Atty.

Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG
Republic of the Philippines vs Villasor no doubt on that score. Thus: "A rule, which has never been seriously questioned, is that money
GR L-30671 in the hands of public officers, although it may be due government employees, is not liable to
November 28, 1973 the creditors of these employees in the process of garnishment. One reason is, that the State,
by virtue of its sovereignty, may not be sued in its own courts except by express authorization
by the Legislature, and to subject its officers to garnishment would be to permit indirectly what
FACTS is prohibited directly. Another reason is that moneys sought to be garnished, as long as they
1. On July 7, 1969, a decision was rendered in Special Proceedings No. 2156-R in favor of remain in the hands of the disbursing officer of the Government, belong to the latter, although
respondents P.J. Kiener Co., Ltd., Gavino Unchuan, and International Construction the defendant in garnishment may be entitled to a specific portion thereof. And still another
Corporation and against petitioner confirming the arbitration award in the amount of reason which covers both of the foregoing is that every consideration of public policy forbids
P1,712,396.40. it."
2. The award is for the satisfaction of a judgment against the Phlippine Government.
3. On June 24, 1969, respondent Honorable Guillermo Villasor issued an Order declaring the
decision final and executory.
CURRENT APPLICABLE CODAL PROVISIONS
4. Villasor directed the Sheriffs of Rizal Province, Quezon City as well as Manila to execute
said decision. Section 29 (1), Article VI, 1987 Constitution

5. The Provincial Sheriff of Rizal served Notices of Garnishment with several Banks, specially
on Philippine Veterans Bank and PNB.
6. The funds of the Armed Forces of the Philippines on deposit with Philippine Veterans Bank
and PNB are public funds duly appropriated and allocated for the payment of pensions of
retirees, pay and allowances of military and civilian personnel and for maintenance and
operations of the AFP.
7. Petitioner, on certiorari, filed prohibition proceedings against respondent Judge Villasor
for acting in excess of jurisdiction with grave abuse of discretion amounting to lack of
jurisdiction in granting the issuance of a Writ of Execution against the properties of the
AFP, hence the notices and garnishment are null and void.
No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
Section 16 (3), Rule 39, Rules of Court
When the writ of execution is issued in favor of the Republic of the Philippines, or any officer duly
representing it, the filing of such bond shall not be required, and in case the sheriff or levying officer is
sued for damages as a result of the levy, he shall be represented by the Solicitor General and if held liable
therefore, the actual damages adjudged by the court shall be paid by the National Treasurer out of such
funds as may be appropriated for the purpose.

ISSUE
1. Whether or not the writ of execution issued by respondent judge is valid
2. Whether or not the public funds can be seized under writs of execution or garnishment

