reversed the RTC and dismissed the complaint. We held that petitioners US military officers were acting in
the exercise of their official functions when they conducted the buy-bust operation against the complainant and thereafter
testified against him at his trial. It follows that for discharging their duties as agents of the United States, they cannot be directly
impleaded for acts imputable to their principal, which has not given its consent to be sued.

https://unc.blackboard.com/ultra/courses/_1510_1/outline/edit/document/_54835_1?courseId=_1510_1 2/5
9/30/2020 Document

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.

In Shauf v. Court of Appeals, we discussed the limitations of the State immunity principle, thus:

It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to
the rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications, et al. vs.
Aligaen, etc., et al. : "Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government officials
or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or
violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from
suit. In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State
department on the ground that, while claiming to act for the State, he violates or invades the personal and property rights 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." The rationale for this ruling is that the
doctrine of state immunity cannot be used as an instrument for perpetrating an injustice.
xxxx
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. (Emphasis supplied.) 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 on the TRNP was committed while they were 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 this Court
over the persons of respondents Swift, Rice and Robling.

(Most Rev. Pedro Arigo, et.al vs. Scott H. Swift, et.al GR.206510/ 9/16/2014

In Republic of Indonesia v. Vinzon,[we recognized the principle of sovereign independence and equality as part of the law of the
land. We used this principle to justify the recognition of the principle of sovereign immunity which exempts the State - both our
Government and foreign governments - from suit. We held:

International law is founded largely upon the principles of reciprocity, comity, independence, and equality of States which were
adopted as part of the law of our land under Article II, Section 2 of the 1987 Constitution. The rule that a State may not be sued
without its consent is a necessary consequence of the principles of independence and equality of States. As enunciated
in Sanders v. Veridiano II, the practical justification for the doctrine of sovereign immunity is that there can be no legal right

https://unc.blackboard.com/ultra/courses/_1510_1/outline/edit/document/_54835_1?courseId=_1510_1 3/5
9/30/2020 Document

against the authority that makes the law on which the right depends. In the case of foreign States, the rule is derived from the
principle of the sovereign equality of States, as expressed in the maxim par in parem non habet imperium. All states are
sovereign equals and cannot assert jurisdiction over one another. A contrary attitude would "unduly vex the peace of nations."

Our recognition of sovereign immunity, however, has never been unqualified. While we recognized the principles of
independence and equality of States to justify a State's sovereign immunity from suit, we also restricted state immunity to acts jus
imperii, or public acts. We said that once a State enters into commercial transactions (jus gestionis), then it descends to the level
of a private individual, and is thus not immune from the resulting liability and consequences of its actions.[104]

By this recognition, we acknowledge that a foreign government acting in its jus imperii function cannot be held liable in a
Philippine court. Philippine courts, as part of the Philippine government, cannot and should not take jurisdiction over cases
involving the public acts of a foreign government. Taking jurisdiction would amount to authority over a foreign government, and
would thus violate the principle of sovereign independence and equality.[105]

This recognition is altogether different from exempting governments whose agents are in the Philippines from complying with
our domestic laws.[106] We have yet to declare in a case that the principle of sovereign independence and equality exempts
agents of foreign governments from compliance with the application of Philippine domestic law.

(ASSOCIATION OF MEDICAL CLINICS FOR OVERSEAS WORKERS, INC., (AMCOW), REPRESENTED HEREIN BY
ITS PRESIDENT, DR. ROLANDO VILLOTE, PETITIONER, VS. GCC APPROVED MEDICAL CENTERS
ASSOCIATION, INC. AND CHRISTIAN CANGCO, RESPONDENTS. GR. No.207132; December 6, 2016.

In order to resolve the issue of the propriety of the garnishment against petitioner’s funds and personal properties, there is a need
to first determine its true character as a government entity. Generally, funds and properties of the government cannot be the
object of garnishment proceedings even if the consent to be sued had been previously granted and the state liability adjudged. 37

The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may
limit claimant’s action "only up to the completion of proceedings anterior to the stage of execution" and that the power of the
Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution
or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds
must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State
cannot be allowed to be paralyzed or disrupted by the diversion of public Funds from their legitimate and specific objects, as
appropriated by law. 38

However, if the funds belong to a public corporation or a government-owned or controlled corporation which is clothed with a
personality of its own, separate and distinct from that of the government, then its funds are not exempt from garnishment. This is
so because when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like
any other corporation.

National Housing Authority vs. Heirs of Isidro Quivelondo GR 154411/ 8/11/2003

https://unc.blackboard.com/ultra/courses/_1510_1/outline/edit/document/_54835_1?courseId=_1510_1 4/5
9/30/2020 Document

n Holy See, this Court reiterated the oft-cited doctrine that the determination by the Executive that an entity is entitled to
sovereign or diplomatic immunity is a political question conclusive upon the courts, to wit:
In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign
court, it requests the Foreign Office of the state where it is sued to convey to the court that said defendant is entitled to immunity.
xxx xxx xxx
In the Philippines, the practice is for the foreign government or the international organization to first secure an executive
endorsement of its claim of sovereign or diplomatic immunity. But how the Philippine Foreign Office conveys its endorsement
to the courts varies. In International Catholic Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign
Affairs just sent a letter directly to the Secretary of Labor and Employment, informing the latter that the respondent-employer
could not be sued because it enjoyed diplomatic immunity. In World Health Organization v. Aquino, 48 SCRA 242 (1972), the
Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy
asked the Secretary of Foreign Affairs to request the Solicitor General to make, in behalf of the Commander of the United States
Naval Base at Olongapo City, Zambales, a "suggestion" to respondent Judge. The Solicitor General embodied the "suggestion"
in a Manifestation and Memorandum as amicus curiae.
In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved with this Court to be allowed
to intervene on the side of petitioner. The Court allowed the said Department to file its memorandum in support of petitioner’s
claim of sovereign immunity.

In some cases, the defense of sovereign immunity was submitted directly to the local courts by the respondents through their
private counsels (Raquiza v. Bradford, 75 Phil. 50 [1945]; Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948];
United States of America v. Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign states bypass the
Foreign Office, the courts can inquire into the facts and make their own determination as to the nature of the acts and
transactions involved.43 (Emphasis supplied.)
The question now is whether any agency of the Executive Branch can make a determination of immunity from suit, which
may be considered as conclusive upon the courts. This Court, in Department of Foreign Affairs (DFA) v. National Labor
Relations Commission (NLRC), emphasized the DFA’s competence and authority to provide such necessary determination, to
wit:

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

(China National Machinery and Equipment Corporation vs. Santamaria, GR No. 185572 /02/02/2012)

https://unc.blackboard.com/ultra/courses/_1510_1/outline/edit/document/_54835_1?courseId=_1510_1 5/5