RULING
1. No, the writ of execution issued by respondent judge is not valid since it violates the
constitutional provision that disbursements of public funds must be covered by the
corresponding appropriation as required by law.
The 1935 Constitution expressly provided: "The State may not be sued without its consent." A
corollary, both dictated by logic and sound sense from such a basic concept is that public funds
cannot be the object of a garnishment proceeding even if the consent to be sued had been
previously granted and the state liability adjudged. Thus in the recent case of Commissioner of
Public Highways v. San Diego, such a well-settled doctrine was restated in the opinion of Justice
Teehankee: "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." Such a principle applies even to an
attempted garnishment of a salary that had accrued in favor of an employee. Director of
Commerce and Industry v. Concepcion, speaks to that effect. Justice Malcolm as ponente left
Atty. Galleon USC College of Law and Governance
Republic of the Philippines
Supreme Court
Manila
SECOND DIVISION
G.R. No. L-30671. November 28, 1973
REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON. GUILLERMO P. VILLASOR, as Judge of the Court of
First Instance of Cebu, Branch I, THE PROVINCIAL-SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY,
and THE SHERIFF OF THE CITY OF MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P.J.
KIENER CO., LTD., GAVINO UNCHUAN, and INTERNATIONAL CONSTRUCTION
CORPORATION, respondents.
Solicitor General Felix V . Makasiar and Solicitor Bernardo P. Pardo for petitioner.
Andres T . Velarde & Marcelo B. Fernan for respondents.
DECISION
FERNANDO, J p:
The Republic of the Philippines in this certiorari and prohibition proceeding challenges the validity of an
order issued by respondent Judge Guillermo P.Villasor, then of the Court of First Instance of Cebu, Branch
I, declaring a decision final and executory and of an alias writ of execution directed against the funds of
the Armed Forces of the Philippines subsequently issued in pursuance thereof, the alleged ground being
excess of jurisdiction, or at the very least, grave abuse of discretion. As thus simply and tersely put, with
the facts being undisputed and the principle of law that calls for application indisputable, the outcome is
predictable. The Republic of the Philippines is entitled to the writs prayed for. Respondent Judge ought
not to have acted thus. The order thus impugned and the alias writ of execution must be nullified.
In the petition filed by the Republic of the Philippines on July 7, 1969, a summary of facts was set forth
thus: "7. On July 3, 1961, a decision was rendered in Special Proceedings No. 2156-R in favor of
respondents P. J. Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation, and
against the petitioner herein, confirming the arbitration award in the amount of P1,712,396.40, subject of
Special Proceedings. 8. On June 24, 1969, respondent Honorable Guillermo P. Villasor, issued an Order
declaring the aforestated decision of July 3, 1961 final and executory, directing the Sheriffs of Rizal
Province, Quezon City [as well as] Manila to execute the said decision. 9. Pursuant to the said Order dated
June 24, 1969, the corresponding Alias Writ of Execution [was issued] dated June 26, 1969. 10. On the
strength of the afore-mentioned Alias Writ of Execution dated June 26, 1969, the Provincial Sheriff of Rizal
(respondent herein) served notices of garnishment dated June 28, 1969 with several Banks, specially on
the `monies due the Armed Forces of the Philippines in the form of deposits, sufficient to cover the amount
mentioned in the said Writ of Execution'; the Philippine Veterans Bank received the same notice of
garnishment on June 30, 1969 11. The funds of the Armed Forces of the Philippines on deposit with the
Banks, particularly, with the Philippine Veterans Bank and the Philippine National Bank [or] their branches
are public funds duly appropriated and allocated for the payment of pensions of retirees, pay and
allowances of military and civilian personnel and for maintenance and operations of the Armed Forces of
the Philippines, as per Certification dated July 3, 1969 by the AFP Comptroller,The paragraph immediately
succeeding in such petition then alleged: "12. Respondent Judge, Honorable Guillermo P. Villasor, acted in
excess of jurisdiction [or] with grave abuse of discretion amounting to lack of jurisdiction in granting the
issuance of an alias writ of execution against the properties of the Armed Forces of the Philippines, hence,
the Alias Writ of Execution and notices of garnishment issued pursuant thereto are null and void." In the
answer filed by respondents, through counsel Andres T. Velarde and Marcelo B. Fernan, the facts set forth
were admitted with the only qualification being that the total award was in the amount of P2,372,331.40.
The Republic of the Philippines, as mentioned at the outset, did right in filing this certiorari and prohibition
proceeding. What was done by respondent Judge is not in conformity with the dictates of the Constitution.
LLB-1 Room EH308 SSDSG
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. It is readily understandable
why it must be so. In the classic formulation of Holmes: "A sovereign is exempt from suit, not because of
any formal conception or obsolete theory, but on the logical and practical ground that there can be no
legal right as against the authority that makes the law on which the right depends." Sociological
jurisprudence supplies an answer not dissimilar. So it was indicated in a recent decision, Providence
Washington Insurance Co. v. Republic of the Philippines, with its affirmation that "a continued adherence
to the doctrine of non-suability is not to be deplored for as against the inconvenience that may be caused
private parties, the loss of governmental efficiency and the obstacle to the performance of its multifarious
functions are far greater if such a fundamental principle were abandoned and the availability of judicial
remedy were not thus restricted. With the well known propensity on the part of our people to go to court,
at the least provocation, the loss of time and energy required to defend against law suits, in the absence
of such a basic principle that constitutes such an effective obstacle, could very well be imagined."
This fundamental postulate underlying the 1935 Constitution is now made explicit in the revised charter.
It is therein expressly provided: "The State may not be sued without its consent." A corollary, both dictated
by logic and sound sense from such a basic concept is that public funds cannot be the object of a
garnishment proceeding even if the consent to be sued had been previously granted and the state liability
adjudged. Thus in the recent case of Commissioner of Public Highways v. San Diego, such a well-settled
doctrine was restated in the opinion of Justice Teehankee: "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." Such a principle applies even to an attempted garnishment of a salary that had accrued in favor of
an employee. Director of Commerce and Industry v. Concepcion, speaks to that effect. Justice Malcolm
as ponente left no doubt on that score. Thus: "A rule, which has never been seriously questioned, is that
money in the hands of public officers, although it may be due government employees, is not liable to the
creditors of these employees in the process of garnishment. One reason is, that the State, by virtue of its
sovereignty, may not be sued in its own courts except by express authorization by the Legislature, and to
subject its officers to garnishment would be to permit indirectly what is prohibited directly. Another reason
is that moneys sought to be garnished, as long as they remain in the hands of the disbursing officer of the
Government, belong to the latter, although the defendant in garnishment may be entitled to a specific
portion thereof. And still another reason which covers both of the foregoing is that every consideration of
public policy forbids it."
In the light of the above, it is made abundantly clear why the Republic of the Philippines could rightfully
allege a legitimate grievance.
WHEREFORE, the writs of certiorari and prohibition are granted, nullifying and setting aside both the order
of June 24, 1969 declaring executory the decision of July 3, 1961 as well as the alias writ of execution
issued thereunder. The preliminary injunction issued by this Court on July 12, 1969 is hereby made
permanent.
Zaldivar, Antonio, Fernandez and Aquino, JJ ., concur.
Barredo, J ., did not take part.
DA vs NLRC
GR 104269
November 11, 1993
Atty. Galleon USC College of Law and Governance
FACTS
1. Petitioner Department of Agriculture (DA) and Sultan Security Agency entered into a contract
for security services to be provided by the latter to the said governmental entity. Pursuant to
their arrangements, guards were deployed by Sultan Security Agency in the various premises
of the DA.
2. Thereafter, several guards filed a complaint for underpayment of wages, nonpayment of 13th
month pay, uniform allowances, night shift differential pay, holiday pay, and overtime pay, as
well as for damages against the DA and the security agency.
3. The Labor Arbiter rendered a decision finding the DA jointly and severally liable with the
security agency for the payment of money claims of the complainant security guards. The DA
and the security agency did not appeal the decision. Thus, the decision became final and
executory.
4. The Labor Arbiter issued a writ of execution to enforce and execute the judgment against the
property of the DA and the security agency. Thereafter, the City Sheriff levied on execution the
motor vehicles of the DA and such were put under the custody of Zacharias Roa, the property
custodian of the petitioner, pending their sale at public auction or the final settlement of the
case, whichever would come first.
5. Petitioner filed petition for injunction, prohibition and mandamus, with prayer for preliminary
writ of injunction alleging, inter alia, that the writ issued was effected without the Labor Arbiter
having duly acquired jurisdiction over the petitioner, and that, therefore, the decision of the
Labor Arbiter was null and void and all actions pursuant thereto should be deemed equally
invalid and of no legal effect. The petitioner also pointed out that the attachment or seizure of
its property would hamper and jeopardize petitioner's governmental functions to the prejudice
of the public good.
6. NLRC ruled in favor of respondents and temporarily suspended the enforcement and execution
of the judgments against petitioner for a period of two (2) months, more or less, but not
extending beyond the last quarter of calendar year 1991 to enable petitioner to source and
raise funds to satisfy the judgment awards against it.
7. Hence the petition on certiorari.
8. Petitioner claims NLRC with grave abuse of discretion for refusing to quash the writ of
execution and that NLRC doesn't have jurisdiction over a money claim against the Department,
which, it claims, falls under the exclusive jurisdiction of the Commission on Audit. More
importantly, the petitioner asserts, the NLRC has disregarded the cardinal rule on the non-
suability of the State.
9. The private respondents, on the other hand, argue that the petitioner has impliedly waived its
immunity from suit by concluding a service contract with Sultan Security Agency.
.
ISSUE
1. Whether or not the DA can invoke state immunity as a defense
RULING
1. Yes, DA can invoke state immunity.
2. The basic postulate enshrined in the constitution that "the State may not be sued without its
consent," reflects nothing less than a recognition of the sovereign character of the State and
LLB-1 Room EH308 SSDSG
an express affirmation of the unwritten rule effectively insulating it from the jurisdiction of
courts. It is based on the very essence of sovereignty.
3. The rule, in any case, is not really absolute for it does not say that the state may not be sued
under any circumstance. On the contrary, as correctly phrased, the doctrine only conveys, "the
state may not be sued without its consent;" its clear import then is that the State may at
times be sued. The States' consent may be given either expressly or impliedly.
4. Express consent may be made through a general law or a special law. In this jurisdiction, the
general law waiving the immunity of the state from suit is found in Act No. 3083, where the
Philippine government "consents and submits to be sued upon any money claim involving
liability arising from contract, express or implied, which could serve as a basis of civil action
between private parties."
5. Implied consent, on the other hand, is conceded when the State itself commences litigation,
thus opening itself to a counterclaim or when it enters into a contract. In this situation, the
government is deemed to have descended to the level of the other contracting party and to
have divested itself of its sovereign immunity. This rule, relied upon by the NLRC and the
private respondents, is not, however, without qualification. Not all contracts entered into by
the government operate as a waiver of its non-suability; distinction must still be made
between one which is executed in the exercise of its sovereign functions and another which is
done in its proprietary capacity.
6. In the instant case, the Department of Agriculture has not pretended to have assumed a
capacity apart from its being a governmental entity when it entered into the questioned
contract; nor that it could have, in fact, performed any act proprietary in character. But, be that
as it may, the claims of private respondents, i.e., for underpayment of wages, holiday pay,
overtime pay and similar other items, arising from the Contract for Security Services, clearly
constitute money claims. Act No. 3083, aforecited, gives the consent of the State to be "sued
upon any moneyed claim involving liability arising from contract, express or implied, . . ."
Pursuant, however, to Commonwealth Act No. 327, as amended by Presidential Decree
("P.D.") No. 1445, the money claim should first be brought to the Commission on Audit.
7. We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327
and the Labor Code with respect to money claims against the State. The Labor Code, in relation
to Act No. 3083, provides the legal basis for the State liability but the prosecution,
enforcement or satisfaction thereof must still be pursued in accordance with the rules and
procedures laid down in C.A. No. 327, as amended by P.D. 1445.
8. When the State gives its consent to be sued, it does not thereby necessarily consent to an
unrestrained execution against it. Tersely put, when the State waives its immunity, all it does,
in effect, is to give the other party an opportunity to prove, if it can, that the State has a liability.
Disbursements of public funds must be covered by the correspondent appropriation as
required by law.
Republic of the Philippines
Supreme Court
Atty. Galleon USC College of Law and Governance
Manila
THIRD DIVISION
G.R. No. 104269. November 11, 1993
DEPARTMENT OF AGRICULTURE, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION, ET
AL., respondents.
Roy Lago Salcedo for private respondents.
SYLLABUS
I. CONSTITUTIONAL LAW; STATE IMMUNITY FROM SUIT; CONSTRUED. — The basic postulate
enshrined in the constitution that the State may not be sued without its consent," reflects
nothing less than a recognition of the sovereign character of the State and an express
affirmation of the unwritten rule effectively insulating it from the jurisdiction of courts. It is
based on the very essence of sovereignty. As has been aptly observed, by Justice Holmes, a
sovereign is exempt from suit, not because of any formal conception or obsolete theory, but
on the logical and practical ground that there can be no legal right as against the authority that
makes the law on which the right depends. True, the doctrine, not too infrequently, is derisively
called "the royal prerogative of dishonesty" because it grants the state the prerogative to
defeat any legitimate claim against it by simply invoking its non-suability. We have had occasion
to explain in its defense, however, that a continued adherence to the doctrine of non-suability
cannot be deplored, for the loss of governmental efficiency and the obstacle to the
performance of its multifarious functions would be far greater in severity than the
inconvenience that may be caused private parties, if such fundamental principle is to be
abandoned and the availability of judicial remedy is not to be accordingly restricted.
II. ID.; ID.; EXCEPTION ON NON-SUABILITY OF THE STATE. — The rule, in any case, is not really
absolute for it does not say that the state may not be sued under any circumstance. On the
contrary, as correctly phrased, the doctrine only conveys, "the state may not be sued without
its consent"; its clear import then is that the State may at times be sued. The States' consent
may be given either expressly or impliedly. Express consent may be made through a general
law or a special law. In this jurisdiction, the general law waiving the immunity of the state from
suit is found in Act No. 3083, where the Philippine government "consents and submits to be
sued upon any money claim involving liability arising from contract, express or implied, which
could serve as a basis of civil action between private parties." Implied consent, on the other
hand, is conceded when the State itself commences litigation, thus opening itself to a
counterclaim or when it enters into a contract. In this situation, the government is deemed to
have descended to the level of the other contracting party and to have divested itself of its
sovereign immunity.
III. ID.; ID.; ID.; IMPLIED CONSENT THROUGH CONTRACTS; QUALIFICATION. — Not all contracts
entered into by the government operate as a waiver of its non-suability; distinction must still
be made between one which is executed in the exercise of its sovereign function and another
which is done in its proprietary capacity. 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 contracts
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. (United States of America vs. Ruiz, 136 SCRA
487)
LLB-1 Room EH308 SSDSG
IV. ID.; ID.; ID.; ID.; CASE AT BAR. — In the instant case, the Department of Agriculture has not
pretended to have assumed a capacity apart from its being a governmental entity when it
entered into the contract on security services; nor that it could have, in fact, performed any act
proprietary in character. But, be that as it may, the claims of private respondents, i.e., for
underpayment of wages, holiday pay, overtime pay and similar other items, arising from the
Contract for Security Services, clearly constitute money claims. Act No. 3083, aforecited, gives
the consent of the State to be "sued upon any moneyed claim involving liability arising from
contract, express or implied, . . ."
V. ID.; ID.; ID.; ID.; MONEY CLAIMS AGAINST THE STATE; PROVISIONS OF COMMONWEALTH ACT
NO. 327 REQUIRING FILING OF CLAIMS WITH THE COMMISSION ON AUDIT NOT
INCONSISTENT WITH THE LABOR CODE. — Pursuant, however, to Commonwealth Act ("C.A.")
No. 327, as amended by Presidential Decree ("P.D.") No. 1445, the money claim should first be
brought to the Commission on Audit. (Carabao, Inc. vs. Agricultural Productivity Commission)
We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327
and the Labor Code with respect to money claims against the State. The Labor Code, in relation
to Act No. 3083, provides the legal basis for the State liability but the prosecution, enforcement
or satisfaction thereof must still be pursued in accordance with the rules and procedures laid
down in C.A. No. 327, as amended by P.D. 1445.
VI. ID.; ID.; CONSENT NOT SYNONYMOUS WITH LIABILITY; REQUISITE FOR LIABILITY TO ATTACH.
— When the State gives its consent to be sued, it does not thereby necessarily consent to an
unrestrained execution against it. Tersely put, when the State waives its immunity, all it does,
in effect, is to give the other party an opportunity to prove, if it can, that the State has a liability.
In Republic vs. Villasor this Court, in nullifying the issuance of an alias writ of execution directed
against the funds of the Armed Forces of the Philippines to satisfy a final and executory
judgment, has explained, thus — 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
correspondent 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.
DECISION
VITUG, J p:
For consideration are the incidents that flow from the familiar doctrine of non-suability of the state.
In this petition for certiorari, the Department of Agriculture seeks to nullify the Resolution, dated 27
November 1991, of the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro City,
denying the petition for injunction, prohibition and mandamus that prays to enjoin permanently
the NLRC's Regional Arbitration Branch X and Cagayan de Oro City Sheriff from enforcing the decision of
31 May 1991 of the Executive Labor Arbiter and from attaching and executing on petitioner's property.
The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into a contract on
01 April 1989 for security services to be provided by the latter to the said governmental entity. Save for
the increase in the monthly rate of the guards, the same terms and conditions were also made to apply to
another contract, dated 01 May 1990, between the same parties. Pursuant to their arrangements, guards
were deployed by Sultan Agency in the various premises of the petitioner.
On 13 September 1990, several guards of the Sultan Security Agency filed a complaint for underpayment
of wages, non-payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay
Atty. Galleon USC College of Law and Governance
and overtime pay, as well as for damages, before the Regional Arbitration Branch X of Cagayan de Oro
City, docketed as NLRC Case No. 10-09-00455-90 (or 10-10-00519-90, its original docket number), against
the Department of Agriculture and Sultan Security Agency.
The Executive Labor Arbiter rendered a decision on 31 May 1991, finding herein petitioner jointly and
severally liable with sultan Security Agency for the payment of the money claims, aggregating P266,483.91,
of the complainant security guards. The petitioner and Sultan Security Agency did not appeal the decision
of the Labor Arbiter. Thus, the decision became final and executory.
On 18 July 1991, the Labor Arbiter issued a writ of execution, 5 commanding the City Sheriff to enforce
and execute the judgment against the property of the two respondents. Forthwith, or on 19 July 1991, the
City Sheriff levied on execution the motor vehicles of the petitioner, i.e., one (1) unit Toyota Hi-Ace, one
(1) unit Toyota Mini Cruiser, and one (1) unit Toyota Crown. These units were put under the custody of
Zacharias Roa, the property custodian of the petitioner, pending their sale at public auction or the final
settlement of the case, whichever would come first.
A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of injunction, was
filed by the petitioner with the National Labor Relations Commission ("NLRC"), Cagayan de Oro,
alleging, inter alia, that the writ issued was effected without the Labor Arbiter having duly acquired
jurisdiction over the petitioner, and that, therefore, the decision of the Labor Arbiter was null and void
and all actions pursuant thereto should be deemed equally invalid and of no legal effect. The petitioner
also pointed out that the attachment or seizure of its property would hamper and jeopardize petitioner's
governmental functions to the prejudice of the public good.
On 27 November 1991, the NLRC promulgated its assailed resolution; viz:
WHEREFORE, premises considered, the following orders are issued:
1. The enforcement and execution of the judgments against petitioner
in NLRC RABX Cases Nos. 10-10-00455-90; 10-10-0481-90 and 10-10-
00519-90 are temporarily suspended for a period of two (2) months,
more or less, but not extending beyond the last quarter of calendar
year 1991 to enable petitioner to source and raise funds to satisfy the
judgment awards against it;
2. Meantime, petitioner is ordered and directed to source for funds
within the period above-stated and to deposit the sums of money
equivalent to the aggregate amount it has been adjudged to pay
jointly and severally with respondent Sultan Security Agency with the
Regional Arbitration Branch X, Cagayan de Oro City within the same
period for proper disposition;
3. In order to ensure compliance with this order, petitioner is likewise
directed to put up and post sufficient surety and supersede as bond
equivalent to at least to fifty (50%) percent of the total monetary
award issued by a reputable bonding company duly accredited by the
Supreme Court or by the Regional Trial court of Misamis Oriental to
answer for the satisfaction of the money claims in case of failure or
default on the part of petitioner to satisfy the money claims;
4. The City Sheriff is ordered to immediately release the properties of
petitioner levied on execution within ten (10) days from notice of the
posting of sufficient surety or supersede as bond as specified above.
In the meanwhile, petitioner is assessed to pay the costs and/or
LLB-1 Room EH308 SSDSG
expenses incurred by the City Sheriff, if any, in connection with the
execution of the judgments in the above-stated cases upon
presentation of the appropriate claims or vouchers and receipts by
the city Sheriff, subject to the conditions specified in the NLRC Sheriff,
subject to the conditions specified in the NLRC Manual of Instructions
for Sheriffs;
5. The right of any of the judgment debtors to claim reimbursement
against each other for any payments made in connection with the
satisfaction of the judgments herein is hereby recognized pursuant to
the ruling in the Eagle Security case, (supra). In case of dispute
between the judgment debtors, the Executive Labor Arbiter of the
Branch of origin may upon proper petition by any of the parties
conduct arbitration proceedings for the purpose and thereby render
his decision after due notice and hearings;
6. Finally, the petition for injunction is Dismissed for lack of basis. The
writ of preliminary injunction previously issued in Lifted and Set Aside
and in lieu thereof, a Temporary Stay of Execution is issued for a
period of two (2) months but not extending beyond the last quarter
of calendar year 1991, conditioned upon the posting of a surety or
supersede as bond by petitioner within ten (10) days from notice
pursuant to paragraph 3 of this disposition. The motion to admit the
complaint in intervention is Denied for lack of merit while the motion
to dismiss the petition filed by Duty Sheriff in Noted.
SO ORDERED."
In this petition for certiorari, the petitioner charges the NLRC with grave abuse of discretion for refusing
to quash the writ of execution. The petitioner faults the NLRC for assuming jurisdiction over a money claim
against the Department, which, it claims, falls under the exclusive jurisdiction of the Commission on Audit.
More importantly, the petitioner asserts, the NLRC has disregarded the cardinal rule on the non-suability
of the State.
The private respondents, on the other hand, argue that the petitioner has impliedly waived its immunity
from suit by concluding a service contract with Sultan Security Agency.
The basic postulate enshrined in the constitution that "the State may not be sued without its consent," 7
reflects nothing less than a recognition of the sovereign character of the State and an express affirmation
of the unwritten rule effectively insulating it from the jurisdiction of courts. It is based on the very essence
of sovereignty. As has been aptly observed, by Justice Holmes, a sovereign is exempt from suit, not because
of any formal conception or obsolete theory, but on the logical and practical ground that there can be no
legal right as against the authority that makes the law on which the right depends. True, the doctrine, not
too infrequently, is derisively called "the royal prerogative of dishonesty" because it grants the state the
prerogative to defeat any legitimate claim against it by simply invoking its non-suability. We have had
occasion to explain in its defense, however, that a continued adherence to the doctrine of non-suability
cannot be deplored, for the loss of governmental efficiency and the obstacle to the performance of its
multifarious functions would be far greater in severity than the inconvenience that may be caused private
parties, if such fundamental principle is to be abandoned and the availability of judicial remedy is not to
be accordingly restricted.
The rule, in any case, is not really absolute for it does not say that the state may not be sued under any
circumstance. On the contrary, as correctly phrased, the doctrine only conveys, "the state may not be sued
without its consent;" its clear import then is that the State may at times be sued. The States' consent may
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG
be given either expressly or impliedly. Express consent may be made through a general law or a special law waiving the State's immunity from suit, subject to its general limitation
law. In this jurisdiction, the general law waiving the immunity of the state from suit is found in Act No. expressed in Section 7 thereof that 'no execution shall issue upon any judgment
3083, where the Philippine government "consents and submits to be sued upon any money claim involving rendered by any Court against the Government of the (Philippines), and that the
liability arising from contract, express or implied, which could serve as a basis of civil action between conditions provided in Commonwealth Act 327 for filing money claims against
private parties." Implied consent, on the other hand, is conceded when the State itself commences the Government must be strictly observed.'
litigation, thus opening itself to a counterclaim or when it enters into a contract. In this situation, the
government is deemed to have descended to the level of the other contracting party and to have divested
We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327 and the
itself of its sovereign immunity. This rule, relied upon by the NLRC and the private respondents, is not,
Labor Code with respect to money claims against the State. The Labor Code, in relation to Act No. 3083,
however, without qualification. Not all contracts entered into by the government operate as a waiver of
provides the legal basis for the State liability but the prosecution, enforcement or satisfaction thereof must
its non-suability; distinction must still be made between one which is executed in the exercise of its
still be pursued in accordance with the rules and procedures laid down in C.A. No. 327, as amended by
sovereign functions and another which is done in its proprietary capacity.
P.D. 1445.

In United States of America vs. Ruiz, where the questioned transaction dealt with the improvements on
When the State gives its consent to be sued, it does not thereby necessarily consent to an unrestrained
the wharves in the naval installation at Subic Bay, we held:
execution against it. Tersely put, when the State waives its immunity, all it does, in effect, is to give the
other party an opportunity to prove, if it can, that the State has a liability. In Republic vs. Villasor this Court,
The traditional rule of immunity exempts a State from being sued in the courts of in nullifying the issuance of an alias writ of execution directed against the funds of the Armed Forces of
another State without its consent or waiver. This rule is a necessary consequence the Philippines to satisfy a final and executory judgment, has explained, thus —
of the principles of independence and equality of States. However, the rules of
International Law are not petrified; they are constantly developing and evolving.
The universal rule that where the State gives its consent to be sued by private
And because the activities of states have multiplied, it has been necessary to
parties either by general or special law, it may limit claimant's action "only up to
distinguish them — between sovereign and governmental acts ( jure imperii) and
the completion of proceedings anterior to the stage of execution" and that the
private, commercial and proprietary acts ( jure gestionis). The result is that State
power of the Courts ends when the judgment is rendered, since government funds
immunity now extends only to acts jure imperii. The restrictive application of
and properties may not be seized under writs of execution or garnishment to
State immunity is now the rule in the United States, the United Kingdom and
satisfy such judgments, is based on obvious considerations of public policy.
other states in Western Europe.
Disbursements of public funds must be covered by the correspondent
appropriation as required by law. The functions and public services rendered by
xxx xxx xxx 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.
The restrictive application of State immunity is proper only when the proceedings
arise out of commercial transactions of the foreign sovereign, its commercial WHEREFORE, the petition is GRANTED. The resolution, dated 27 November 1991, is hereby REVERSED and
activities or economic affairs. Stated differently, a State may be said to have SET ASIDE. The writ of execution directed against the property of the Department of Agriculture is
descended to the level of an individual and can thus be deemed to have tacitly nullified, and the public respondents are hereby enjoined permanently from doing, issuing and
given its consent to be sued only when it enters into business contracts. It does implementing any and all writs of execution issued pursuant to the decision rendered by the Labor Arbiter
not apply where the contracts relates to the exercise of its sovereign functions. against said petitioner.
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
SO ORDERED.
of the government of the highest order; they are not utilized for nor dedicated to
commercial or business purposes.
Feliciano, Bidin, Romero and Melo, JJ ., concur.
In the instant case, the Department of Agriculture has not pretended to have assumed a capacity
apart from its being a governmental entity when it entered into the questioned contract; nor that it
could have, in fact, performed any act proprietary in character.

But, be that as it may, the claims of private respondents, i.e., for underpayment of wages, holiday pay,
overtime pay and similar other items, arising from the Contract for Security Services, clearly constitute
money claims. Act No. 3083, aforecited, gives the consent of the State to be "sued upon any moneyed
claim involving liability arising from contract, express or implied, . . ." Pursuant, however,
to Commonwealth Act ("C.A.") No. 327, as amended by Presidential Decree ("P.D.") No. 1445, the money
Republic of the Philippines vs Feliciano
claim should first be brought to the Commission on Audit. Thus, in Carabao, Inc., vs. Agricultural
GR 70853
Productivity Commission, we ruled:
March 12, 1987

Claimants have to prosecute their money claims against the Government under
Commonwealth Act 327, stating that Act 3083 stands now merely as the general FACTS
Atty. Galleon USC College of Law and Governance
1. Private respondent Feliciano filed a complaint with the then CFI 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, consisting of four (4) lots situated in the Barrio of Salvacion,
Municipality of Tinambac, Camarines Sur.
2. Private respondent alleged:
a. that he bought the property in question from Victor Gardiola by virtue of a Contract
of Sale followed by a Deed of Absolute Sale;
b. that Gardiola had acquired the property by purchase from the heirs of Francisco
Abrazado whose title to the said property was evidenced by an informacion
posesoria that upon plaintiff's purchase of the property, he took actual possession
of the same, introduced various improvements therein and caused it to be surveyed
in July 1952, which survey was approved by the Director of Lands;
c. that on November 1, 1954, President Ramon Magsaysay issued Proclamation No. 90
reserving for settlement purposes, under the administration of the National
Resettlement and Rehabilitation Administration (NARRA), a tract of land situated in
the Municipalities of Tinambac and Siruma, Camarines Sur, after which the NARRA
and its successor agency, the Land Authority, started sub-dividing and distributing
the land to the settlers;
d. that the property in question, while located within the reservation established
under Proclamation No. 90, was the private property of plaintiff and should
therefore be excluded therefrom.
3. Private respondent prayed that he be declared the rightful and true owner of the property in
question; that his title of ownership based on informacion posesoria of his predecessor-in-
interest be declared legal valid and subsisting and that defendant be ordered to cancel and
nullify all awards to the settlers.
4. The trial court rendered its decision declaring Lot No. 1 be the private property of the Private
respondent, "being covered by a possessory information title in the name of his predecessor-
in-interest" and declaring said lot excluded from the NARRA settlement reservation, while rest
of the property be reverted to the public domain.
5. After several motions filed, the Solicitor General, on behalf of the Republic of the Philippines
filed its opposition, assailed the non-suability of the State and also on the ground that the
existence and/or authenticity of the purported possessory information title of the respondents'
predecessor-in-interest had not been demonstrated and that at any rate, the same is not
evidence of title, or if it is, its efficacy has been lost by prescription and laches. Trial court
dismissed case accordingly.
6. Private respondent appealed to Intermediate Appellate Court. IAC reversed trial court’s
decision and remanded case to the court.
7. Hence the petition.
ISSUE
1. Whether or not the Republic of the Philippines can invoke state immunity as a defense
RULING
1. Yes, state immunity can be invoked.
We find the petition meritorious. 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.
LLB-1 Room EH308 SSDSG
A suit for the recovery of property is not an action in rem, but an action in personam. It is an
action directed against a specific party or parties, and any judgment therein binds only such
party or parties. The complaint filed by plaintiff, the private respondent herein, is directed
against the Republic of the Philippines, represented by the Land Authority, a governmental
agency created by Republic Act No. 3844.
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."
Private respondent contends that the consent of petitioner may be read from the
Proclamation itself, when it established the reservation "subject to private rights, if any there
be."
We do not agree. 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.
Moreover, 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.
Neither is there merit in respondent's submission. which the respondent appellate court
sustained, on the basis of our decision in the Begosa case, that the present action is not a suit
against the State within the rule of State immunity from suit, because plaintiff does not seek
to divest the Government of any of its lands or its funds. It is contended that the complaint
involves land not owned by the State, but private land belonging to the plaintiff, hence the
Government is not being divested of any of its properties. The plaintiff is out to establish that
he is the owner of the land in question based, incidentally, on an informacion posesoria of
dubious value, and he seeks to establish his claim of ownership by suing the Republic of the
Philippines in an action in personam.
The inscription in the property registry of an informacion posesoria under the Spanish
Mortgage Law was a means provided by the law then in force in the Philippines prior to the
transfer of sovereignty from Spain to the United States of America, to record a claimant's actual
possession of a piece of land, established through an ex parte proceeding conducted in
accordance with prescribed rules. Such inscription merely furnishes, at best, prima facie
evidence of the fact that at the time the proceeding was held, the claimant was in possession
of the land under a claim of right as set forth in his application. The possessory information
could ripen into a record of ownership after the lapse of 20 years (later reduced to 10 years),
upon the fulfillment of the requisites prescribed in Article 393 of the Spanish Mortgage Law.
There is no showing in the case at bar that the informacion posesoria held by the
respondent had been converted into a record of ownership. Such possessory
information, therefore, remained at best mere prima facie evidence of possession.
Using this possessory information, the respondent could have applied for judicial
confirmation of imperfect title under the Public Land Act, which is an action in rem.
However, having failed to do so, it is rather late for him to pursue this avenue at
this time. Respondent must also contend, as the records disclose, with the fact
admitted by him and stated in the decision of the Court a quo that settlers have
Atty. Galleon USC College of Law and Governance
been occupying and cultivating the land in question since even before the outbreak
of the war, which puts in grave doubt his own claim of possession.
Worthy of note is the fact, as pointed out by the Solicitor General, that the
informacion posesoria registered in the Office of the Register of Deed of Camarines
Sur on September 23, 1952 was a "reconstituted" possessory information; it was
"reconstituted from the duplicate presented to this office (Register of Deeds) by Dr.
Pablo Feliciano," without the submission of proof that the alleged duplicate was
authentic or that the original thereof was lost.
Reconstitution can be validly made only in case of loss of the original. These
circumstances raise grave doubts as to the authenticity and validity of the
"informacion posesoria" relied upon by respondent Feliciano.
Adding to the dubiousness of said document is the fact that "possessory information
calls for an area of only 100 hectares," whereas the land claimed by respondent
Feliciano comprises 1,364.4177 hectares, later reduced to 701.9064 hectares.
Courts should be wary in accepting "possessory information" documents, as well as
other purportedly old Spanish titles, as proof of alleged ownership of land.
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
G.R. No. 70853. March 12, 1987
REPUBLIC OF THE PHILIPPINES, petitioner-appellee, vs. PABLO FELICIANO and INTERMEDIATE
APPELLATE COURT, respondents-appellants.
DECISION
YAP, J p:
Petitioner seeks the review of the decision of the Intermediate Appellate Court dated April 30, 1985
reversing the order of the Court of First Instance of Camarines Sur, Branch VI, dated August 21, 1980,
which dismissed the complaint of respondent Pablo Feliciano for recovery of ownership and possession of
a parcel of land on the ground of non-suability of the State.
The background of the present controversy may be briefly summarized as follows:
On January 22, 1970, 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, consisting of four (4) lots with an aggregate area of
1,364.4177 hectares, situated in the Barrio of Salvacion, Municipality of Tinambac, Camarines Sur. Plaintiff
alleged that he bought the property in question from Victor Gardiola by virtue of a Contract of Sale dated
May 31, 1952, followed by a Deed of Absolute Sale on October 30, 1954; that Gardiola had acquired the
property by purchase from the heirs of Francisco Abrazado whose title to the said property was evidenced
by an informacion posesoria; that upon plaintiff's purchase of the property, he took actual possession of
the same, introduced various improvements therein and caused it to be surveyed in July 1952, which
LLB-1 Room EH308 SSDSG
survey was approved by the Director of Lands on October 24, 1954; that on November 1, 1954, President
Ramon Magsaysay issued Proclamation No. 90 reserving for settlement purposes, under the
administration of the National Resettlement and Rehabilitation Administration (NARRA), a tract of land
situated in the Municipalities of Tinambac and Siruma, Camarines Sur, after which the NARRA and its
successor agency, the Land Authority, started subdividing and distributing the land to the settlers; that the
property in question, while located within the reservation established under Proclamation No. 90, was the
private property of plaintiff and should therefore be excluded therefrom. Plaintiff prayed that he be
declared the rightful and true owner of the property in question consisting of 1,364.4177 hectares; that
his title of ownership based on informacion posesoria of his predecessor-in-interest be declared legal, valid
and subsisting and that defendant be ordered to cancel and nullify all awards to the settlers.
The defendant, represented by the Land Authority, filed an answer, raising by way of affirmative defenses
lack of sufficient cause of action and prescription.
On August 29, 1970, the trial court, through Judge Rafael S. Sison, rendered a decision declaring Lot No. 1,
with an area of 701.9064 hectares, to be the private property of the plaintiff, "being covered by a
possessory information title in the name of his predecessor-in-interest" and declaring said lot excluded
from the NARRA settlement reservation. The court declared the rest of the property claimed by plaintiff,
i.e. Lots 2, 3 and 4, reverted to the public domain.
A motion to intervene and to set aside the decision of August 29, 1970 was filed by eighty-six (86) settlers,
together with the barrio council of Pag-asay, alleging among other things that intervenors had been in
possession of the land in question for more than twenty (20) years under claim of ownership.
On January 25, 1971, the court a quo reconsidered its decision, reopened the case and directed the
intervenors to file their corresponding pleadings and present their evidence; all evidence already
presented were to remain but plaintiff, as well as the Republic of the Philippines, could present additional
evidence if they so desire. The plaintiff presented additional evidence on July 30, 1971, and the case was
set for hearing for the reception of intervenors' evidence on August 30 and August 31, 1971.
On August 30, 1971, the date set for the presentation of the evidence for intervenors, the latter did not
appear but submitted a motion for postponement and resetting of the hearing on the next day, August
31, 1971. The trial court denied the motion for postponement and allowed plaintiff to offer his evidence
"en ausencia," after which the case would be deemed submitted for decision. On the following day, August
31, 1971, Judge Sison rendered a decision reiterating his decision of August 29, 1970.
A motion for reconsideration was immediately filed by the intervenors. But before this motion was acted
upon, plaintiff filed a motion for execution, dated November 18, 1971. On December 10, 1971, the lower
court, this time through Judge Miguel Navarro, issued an order denying the motion for execution and
setting aside the order denying intervenors' motion for postponement. The case was reopened to allow
intervenors to present their evidence. Unable to secure a reconsideration of Judge Navarro's order, the
plaintiff went to the Intermediate Appellate Court on a petition for certiorari. Said petition was, however,
denied by the Intermediate Appellate Court, and petitioners brought the matter to this Court in G.R. No.
36163, which was denied on May 3, 1973 Consequently, the case was remanded to the court a quo for
further proceedings.
On August 31, 1970, intervenors filed a motion to dismiss, principally on the ground that the Republic of
the Philippines cannot be sued without its consent and hence the action cannot prosper. The motion was
opposed by the plaintiff.
On August 21, 1980, the trial court, through Judge Esteban Lising, issued the questioned order dismissing
the case for lack of jurisdiction. Respondent moved for reconsideration, while the Solicitor General, on
Atty. Galleon USC College of Law and Governance
behalf of the Republic of the Philippines filed its opposition thereto, maintaining that the dismissal was
proper on the ground of non-suability of the State and also on the ground that the existence and or
authenticity of the purported possessory information title of the respondents' predecessor-in-interest had
not been demonstrated and that at any rate, the same is not evidence of title, or if it is, its efficacy has
been lost by prescription and laches.
Upon denial of the motion for reconsideration, plaintiff again went to the Intermediate Appellate Court
on petition for certiorari. On April 30, 1985, the respondent appellate court rendered its decision reversing
the order of Judge Lising and remanding the case to the court a quo for further proceedings. Hence this
petition.
We find the petition meritorious. 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. It is an action directed against a specific party or parties, and any judgment therein
binds only such party or parties. The complaint filed by plaintiff, the private respondent herein, is directed
against the Republic of the Philippines, represented by the Land Authority, a governmental agency created
by Republic Act No. 3844.
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."
Private respondent contends that the consent of petitioner may be read from the Proclamation itself,
when it established the reservation "subject to private rights, if any there be." We do not agree. 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. Moreover, 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.
Neither is there merit in respondent's submission. which the respondent appellate court sustained, on the
basis of our decision in the Begosa case, that the present action is not a suit against the State within the
rule of State immunity from suit, because plaintiff does not seek to divest the Government of any of its
lands or its funds. It is contended that the complaint involves land not owned by the State, but private
land belonging to the plaintiff, hence the Government is not being divested of any of its properties. There
is some sophistry involved in this argument, since the character of the land sought to be recovered still
remains to be established, and the plaintiff's action is directed against the State precisely to compel the
latter to litigate the ownership and possession of the property. In other words, the plaintiff is out to
establish that he is the owner of the land in question based, incidentally, on an informacion posesoria of
dubious value, and he seeks to establish his claim of ownership by suing the Republic of the Philippines in
an action in personam.
The inscription in the property registry of an informacion posesoria under the Spanish Mortgage Law was
a means provided by the law then in force in the Philippines prior to the transfer of sovereignty from Spain
LLB-1 Room EH308 SSDSG
to the United States of America, to record a claimant's actual possession of a piece of land, established
through an ex parte proceeding conducted in accordance with prescribed rules. Such inscription merely
furnishes, at best, prima facie evidence of the fact that at the time the proceeding was held, the claimant
was in possession of the land under a claim of right as set forth in his application. The possessory
information could ripen into a record of ownership after the lapse of 20 years (later reduced to 10 years),
upon the fulfillment of the requisites prescribed in Article 393 of the Spanish Mortgage Law.
There is no showing in the case at bar that the informacion posesoria held by the respondent had been
converted into a record of ownership. Such possessory information, therefore, remained at best
mere prima facie evidence of possession. Using this possessory information, the respondent could have
applied for judicial confirmation of imperfect title under the Public Land Act, which is an action in rem.
However, having failed to do so, it is rather late for him to pursue this avenue at this time. Respondent
must also contend, as the records disclose, with the fact admitted by him and stated in the decision of the
Court a quo that settlers have been occupying and cultivating the land in question since even before the
outbreak of the war, which puts in grave doubt his own claim of possession.
Worthy of note is the fact, as pointed out by the Solicitor General, that the informacion
posesoria registered in the Office of the Register of Deed of Camarines Sur on September 23, 1952 was a
"reconstituted" possessory information; it was "reconstituted from the duplicate presented to this office
(Register of Deeds) by Dr. Pablo Feliciano," without the submission of proof that the alleged duplicate was
authentic or that the original thereof was lost. Reconstitution can be validly made only in case of loss of
the original. These circumstances raise grave doubts as to the authenticity and validity of the "informacion
posesoria" relied upon by respondent Feliciano. Adding to the dubiousness of said document is the fact
that "possessory information calls for an area of only 100 hectares," whereas the land claimed by
respondent Feliciano comprises 1,364.4177 hectares, later reduced to 701.9064 hectares. Courts should
be wary in accepting "possessory information" documents, as well as other purportedly old Spanish titles,
as proof of alleged ownership of lands.
WHEREFORE, judgment is hereby rendered reversing and setting aside the appealed decision of the
Intermediate Appellate Court, dated April 30, 1985, and affirming the order of the court a quo, dated
August 21, 1980, dismissing the complaint filed by respondent Pablo Feliciano against the Republic of the
Philippines. No costs. c
SO ORDERED.
Narvasa, Cruz, Feliciano, Gancayco and Sarmiento, JJ., concur.
Melencio-Herrera, J., on leave.
Del Mar vs PVA
GR L-27299
June 27, 1973
FACTS
1. Petitioner filed a petition for mandamus against respondent to compel the latter to continue
paying him his monthly life pension of P50 from March 1950 (when it was cancelled) to June
20, 1957 and from June 22, 1957, his monthly life pension, as increased by Republic Act 1920,
of P100, and to pay to him as well the monthly living allowance of P10 for each of his unmarried
minor children below eighteen years of age, pursuant to the said Republic Act 1920 which took
effect on June 22, 1957. Del Mar also asked for compensatory, moral and exemplary damages.
Atty. Galleon USC College of Law and Governance
2. Petitioner averred that
a. he served during World War II as chief judge advocate of the Cebu Area Command
(a duly recognized guerrilla organization) with the rank of major;
b. that he subsequently obtained an honorable discharge from the service on October
20, 1946 on a certificate of permanent total physical disability;
c. that upon proper claim presented and after hearing and adjudication, the Philippine
Veterans Board (the PVA's predecessor) granted him a monthly life pension of P50
effective January 28, 1947;
d. that in March 1950, the said Board discontinued payment of his monthly life
pension on the ground that his receipt of a similar pension from the United States
Government, through the United States Veterans Administration, by reason of
military service rendered in the United States Army in the Far East during World War
II, precluded him from receiving any further monthly life pension from the Philippine
Government;
e. that he wrote the said Board twice, demanding that it continue paying his monthly
life pension, impugning the cancellation thereof as illegal; and that his demands
went unheeded.
3. Respondent contended that
a. petitioner is barred from claiming and receiving since he is also receiving similar
pension from the US
b. it is discretionary on its part to grant or discontinue the pension sought by del Mar.
c. alleged that the action of del Mar was premature because of his failure to exhaust
administrative remedies before invoking judicial intervention
d. PVA cannot be sued because it is an government agency
4. Trial court ruled in favor of petitioner granting his prayers except for compensatory, moral and
exemplary damages.
5. Hence the petition by the respondent
ISSUE
2. Whether or not PVA can invoke State Immunity
RULING
2. No, state immunity can be invoked.
Is the PVA exempt from the filing of an appeal bond? To resolve this issue, we must initially
determine whether the PVA is an agency or instrumentality of the Republic of the Philippines,
and, in the affirmative, whether it exercises governmental functions.
As a general proposition, the rule — well-settled in this jurisdiction — on the immunity of the
Government from suit without its consent holds true in all actions resulting in "adverse
consequences on the public treasury, whether in the disbursements of funds or loss of
property." Needless to state, in such actions, which, in effect, constitute suits against the
Government, the court has no option but to dismiss them Nonetheless, the rule admits of an
exception - it finds no application where a claimant institutes an action against a functionary
who fails to comply with his statutory duty to release the amount claimed from the public funds
already appropriated by statute for the benefit of the said claimant. As clearly discernible from
the circumstances, the case at bar falls under the exception.
LLB-1 Room EH308 SSDSG
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
G.R. No. L-27299. June 27, 1973
QUIRICO DEL MAR, petitioner, vs. THE PHILIPPINE VETERANS ADMINISTRATION, respondent appellant.
Quirico del Mar in his own behalf.
Solicitor General Felix V . Makasiar, First Assistant Solicitor General Esmeraldo Umali and Solicitor
Eulogio
Raquel Santos for respondent-appellant.
DECISION
CASTRO, J p:
On June 20, 1964, Quirico del Mar (hereinafter referred to as del Mar) filed with the Court of First Instance
of Cebu a petition for mandamus (civil case R-8465) against the Philippine Veterans Administration
(hereinafter referred to as the PVA), to compel the latter to continue paying him his monthly life pension
of P50 from the date of its cancellation in March 1950 to June 20, 1957, and thereafter, or
In his petition below, del Mar averred that he served during World War II as chief judge advocate of the
Cebu Area Command (a duly recognized guerrilla organization) with the rank of major; that he
subsequently obtained an honorable discharge from the service on October 20, 1946 on a certificate of
permanent total physical disability; that upon proper claim presented and after hearing and adjudication,
the Philippine Veterans Board (the PVA's predecessor) granted him a monthly life pension of P50 effective
January 28, 1947; that in March 1950, the said Board discontinued payment of his monthly life pension on
the ground that his receipt of a similar pension from the United States Government, through the United
States Veterans Administration, by reason of military service rendered in the United States Army in the
Far East during World War II, precluded him from receiving any further monthly life pension from the
Philippine Government; that he wrote the said Board twice, demanding that it continue paying his monthly
life pension, impugning the cancellation thereof as illegal; and that his demands went unheeded.
The PVA reiterated its contention that del Mar's receipt of a similar pension from the United States
Government effectively barred him from claiming and receiving from the Philippine Government the
monthly life pension granted him as well as the monthly allowances he claimed for his five living unmarried
minor children below eighteen years of age. The PVA also asserted that it is discretionary on its part to
grant or discontinue the pension sought by del Mar. In addition, it alleged that the action of del Mar was
premature because of his failure to exhaust administrative remedies before invoking judicial intervention,
and that the court a quo was without jurisdiction to try the case as del Mar's demand partakes of a money
claim against the PVA — a mere agency of the Philippine Government — and, in effect, of a suit against
the Government which is not suable without its consent. The PVA thus prayed for the dismissal of the
petition.
After due trial, the court a quo rendered judgment upholding del Mar's claims. In its decision dated
February 27, 1965, the court (1) ordered the PVA to pay to del Mar his monthly life pension corresponding
to the period from April 1950 to May 1957 at the rate of P50 a month, adding up to P4,334.86, and his
monthly life pension corresponding to the period from June 22, 1957 to February 1965 at the rate of P100
a month totalling P9,200, and thereafter to continue to pay his monthly life pension at the rate of P100 a
month; (2) directed del Mar to file with the PVA the corresponding written application for the payment to
him of the monthly living allowance of P10 for each of his five living unmarried minor children from June
Atty. Galleon USC College of Law and Governance
22, 1957; and ordered the PVA to give due course to the written application as soon as del Mar shall have
filed the same with it, and once approved, to make the necessary payment of the accumulated unpaid
living allowances due to each of the said children from June 22, 1957 as well as the current ones until each
one of them ceases to be entitled to the same; and (3) directed the PVA, in the event of unavailability of
funds to pay the claims aforementioned, to set aside funds from such as are intended to pay the veterans'
living pensions, or to cause the same to be appropriated in its budget in order to comply with the
judgment. For lack of basis, the court a quo omitted to pass judgment on del Mar's claim for moral and
exemplary damages.
Hence, the present appeal by the PVA.
The PVA alleges that the court a quo erred (1) in not holding itself without jurisdiction to try civil case R-
8465; (2) in not finding as premature the petition for mandamus filed by del Mar due to the failure of the
latter to exhaust available administrative remedies before seeking judicial intervention; (3) in declaring
null and void section 6 of PVA Regulation No. 2 relied upon by it in discontinuing the monthly life pension
of del Mar since March 1950; (4) in not finding it discretionary on the part of the PVA to grant or
discontinue the said pension; (5) in ordering it to pay to del Mar the amounts stated in the judgment; and
(6) in ordering it to give due course to and approve the application which the said court directed del Mar
to file for the payment to the latter of the monthly living allowance for each of his living unmarried minor
children below eighteen years of age.
This appeal raises several questions which will be discussed in seriatim.
1. The PVA argues that the court a quo was without jurisdiction to try civil case R-8465 because it
involves a money claim against the said PVA — a mere agency of the Government performing
governmental functions with no juridical personality of its own — and, in reality, partakes of an
action against the Philippine Government which is immune from suit without its consent, citing
this Court's observation in Republic of the Philippines vs. Ramolete and Del Mar, to wit:
". . . a charge against the Government where the money involved is part
of the public funds, is a suit against the Government, and the
happenstance that the action is directed against the PVA as an entity and
not against the Republic of the Philippines is of no moment. Perforce, the
Republic of the Philippines, on matters of administration of all benefits
due to the veterans of revolutions and wars, and to their heirs and
beneficiaries, acts and has to act through its agency and instrumentality,
the PVA. The suit should therefore be regarded as one against the
Republic of the Philippines; the PVA is therefore exempt from the filing
of an appeal bond."
The PVA labors under a muddled and mistaken appreciation of the aforecited observation. This
Court stated in precise language the sole issue for resolution in that case, thus:
"Is the PVA exempt from the filing of an appeal bond? To resolve this
issue, we must initially determine whether the PVA is an agency or
instrumentality of the Republic of the Philippines, and, in the affirmative,
whether it exercises governmental functions."
Indeed, the decisive point in the aforementioned case related to the status of the PVA as an
agency or instrumentality of the Republic of the Philippines exercising governmental
functions as to be entitled to exemption from the filing of the appeal bond per section 16 of
Rule 141 of the Rules of Court, not to the nature of the claim sought to be enforced by the
private respondent therein (del Mar) against the said PVA. Thus, in the said case, this Court
made a lengthy disquisition on the history, development and organization of the PVA to
show conclusively that the same is an entity or agency of the Republic of the Philippines
performing governmental functions. True, this Court referred to the claim of the private
respondent therein as "a claim for a sum of money against the Government, which claim, if
adjudged finally to be meritorious, would render the Republic of the Philippines liable
LLB-1 Room EH308 SSDSG
therefor," since the funds from which the claim was to be satisfied were funds appropriated
by Congress for the PVA; but this Court properly and advisedly omitted any study and
consideration of the question of suability or non-suability of the Government in connection
therewith.
As a general proposition, the rule — well-settled in this jurisdiction — on the immunity of the
Government from suit without its consent holds true in all actions resulting in "adverse
consequences on the public treasury, whether in the disbursements of funds or loss of
property." Needless to state, in such actions, which, in effect, constitute suits against the
Government, the court has no option but to dismiss them Nonetheless, the rule admits of an
exception It finds no application where a claimant institutes an action against a functionary
who fails to comply with his statutory duty to release the amount claimed from the public funds
already appropriated by statute for the benefit of the said claimant. As clearly discernible from
the circumstances, the case at bar falls under the exception.
2. The second question posed by the PVA relates to del Mar's alleged failure to exhaust
administrative remedies before resorting to court action. Suffice it to state that where a case
— as in the present controversy — involves a question solely of a legal nature, there arises no
need for the litigant to resort to all administrative remedies available to him before seeking
judicial relief.
3. The validity of section 6 of Regulation No. 2 of the "Rules and Regulations on Veterans'
Benefits" adopted by the PVA constitutes the core of the present controversy. The said section
6 reads as follows:
"SEC. 6. Effect of receipt of USVA pension benefit — termination,
reduction. — An award of a similar disability compensation from the US
Veterans Administration shall be a ground for the cancellation of a
disability pension granted under this Regulation: Provided,
however, That if and while the disability compensation awarded by the
US Veterans Administration is less than the pension granted hereunder,
the difference in amount shall be assumed and paid by the
PVA: Provided, further, That upon proper application, the disability
award previously cancelled may be restored upon the termination of the
US Veterans Administration award if the cause of such termination is due
to negative military service report of the pensioner certified by the US
Department of the Army and not for any other valid cause: Provided,
finally, That the veteran is medically determined to be still suffering from
the disability for which he was previously awarded a pension. Payment
of pension thus restored shall take effect or shall commence only from
the date of approval of restoration and when funds become available."
Pursuant to the foregoing, the PVA cancelled and discontinued the monthly life pension of del
Mar, reasoning that the latter's receipt of a similar pension from the United States Government
precluded his enjoying any like benefit from the Philippine Government. The PVA avers that it
adopted the aforequoted section 6 in order to carry out and implement section 9 of Republic
Act 65, as amended, particularly its excepting clause. Said section 9 reads:
"SEC. 9. The persons mentioned in sections one and two hereof who are
permanently incapacitated from work owing to sickness, disease or
injuries sustained in line of duty, shall be given a life pension of one
hundred pesos a month, and ten pesos a month for each of his unmarried
minor children below eighteen years of age, unless they are actually
receiving a similar pension from other Government funds, and shall
receive, in addition, the necessary hospitalization and medical care."
The PVA reads the phrase "from other Government funds" in the excepting clause of the
aforecited provision as necessarily including funds of the United States Government. And
Atty. Galleon USC College of Law and Governance
without question, the pension del Mar receives from the United States Veterans
Administration comes from the funds of the United States Government.
On the other hand, del Mar avers that section 6 of Regulation No. 2 illegally effects the
suspension of the operation of section 9 of Republic Act 65, as amended, and argues that under
section 20 of Republic Act 65, as amended, the power to suspend the payment of the monthly
life pension awarded to a disabled veteran belongs exclusively to the President of the
Philippines, not to the PVA which, in the case at bar, illegally arrogated unto itself the said
power. Furthermore, del Mar states, the PVA "deliberately misinterprets" the phrase "from
other Government funds" in extending its scope to include United States Government funds.
The principle recognizing the necessity of vesting administrative authorities with the power to
promulgate rules and regulations to implement a given statute and to effectuate its policies,
provided such rules and regulations conform to the terms and standards prescribed by the
statute as well as purport to carry into effect its general policies, constitutes a well-established
doctrine in this jurisdiction. In Teoxon vs. Members of the Board of Administrators, Philippine
Veterans Administration, suprea, this Court fittingly stated:
". . . the Constitution limits the authority of the President, in whom all
executive power resides, to take care that the laws be faithfully
executed. No lesser administrative executive office or agency then can,
contrary to the express language of the Constitution, assert for itself a
more extensive prerogative, Necessarily, it is bound to observe the
constitutional mandate. There must be strict compliance with the
legislative enactment. Its terms must be followed. The statute requires
adherence to, not departure from, its provisions. No deviation is
allowable."
Section 11 of Republic Ace 2665 empowers the PVA to adopt rules and regulations, thus:
"SEC. 11.Policies, rules and regulations. — Subject to existing laws, the
Administration shall have the power to promulgate and issue rules and
regulations as may be found necessary to govern its operations and to
carry out the aims and purposes of this Act and of all other laws to be
administered by the Administration."
Pursuant to this rule making authority, the PVA — allegedly to implement section 9 of
Republic Act 65, as amended — promulgated its "Rules and Regulations on Veterans'
Benefits," section 6 of Regulation No. 2 of which cancels the disability pension granted if the
beneficiary receives a similar compensation from the United States Veterans Administration.
In effect, the PVA, by adopting section 6 of Regulation No. 2, suspended the operation of
section 9 of Republic Act 65, as amended. This, Republic Act 65, as amended, forbids the PVA
to do for it expressly authorizes only the President of the Philippines to suspend the
operation of any of its provisions "if and when the Congress of the United States approves
the pending GI Bill of Rights applicable to the Philippines the provisions of which are identical
or similar to the provisions of this Act." Clearly then, section 6 of Regulation No. 2 not only
negates the very spirit behind section 9 of Republic Act 65, as amended, but also contravenes
the express mandate of section 20 thereof.
The PVA's pretense that del Mar's case falls under the clause of section 9 of Republic Act 65, as
amended, which excepts those who "are actually receiving a similar pension from other
Government funds" from the coverage of said section 9 — predicated upon its interpretation
that the phrase "other Government funds" includes funds of the United States Government —
fails to persuade this Court as a valid argument to justify its cancellation of del Mar's monthly
life pension. Section 9 of Republic Act 65, as amended, in providing for the excepting clause,
obviously intends to prevent the receipt by the same beneficiary of concurrent or multiple
pensions or benefits similar to each other in nature and basis, although coursed through
different departments or agencies, but paid out of the funds of the same Government. Any
LLB-1 Room EH308 SSDSG
contrary interpretation resulting in the derogation of the interests of the beneficiary who
likewise receives a similar pension paid out of funds of other Governments, conflicts with the
established axiom ordaining the construction of pension laws of war veterans in favor of those
seeking their benefits.
The record of the case at oar being completely bereft of any indication to show the suspension
by the President of the Philippines — pursuant to section 20 of Republic Act 65, as amended —
of the operation of any of the provisions of the said statute, this Court perforce must uphold
del Mar's claims.
4. The rest of the assigned errors relate to the alleged undue interference by the court a quo with
the purely discretionary functions of the PVA in the matter of granting or discontinuing the
pension benefits.
The law concedes to administrative bodies — like the PVA — the authority to act on and decide
claims and applications in accordance with their judgment, in the exercise of their adjudicatory
capacity. Because of their acquired expertise in specific matters within the purview of their
respective jurisdictions, the findings of these administrative bodies merit not only great weight
but also respect and finality. "There is a limit, however, to such a deference paid to the
actuations of such bodies. Clearly, where there has been a failure to interpret and apply the
statutory provisions in question, judicial power should assert itself. Under the theory of
separation of powers, it is to the judiciary, and to the judiciary alone, that the final say on
questions of law in appropriate cases coming before it is vested."
All told, no roadblock stands in the way of del Mar's demand for the continuance of his monthly life
pension.
In view, however, of the further amendment by Congress of section 9 of Republic Act 65, as amended,
through Republic Act 5753 — the provisions of which took effect on June 21, 1969 — there arises the need
to modify the judgment a quo in order to make it conform to the said statute as it now stands. Republic
Act 5753, in further amending section 9 of Republic Act 65, as amended, grants every totally disabled
veteran of World War II "a life pension of two hundred pesos a month, and thirty pesos a month for his
wife and each of his unmarried minor children below eighteen years of age."
ACCORDINGLY, this Court adjudges the appellee Quirico del Mar entitled to his life pension (1) at the rate
of P50 a month effective as of April 1950 to May 1957, per Republic Act 65; (2) at the rate of P100 a month
effective as of June 22, 1957 to May 1969, per Republic Act 65 as amended by Republic Act 1920; and (3)
at the rate of P200 a month effective as of June 21, 1969, per Republic Act 65 as further amended by
Republic Act 5753. This Court directs the appellant Philippine Veterans Administration to compute and
then to pay to the appellee del Mar his past and accumulated monthly life pension at the aforementioned
statutory rates.
Regarding the monthly living allowance the appellee del Mar asks for each of his five "living unmarried
minor children below eighteen years of age," it appearing that he has not filed any proper application
therefor with the appellant PVA but simply included them in his claim for the restoration of his
discontinued monthly life pension, the appellee del Mar, may, if he so desires, comply with section 15 of
Republic Act 65, as amended, which requires that "[A]ny person who desires to take advantage of the
rights and privileges provided for in this Act should file his application" with the Philippine Veterans
Administration, and the latter is hereby ordered to consider and pass upon the merits of such application,
if filed, with particular reference to the entitlement qualifications of the intended beneficiaries. No
pronouncement as to costs.
Makalintal, Actg. C.J., Zaldivar, Fernando, Teehankee, Barredo and Esguerra, JJ., concur.
Antonio and Makasiar, JJ., did not take part.
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG

PNB vs CIR
GR L - 32667
January 31, 1978

FACTS
1. Pursuant to a writ of execution issued by the now defunct Court of Industrial Relations in favor
of private respondent and against the People's Homesite and Housing Corporation, respondent
clerk of court, in his capacity as special deputy sheriff, served a notice to garnish the funds of
the People's Homesite and Housing Corporation which were deposited with petitioner bank.
2. Petitioner moved to quash the notice of garnishment but respondent Court denied the motion.
3. Claiming that respondent Court's denial amounted to grave abuse of discretion because the
appointment of the clerk of court as authorized deputy sheriff was contrary to law and the
funds subject of the garnishment "could be public in character", petitioner instituted instant
certiorari proceeding.

ISSUE
3. Whether or not PHHC had the capacity to be sued
4. Whether or not any judgment against it could be enforced by a writ of execution
5. Whether or not its funds could even be garnished.
Atty. Galleon USC College of Law and Governance
RULING
Yes, PHHC can be sued, any judgment against it can be enforced by a writ of execution and its
funds can be garnished.
PHHC was a government-owned entity. It has personality distinct and separate from the
government. It has all the powers of a corporation under the Corporation Law, accordingly it
may sue and be sued and may be subjected to court processes just like any other corporation.
By engaging in business through the instrumentality of a corp., the government divests itself of
its sovereign character, so as to render the corp. subject to the rules governing private
corporations. Garnishment is a proper remedy for a prevailing party to proceed against the
funds of a corporate entity even if owned or controlled by the government. It is well-settled
that when the government enters into commercial business, it abandons its sovereign capacity
and is to be treated just like any other corporation.
Republic of the Philippines
Supreme Court
Manila
SECOND DIVISION
G.R. No. L-32667. January 31, 1978
PHILIPPINE NATIONAL BANK, petitioner, vs. COURT OF INDUSTRIAL RELATIONS, GABRIEL V.
MANANSALA and GILBERT P. LORENZO, in his official capacity as authorized Deputy
Sheriff, respondents.
Conrado E. Medina for petitioner.
Gabriel V. Manansala in his own behalf.
Jose K. Manguiat, Jr. for respondent Court.
SYNOPSIS
Pursuant to a writ of execution issued by the now defunct Court of Industrial Relations in favor of private
respondent and against the People's Homesite and Housing Corporation, respondent clerk of court, in his
capacity as special deputy sheriff, served a notice to garnish the funds of the People's Homesite and
Housing Corporation which were deposited with petitioner bank. Petitioner moved to quash the notice of
garnishment but respondent Court denied the motion. Claiming that respondent Court's denial amounted
to grave abuse of discretion because the appointment of the clerk of court as authorized deputy sheriff
was contrary to law and the funds subject of the garnishment "could be public in character", petitioner
instituted instant certiorari proceeding.
The Supreme Court held that respondent clerk of court is the legally authorized deputy sheriff to serve
the Court of Industrial Relations' writ of execution as provided for in Republic Act No. 4201 which amended
the Court of Industrial Relations Act; and that funds of the People's Homesite and Housing Corporation
may be the object of garnishment because although the said corporation is a government-owned and
controlled corporation, it has a personality separate and distinct from the government which subjects it
to the rules of law governing private corporations.
SYLLABUS
LLB-1 Room EH308 SSDSG
I. GOVERNMENT CORPORATIONS; GARNISHMENT; PEOPLE'S HOMESITE AND HOUSING
CORPORATION FUNDS NOT EXCEMPT THEREFROM. — The premise that the funds of the
People's Homesite and Housing Corporation could be spoken of as public in character may be
accepted in the sense that the said corporation is a government-owned entity. However, it does
not follow that they are exempt from garnishment because the People's Homesite and Housing
Corporation, as a government-owned and controlled corporation, has a personality distinct and
separate from that of the government. Accordingly, it may sue and be sued and may be
subjected to court processes like any other corporation.
II. ID.; INDEMNITY FROM SUIT, GOVERNMENT-OWNED CORPORATIONS NOT IMMUNE FROM
SUIT. — By engaging in a particular business through the instrumentality of a corporation, the
government divests itself pro hac vice of its sovereign character, so as to render the corporation
subject to the rules of law governing private corporations.
III. GOVERNMENT; IMMUNITY FROM SUITS; WAIVER THEREOF DOES NOT SUBJECT ITS
PROPERTIES AND FUNDS TO EXECUTION OR GARNISHMENT. — Waiver by the State of its right
of immunity from suits does not automatically subject its properties and funds to execution or
garnishment because such would amount to a disbursement without any proper appropriation
as required by law.
IV. CERTIORARI; JUDGMENTS; AUTHORITY OF INDUSTRIAL COURT'S CLERK OF COURT AS SPECIAL
DEPUTY SHERIFF TO ISSUE NOTICE OF GARNISHMENT. — The Industrial Court's order
sustaining the authority of its Clerk of Court as special deputy sheriff to serve notice of
garnishment cannot be stigmatized as a grave abuse of discretion. Under Republic Act 4201,
the Clerk of Court of the now defunct Court of Industrial Relations was the ex-officio sheriff. It
is true that there is no authorization in law for the appointment of special sheriffs for the service
of writs of execution. But even if there is a sufficient justification for the infirmity attributed to
the order of the court, it would be inequitable to issue a new execution by the proper official
considering the lapse of time during which the judgment creditor had been unable to execute
the judgment in his favor. What is important is that the judgment be executed. It would be
carry technicality to an absurd length if just because of such a mistake, assuming that it is, but
undoubtedly committed in good faith, further delay would still be imposed on the judgment
creditor by characterized the order sought to be nullified as amounting to a grave abuse of
discretion.
DECISION
FERNANDO, J p:
The issue raised in this certiorari proceeding is whether or not an order of the now defunct
respondent Court of Industrial Relations denying for lack of merit petitioner's motion to quash a notice of
garnishment can be stigmatized as a grave abuse of discretion. What was sought to be garnished was the
money of the People's Homesite and Housing Corporation deposited at petitioner's branch in Quezon City,
to satisfy a decision of respondent Court which had become final and executory. A writ of execution in
favor of private respondent Gabriel V. Manansala had previously been issued. He was the counsel of the
prevailing party, the United Homesite Employees and Laborers Association, in the aforementioned case.
The validity of the order assailed is challenged on two, grounds: (1) that the appointment of respondent
Gilbert P. Lorenzo as authorized deputy sheriff to serve the writ of execution was contrary to law and (2)
that the funds subject of the garnishment "may be public in character." In thus denying the motion to
quash, petitioner contended that there was on the part of respondent Court a failure to abide by
authoritative doctrines amounting to a grave abuse of discretion. After a careful consideration of the
matter, it is the conclusion of this Tribunal that while the authorization of respondent Lorenzo to act as
special deputy sheriff to serve the notice of garnishment may be open to objection, the more basic ground
that could have been relied upon — not even categorically raised, petitioner limiting itself to the assertion
that the funds "could be public" in character, thus giving rise to the applicability of fundamental concept
of non-suability — is hardly persuasive. The People's Homesite and Housing Corporation had a juridical
Atty. Galleon USC College of Law and Governance
existence enabling it sue and be sued. Whatever defect could be attributed therefore to the order denying
the motion to quash could not be characterized as a grave abuse of discretion. Moreover, with the lapse
of time during which private respondent had been unable to execute a judgment in his favor, the equities
are on his side. Accordingly, this petition must be dismissed.
The order of August 26, 1970 of respondent Court denying the motion to quash, subject of this certiorari
proceeding, reads as follows: "The Philippine National Bank moves to quash the notice of garnishment
served upon its branch in Quezon City by the authorized deputy sheriff of this Court. It contends that the
service of the notice by the authorized deputy sheriff of the court contravenes Section 11 Commonwealth
Act No. 105, as amended which reads: 'All writs and processes issued by the Court shall be served and
executed free of charge by provincial or city sheriffs, or by any person authorized by this Court, in the same
manner as writs and processes of Courts of First Instance.' Following the law, the Bank argues that it is the
Sheriff of Quezon City, and not the Clerk of this Court who is its Ex-Officio Sheriff, that has the authority to
serve the notice of garnishment, and that the actual service by the latter officer of said notice is therefore
not in order. The Court finds no merit in this argument. Republic Act No. 4201 has, since June 19, 1965,
already repealed Commonwealth Act No. 103, and under this law, it is now the Clerk of this Court that is
at the same time the Ex-Officio Sheriff. As such Ex-Officio Sheriff, the Clerk of this Court has therefore the
authority to issue writs of execution and notices of garnishment in an area encompassing the whole of the
country, including Quezon City, since his area of authority is coterminous with that of the Court itself,
which is national in nature. . .. At this stage, the Court notes from the record that the appeal to the
Supreme Court by individual employees of PHHC which questions the award of attorney's fees to Atty.
Gabriel V. Manansala, has already been dismissed and that the same became final and executory on
August 9, 1970. There is no longer any reason, therefore, for withholding action in this case. [Wherefore],
the motion to quash filed by the Philippine National Bank is denied for lack of merit. The said Bank is
therefore ordered to comply within five days from receipt with the 'notice of Garnishment' dated May 6,
1970." There was a motion for reconsideration filed by petitioner, but in a resolution dated September 22,
1970, it was denied. Hence, this certiorari petition.
As noted at the outset, the petition lacks merit.
1. The plea for setting aside the notice of garnishment was premised on the funds of the People's
Homesite and Housing Corporation deposited with petitioner being "public in character." There
was not even a categorical assertion to that effect. It is only the possibility of its being "public
in character." The tone was thus irresolute, the approach diffident. The premise that the funds
could be spoken of as public in character may be accepted in the sense that the People's
Homesite and Housing Corporation was a government-owned entity. It does not follow though
that they were exempt from garnishment. National Shipyard and Steel Corporation v. Court of
Industrial Relations is squarely in point. As was explicitly stated in the opinion of the then
Justice, later Chief Justice, Concepcion: "The allegation to the effect that the funds of the
NASSCO are public funds of the government, and that, as such, the same may not be garnished,
attached or levied upon, is untenable for, as a government owned and controlled corporation,
the NASSCO has a personality of its own, distinct and separate from that of the Government. It
has — pursuant to Section 2 of Executive Order No. 356, dated October 23, 1950 . . . , pursuant
to which the NASSCO has been established - 'all the powers of a corporation under the
Corporation Law . . . . ' Accordingly, it may sue and be sue and may be subjected to court
processes just like any other corporation (Section 13, Act No. 1459, as amended." The
similarities between the aforesaid case and the present litigation are patent. Petitioner was
similarly a government-owned corporation. The principal respondent was the Court of
Industrial Relations. The prevailing parties were the employee of petitioner. There was likewise
a writ of execution and thereafter notices of garnishment served on several banks. There was
an objection to such a move and the ruling was adverse to the National Shipyard and Steel
Corporation. Hence the filing of a petition for certiorari. To repeat, the ruling was quite
categorical. Garnishment was the appropriate remedy for the prevailing party which could
proceed against the funds of a corporate entity even if owned or controlled by the government.
LLB-1 Room EH308 SSDSG
In a 1941 decision, Manila Hotel Employees Association v. Manila Hotel Company, this Court,
through Justice Ozaeta, held: "On the other hand, it is well settled that when the government
enters into commercial business, it abandons its sovereign capacity and is to be treated like any
other corporation. (Bank of the United States v. Planters' Bank, 9 Wheat, 904, 6 L.ed. 244). By
engaging in a particular business thru the instrumentality of a corporation, the government
divests itself pro hac vice of its sovereign character, so as to render the corporation subject to
the rules of law governing private corporations."
2. It is worth noting that the decision referred to, the Bank of the United States v. Planters' Bank,
was promulgated by the American Supreme Court as early as 1824, the opinion being penned
by the great Chief Justice Marshall. As pointed out by him: "It is, we think, a sound principle
when a government becomes a partner in any trading company, it divests itself, so far as
concerns the transactions of that company, of its sovereign character, and takes that of a
private citizen. Instead of communicating to the company its privileges and its prerogatives, it
descends to a level with those with whom it associates itself, and takes the character which
belongs to its associates, and to the business which is to be transacted. Thus, many states of
this Union who have an interest in banks, are not suable even in their own courts; yet they
never exempt the corporation from being sued. The state of Georgia, by giving to the bank the
capacity to sue and be sued, voluntarily strips itself of its sovereign character, so far as respects
the transactions of the bank, and waives all the privileges of that character. As a member of a
corporation, a government never exercises its sovereignty. It acts merely as a corporator, and
exercises no other power in the management the affairs of the corporation, that are expressly
given by the incorporating act." TheNational Shipyard and Steel Corporation case, therefore,
merely reaffirmed one of the oldest and soundest doctrines in this branch of the law.
3. The invocation of Republic v. Palacio, as well as Commissioner of Public Highways v. San Diego,
did not help the cause of petitioner at all. The decisions are not applicable is properly
understood they can easily be distinguished. As is clear in the opinion of Justice J.B.L. Reyes in
Republic v. Palacio, the Irrigation Service Unit which was sued was an office and agency under
the Department of Public Works al Communications. The Republic of the Philippines, through
the then Solicitor General, moved for the dismissal of such complaint, alleging that it "has no
juridical personality to sue and be sued." Such a motion to dismiss was denied. The case was
tried and plaintiff Ildefonso Ortiz, included as private respondent in the Supreme Court
proceeding, obtained a favorable money judgment. It became final and executory. Thereafter,
it appeared that the Solicitor General was served with a copy of the writ of execution issued by
the lower court followed by an order of garnishment. Again, there was an urgent motion lift
such order, but it was denied. A certiorari and prohibition proceeding was then filed with the
Court of Appeals. The legality of the issuance of such execution and garnishment was upheld,
and the matter was elevated to this Tribunal. The Republic was sustained. The infirmity of the
decision reached by the Court of Appeals, according to the opinion, could be traced to the belief
that there was a waiver of "government immunity and, by implication, consent to the
suit." There was no such waiver. Even if there were, it was stressed by Justice J.B.L. Reyes: "It
is apparent that this decision of the Court of Appeals suffers from the erroneous assumption
that because the State has waived its immunity, its property and funds become liable to seizure
under the legal process. This emphatically is not the law. (Merritt v. Insular Government, 34
Phil. 311)." To levy the execution of such funds, according to him, would thus "amount to a
disbursement without any proper appropriation as required by law." In Commissioner of Public
Highways v. San Diego, the opening paragraph of Justice Teehankee was quite specific as to
why there could be neither execution nor garnishment of the money of petitioner Bureau of
Public Highways: "In this special civil action for certiorari and prohibition, the Court declares
null and void the two questioned orders of respondent Court levying upon funds of petitioner
Bureau of Public Highways on deposit with the Philippine National Bank, by virtue of the
fundamental precept that government funds are not subject to execution or garnishment." The
funds appertained to a governmental office, not to a government owned or controlled
corporation with a separate juridical personality. In neither case therefore was there an entity
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG
with the capacity to sue and be sued, the funds of which could thereafter be held liable to
execution and garnishment in the event of an adverse judgment.
4. Both the Palacio and the Commissioner of Public Highways decisions, insofar as they reiterate
the doctrine that one of the corollaries of the fundamental concept of non-suability is that
governmental funds are immune from garnishment, refer to Merritt v. Insular Government,
decision. Since then such a principle has been followed with undeviating rigidity, the latest
case in point being Republic v. Villasor, promulgated in 1973. It is an entirely different matter
if, according to Justice Sanchez in Ramos v. Court of Industrial Relations, the office or entity is
"possessed of a separate and distinct corporate existence." Then it can sue and be sued.
Thereafter, its funds may be levied upon or garnished. That is what happened in this case.
5. With the crucial issue thus resolved in favor of the correctness of the order assailed, the other
objection raised, namely that respondent Court acted erroneously in having a special sheriff
serve to the writ of execution, hardly needs any extensive discussion. It is true that in the
aforesaid Commissions of Public Highways opinion, this Court held that there is no
authorization in law for the appointment of special sheriffs for the service of writs of execution.
In the order sought to be nullified, the then Judge Joaquin M. Salvador of respondent Court
pointed out that under a later Act, the Court of Industrial Relations Act was amended with the
proviso that its Clerk of Court was the ex-officio sheriff. The point raised in the petition that it
should be the sheriff of Quezon City that ought to have served the writ of execution would thus
clearly appear to be inconclusive. There is to be sure no thought of deviating from the principle
announced in the Commissioner of Public Highways case. That is as it ought to be. Even if,
however, there is sufficient justification for the infirmity attributed to respondent Court by
virtue of such a ruling, still consider all the circumstances of this case, it clearly does not call for
the nullification of the order in question. What cannot be denied that the writ of execution was
issued as far back as May 5, 1970 by the then Clerk of Court of respondent Tribunal as the
authorized sheriff. It would be, to say the least, unfair and unequitable if, on the assumption Lansang vs CA
that such Clerk of Court lacked such competence, a new writ of execution had to be issued by GR 102667
the proper official. At any rate, what is important is that the judgment be executed. That is to February 23, 2000
achieve justice according to law. It would be to carry technicality, therefore, to an absurd length
if just because of such a mistake, assuming that it is, but undoubtedly one committed in good FACTS
faith, further delay would still be imposed on private respondent by characterizing the order 1. Private respondent General Assembly of the Blind (GABI) were allegedly awarded a verbal
sought to be nullified amounting to a grave abuse of discretion. contract of lease in Rizal Park by the National Parks Development Committee (NPDC). However,
this verbal contract accommodation was unclear because there was no document or
instrument involved.
WHEREFORE, the petition for certiorari is dismissed. No costs.
2. With the change of government, the new Chairman of NPDC, petitioner Amado J. Lansang,
sought to clean up Rizal Park and terminated the said verbal agreement with GABI and
Barredo, Antonio and Concepcion, Jr., JJ., concur. demanded that they vacate the area.
3. The notice was signed by the president of GABI, private respondent Jose Iglesias, allegedly to
Santos, J., is on leave.
indicate his conformity to its contents but later on claimed that he was deceived into signing
the notice.
Aquino, J., concurs in the result.
4. On the day of the supposed eviction, GABI filed an action for damages and injunction in the RTC
against the petitioner but it was dismissed, ruling that the complaint was actually directed
against the state which could not be sued without its consent.
5. On appeal, the Court of Appeals reversed the decision of the trial court and ruled that a
government official being sued in his official capacity is not enough to protest such official from
liability for acts done without or in excess of his authority.
6. Hence the petition.

ISSUE
1. Whether or not private respondents' complaint against petitioner Lansang, as Chairman of
NPDC, is in effect a suit against the state which cannot be sued without its consent.
Atty. Galleon USC College of Law and Governance
2. Whether or not petitioner Lansang abused his authority in ordering the ejectment of private
respondents from Rizal Park.
RULING
No, it is not a suit against the State and Lansang did not abuse his authority in ordering the
ejectment of private respondents from Rizal Park.
The doctrine of state immunity from suit applies to complaints filed against public officials for
acts done in the performance of their duties and does cover unlawful acts or where he is being
sued in his personal capacity, although the acts complained of may have been committed while
he occupied a public position.
Rizal Park is beyond the commerce of man and cannot be the subject of a lease contract. Private
respondents cannot and does not claim a vested right to continue to occupy Rizal Park.
A party allowed by accommodation to occupy spaces in the park may be asked at anytime to
vacate the premises.
With regard to damages, moral damages cannot be sustained in the absence of evidence to
support a claim of moral injury. Exemplary damages cannot be awarded in the absence of an
award of moral damages. Also, attorney's fees cannot be recovered in the absence of
stipulation between the parties.
Republic of the Philippines
Supreme Court
Manila
SECOND DIVISION
G.R. No. 102667. February 23, 2000
AMADO J. LANSANG, petitioner, vs. COURT OF APPEALS, GENERAL ASSEMBLY OF THE BLIND,
INC., and JOSE IGLESIAS, respondents.
The Solicitor General for petitioner.
Marlin F. Velasco for private respondents.
SYNOPSIS
In 1970, the General Assembly of the Blind, Inc. (GABI) started operating several kiosks in Rizal Park under
a verbal contract of lease with the National Parks Development Committee (NPDC), a government initiated
civic body engaged in the development of national parks. The contract was terminated in 1988 by the new
chairman of NPDC, herein petitioner, by serving written notice to respondent Iglesias, President of GABI,
with a demand to vacate the premises. GABI filed an action for damages and injunction with the trial court
alleging that petitioner acted beyond the scope of his authority when he showed malice and bad faith in
ordering GABI's ejectment from Rizal Park. Perusal of the complaint disclosed that petitioner, as Chairman
of NPDC, acted under the spirit of revenge, ill-will, evil motive and personal resentment in serving the
notice of termination to Iglesias who is totally blind and who was deceived into signing the notice. The
complaint failed to categorically state that he is being sued in that capacity. The trial court rendered
judgment dismissing the complaint. It ruled that the complaint was a suit against the State which could
not be sued without its consent. It further ruled that GABI, a mere concessionaire, cannot claim damages
for termination of contract. The decision was, however, reversed by the Court of Appeals ruling that the
LLB-1 Room EH308 SSDSG
mere allegation that a government official is being sued in his official capacity is not enough to protect him
from liability for acts done without or in excess of his authority. It found petitioner liable for moral and
exemplary damages and for attorneys fees. Hence, this petition.
The doctrine of state immunity from suit applies to complaints filed against public officials for acts done
in the performance of their duties and does cover unlawful acts or where he is being sued in his personal
capacity, although the acts complained of may have been committed while he occupied a public position.
Rizal Park is beyond the commerce of man and cannot be the subject of a lease contract.
A party allowed by accommodation to occupy spaces in the park may be asked at anytime to vacate the
premises.
With regard to damages, moral damages cannot be sustained in the absence of evidence to support a
claim of moral injury. Exemplary damages cannot be awarded in the absence of an award of moral
damages. Also, attorney's fees cannot be recovered in the absence of stipulation between the parties.
SYLLABUS
I. POLITICAL LAW; STATE IMMUNITY FROM SUIT DOCTRINE; APPLIES TO COMPLAINTS FILED
AGAINST PUBLIC OFFICIALS FOR ACTS DONE IN PERFORMANCE OF THEIR DUTIES. — The
doctrine of state immunity from suit applies to complaints filed against public officials for acts
done in the performance of their duties. The rule is that the suit must be regarded as one
against the state where satisfaction of the judgment against the public official concerned will
require the state itself to perform a positive act, such as appropriation of the amount necessary
to pay the damages awarded to the plaintiff.
II. ID.; ID.; DOES NOT APPLY TO UNLAWFUL ACTS OF PUBLIC OFFICIALS. — The rule does not
apply where the public official is charged in his official capacity for acts that are unlawful and
injurious to the rights of others. Public officials are not exempt, in their personal capacity, from
liability arising from acts committed in bad faith.
III. ID.; ID.; ID.; DOES NOT APPLY WHERE PUBLIC OFFICIAL IS SUED IN HIS PERSONAL CAPACITY.
— Neither does it apply where the public official is clearly being sued not in his official capacity
but in his personal capacity, although the acts complained of may have been committed while
he occupied a public position.
IV. ID.; ID.; ID.; CASE AT BAR. — We are convinced that petitioner is being sued not in his capacity
as NPDC chairman but in his personal capacity. The complaint filed by private respondents in
the RTC merely identified petitioner as chairman of the NPDC, but did not categorically state
that he is being sued in that capacity. Also, it is evident from paragraph 4 of said complaint that
petitioner was sued allegedly for having personal motives in ordering the ejectment of GABI
from Rizal Park.
V. ID.; ID.; ID.; PETITIONER AS CHAIRMAN OF NPDC, AGENCY TASKED TO ADMINISTER RIZAL
PARK, MAY VALIDLY DISCONTINUE ACCOMMODATION TO, AND EJECT, PARTIES OCCUPYING
AN OFFICE THEREAT. — Rizal Park is beyond the commerce of man and, thus, could not be the
subject of a lease contract. Admittedly, there was no written contract. That private respondents
Atty. Galleon USC College of Law and Governance
were allowed to occupy office and kiosk spaces in the park was only a matter of accommodation
by the previous administrator. This being so, also admittedly, petitioner may validly discontinue
the accommodation extended to private respondents, who may be ejected from the park when
necessary. Private respondents cannot and does not claim a vested right to continue to occupy
Rizal Park.
VI. CIVIL LAW; DAMAGES; MORAL DAMAGES; PROOF OF MORAL INJURY, REQUIRED FOR
AWARD THEREOF. — We find no evidence on record to support Iglesias' claim that he suffered
moral injury as a result of GABI's ejectment from Rizal Park. Absent any satisfactory proof upon
which the Court may base the amount of damages suffered, the award of moral damages
cannot be sustained.
VII. ID.; ID.; EXEMPLARY DAMAGES; AWARD THEREOF NOT PROPER IN ABSENCE OF MORAL,
TEMPERATE, LIQUIDATED OR COMPENSATORY DAMAGES. — Neither can we sustain the
award of exemplary damages, which may only be awarded in addition to moral, temperate,
liquidated, or compensatory damages.
VIII. ID.; ID.; ATTORNEY'S FEES; DISALLOWED IN ABSENCE OF STIPULATIONS BY PARTIES;
EXCEPTION NOT PRESENT IN CASE AT BAR. — We also disallow the award for attorney's fees,
which can only be recovered per stipulation of the parties, which is absent in this case. There
is no showing that any of the exceptions justifying the award of attorney's fees absent a
stipulation is present in this case.
DECISION
QUISUMBING, J p:
Before us is a petition to review the decision of the Court of Appeals in C.A. G.R. CV No. 27244, which set
aside the ruling of the Regional Trial Court, Manila, Branch 8, in Civil Case No. 88-43887, and ordered
petitioner Amado J. Lansang to pay private respondent Jose Iglesias P50,000.00 in moral damages,
P10,000.00 in exemplary damages and P5,000.00 in attorney's fees.
Like public streets, public parks are beyond the commerce of man. However, private respondents were
allegedly awarded a "verbal contract of lease" in 1970 by the National Parks Development Committee
(NPDC), a government initiated civic body engaged in the development of national parks, including Rizal
Park, but actually administered by high profile civic leaders and journalists. Whoever in NPDC gave such
"verbal" accommodation to private respondents was unclear, for indeed no document or instrument
appears on record to show the grantor of the verbal license to private respondents to occupy a portion of
the government park dedicated to the national hero's memory.
Private respondents were allegedly given office and library space as well as kiosks area selling food and
drinks. One such kiosk was located along T.M. Kalaw St., in front of the Army and Navy Club. Private
respondent General Assembly of the Blind, Inc. (GABI) was to remit to NPDC, 40 percent of the profits
derived from operating the kiosks, without again anything shown in the record who received the share of
the profits or how they were used or spent.
With the change of government after the EDSA Revolution, the new Chairman of the NPDC, herein
petitioner, sought to clean up Rizal Park. In a written notice dated February 23, 1988 and received by
private respondents on February 29, 1988, petitioner terminated the so-called verbal agreement with
GABI and demanded that the latter vacate the premises and the kiosks it ran privately within the public
park. In another notice dated March 5, 1988, respondents were given until March 8, 1988 to vacate.
LLB-1 Room EH308 SSDSG
The latter notice was signed by private respondent Iglesias, GABI president, allegedly to indicate his
conformity to its contents. However, Iglesias, who is totally blind, claims that he was deceived into signing
the notice. He was allegedly told by Ricardo Villanueva, then chief warden of Rizal Park, that he was merely
acknowledging receipt of the notice. Although blind, Iglesias as president was knowledgeable enough to
run GABI as well as its business.
On the day of the supposed eviction, GABI filed an action for damages and injunction in the Regional Trial
Court against petitioner, Villanueva, and "all persons acting on their behalf." The trial court issued a
temporary restraining order on the same day.
The TRO expired on March 28, 1988. The following day, GABI was finally evicted by NPDC.
GABI's action for damages and injunction was subsequently dismissed by the RTC, ruling that the complaint
was actually directed against the State which could not be sued without its consent. Moreover, the trial
court ruled that GABI could not claim damages under the alleged oral lease agreement since GABI was a
mere accommodation concessionaire. As such, it could only recover damages upon proof of the profits it
could realize from the concession. The trial court noted that no such proof was presented.
On appeal, the Court of Appeals reversed the decision of the trial court.
The Court of Appeals ruled that the mere allegation that a government official is being sued in his official
capacity is not enough to protect such official from liability for acts done without or in excess of his
authority. Granting that petitioner had the authority to evict GABI from Rizal Park, "the abusive and
capricious manner in which that authority was exercised amounted to a legal wrong for which he must
now be held liable for damages" according to the Court of Appeals.
The Court of Appeals noted that, as the trial court observed, the eviction of GABI came at the heels of two
significant incidents. First, after private respondent Iglesias extended monetary support to striking workers
of the NPDC, and second, after Iglesias sent the Tanodbayan, a letter on November 26, 1987, denouncing
alleged graft and corruption in the NPDC. These, according to the Court of Appeals, should not have been
taken against GABI, which had been occupying Rizal Park for nearly 20 years. GABI was evicted purportedly
for violating its verbal agreement with NPDC. However, the Court of Appeals pointed out that NPDC failed
to present proof of such violation.
The Court of Appeals found petitioner liable for damages under Articles 19, 21, and 24 of the Civil Code.
The Court of Appeals absolved from liability all other persons impleaded in GABI's complaint since it
appeared that they were merely acting under the orders of petitioner. The new officers of NPDC,
additionally impleaded by GABI, were likewise absolved from liability, absent any showing that they
participated in the acts complained of. Petitioner was ordered to pay private respondent Iglesias moral
and exemplary damages and attorney's fees.
Hence, this petition, in which petitioner raises the following issues:
I. WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT PRIVATE
RESPONDENTS' COMPLAINT AGAINST PETITIONER, AS CHAIRMAN OF NPDC, AND HIS CO-
DEFENDANTS IN CIVIL CASE NO. 88-43887, IS IN EFFECT A SUIT AGAINST THE STATE WHICH
CANNOT BE SUED WITHOUT ITS CONSENT.
II. WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT PETITIONER'S ACT OF
TERMINATING RESPONDENT GABI'S CONCESSION IS VALID AND DONE IN THE LAWFUL
PERFORMANCE OF OFFICIAL DUTY.
Atty. Galleon USC College of Law and Governance
Petitioner insists that the complaint filed against him is in reality a complaint against the State, which could
not prosper without the latter's consent. He anchors his argument on the fact that NPDC is a government
agency, and that when he ordered the eviction of GABI, he was acting in his capacity as chairman of NPDC.
Petitioner avers that the mere allegation that he was being sued in his personal capacity did not remove
the case from the coverage of the law of public officers and the doctrine of state immunity.
Petitioner points out that Iglesias signed the notice of eviction to indicate his conformity thereto. He
contends that as evidence of private respondents' bad faith, they sued petitioner instead of complying
with their undertaking to vacate their library and kiosk at Rizal Park.
Petitioner adds that during the actual eviction, no untoward incident occurred. GABI's properties were
properly inventoried and stored.
According to petitioner, the Court of Appeals' observation that the eviction was prompted by Iglesias'
support for striking NPDC workers and the letter-complaint sent to the Tanodbayan is merely conjectural.
Finally, petitioner avers that the move to evict GABI and award the spaces it occupied to another group
was an executive policy decision within the discretion of NPDC. GABI's possession of the kiosks as
concessionaire was by mere tolerance of NPDC and, thus, such possession may be withdrawn at any time,
with or without cause.
On the other hand, private respondents aver that petitioner acted beyond the scope of his authority when
he showed malice and bad faith in ordering GABI's ejectment from Rizal Park. Quoting from the decision
of the Court of Appeals, private respondents argue that petitioner is liable for damages for performing
acts "to injure an individual rather than to discharge a public duty."
While private respondents recognize the authority of petitioner to terminate the agreement with GABI "if
[the contract] is prejudicial to the interest of the NPDC,'' they maintain that petitioner's personal interest,
and not that of the NPDC, was the root cause of GABI's ejectment.
The doctrine of state immunity from suit applies to complaints filed against public officials for acts done
in the performance of their duties. The rule is that the suit must be regarded as one against the state
where satisfaction of the judgment against the public official concerned will require the state itself to
perform a positive act, such as appropriation of the amount necessary to pay the damages awarded to the
plaintiff.
The rule does not apply where the public official is charged in his official capacity for acts that are unlawful
and injurious to the rights of others. Public officials are not exempt, in their personal capacity, from liability
arising from acts committed in bad faith.
Neither does it apply where the public official is clearly being sued not in his official capacity but in his
personal capacity, although the acts complained of may have been committed while he occupied a public
position.
We are convinced that petitioner is being sued not in his capacity as NPDC chairman but in his personal
capacity. The complaint filed by private respondents in the RTC merely identified petitioner as chairman
of the NPDC, but did not categorically state that he is being sued in that capacity. Also, it is evident from
paragraph 4 of said complaint that petitioner was sued allegedly for having personal motives in ordering
the ejectment of GABI from Rizal Park.
LLB-1 Room EH308 SSDSG
"4. Defendant AMADO J. LANSANG, JR., the Chairman of the National Parks
Development Committee, acting under the spirit of revenge, ill-will, evil motive
and personal resentment against plaintiff JOSE IGLESIAS, served on the plaintiff
corporation a letter, dated February 23, 1988 terminating plaintiff's lease
agreement with a demand for the plaintiff corporation to vacate its office
premises. . ."
The parties do not dispute that it was petitioner who ordered the ejectment of GABI from their office and
kiosk at Rizal Park. There is also no dispute that petitioner, as chairman of the NPDC which was the agency
tasked to administer Rizal Park, had the authority to terminate the agreement with GABI and order the
organization's ejectment. The question now is whether or not petitioner abused his authority in ordering
the ejectment of private respondents.
We find, however, no evidence of such abuse of authority on record. As earlier stated, Rizal Park is beyond
the commerce of man and, thus, could not be the subject of a lease contract. Admittedly, there was no
written contract. That private respondents were allowed to occupy office and kiosk spaces in the park was
only a matter of accommodation by the previous administrator. This being so, also admittedly, petitioner
may validly discontinue the accommodation extended to private respondents, who may be ejected from
the park when necessary. Private respondents cannot and does not claim a vested right to continue to
occupy Rizal Park.
The Court of Appeals awarded private respondent Iglesias moral and exemplary damages and attorney's
fees. However, we find no evidence on record to support Iglesias' claim that he suffered moral injury as a
result of GABI's ejectment from Rizal Park. Absent any satisfactory proof upon which the Court may base
the amount of damages suffered, the award of moral damages cannot be sustained.
Neither can we sustain the award of exemplary damages, which may only be awarded in addition to moral,
temperate, liquidated, or compensatory damages. We also disallow the award for attorney's fees, which
can only be recovered per stipulation of the parties, which is absent in this case. There is no showing that
any of the exceptions justifying the award of attorney's fees absent a stipulation is present in this case.
WHEREFORE, the instant petition is GRANTED. The decision of the Court of Appeals in CA-G.R. CV No.
27244 is hereby SET ASIDE, and the DISMISSAL of the complaint for damages by the trial court for want of
merit is AFFIRMED. No costs.
SO ORDERED.
Bellosillo, Mendoza and De Leon, Jr., JJ., concur.
Buena, J., is on official leave.
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG

Republic of the Philippines vs Sandoval

GR 84607
March 19, 1993

FACTS
1. The heirs of the 12 rallyists who perished during the Mendiola massacre filed an action for
damages. Such action was filed against the government. This was by virtue of a
recommendation made by the Citizen's Mendiola Commission (created for the purpose of
conducting an investigation of the disorder, deaths and casualties that took place during the
Mendiola incident.) that the heirs and wounded victims of the incident be compensated by the
Govt.
2. Notwithstanding such recommendation, no concrete form of compensation was received by
the victims. The Caylo Group (the group of marchers in the said incident) filed a formal letter
of demand from the govt.
3. Still unheeded for almost a year, the group filed an action against the governmentt, together
w/ the military officers and personnel involved in the incident before the trial court.
4. Respondent Judge dismissed the complaint as against the RP on the ground that there was no
waiver by the State.
5. Hence the petition.

ISSUE
1. Whether or not state immunity can be invoked

RULING
1. The principle of immunity from suit is based on the very essence of sovereignty, and on the
practical ground that there can be no legal right as against the authority that makes the law on
which the right depends. It also rests on reasons of public policy -- that public service would be
hindered, and the public endangered, if the sovereign authority could be subjected to law suits
at the instance of every citizen and consequently controlled in the uses and dispositions of the
means required for the proper administration of the government.
Atty. Galleon USC College of Law and Governance
2. This is not a suit against the State with its consent.
a. Firstly, the recommendation made by the Mendiola Commission regarding
indemnification of the heirs and the victims of the incident by the government does
not in any way mean that liability automatically attaches to the State. The
Commission was merely a fact-finding body and its recommendation was not final
and executory.
b. Secondly, whatever acts or utterances that President Aquino may have done or said,
the same are not tantamount to the State having waived its immunity from suit.
Although consent to be sued may be given impliedly, such consent was not given in
this case.
c. Thirdly, the case does not qualify as a suit against the State.
3. Some instances when a suit against the State is proper are:
a. when the Republic is sued by name;
b. when the suit is against an unincorporated govt. agency;
c. when the suit is on its face against a govt. officer but the case is such that the
ultimate liability will belong not to the officer but to the government.
In this case, while the Republic is sued by name, the ultimate liability does not pertain to the government.
Although the military officers were discharging their official functions when the incident occurred, their
functions ceased to be official the moment they exceeded their authority.
Immunity from suit cannot institutionalize irresponsibility and non-accountability nor grant a privileged
status not claimed by any other official of the Republic.
The principle of state immunity from suit does not apply, as in this case, when the relief demanded by the
suit requires no affirmative official action on the part of the State nor the affirmative discharge of any
obligation w/c belongs to the State in its political capacity, even though the officers or agents who are
made defendants claim to hold or act only by virtue of a title of the state and as its agents and servants.
They are therefore liable for damages.
Republic of the Philippines
Supreme Court
Manila
EN BANC
G.R. No. 84607. March 19, 1993
REPUBLIC OF THE PHILIPPINES, GEN. RAMON MONTANO, GEN. ALFREDO LIM, GEN. ALEXANDER
AGUIRRE, COL. EDGAR DULA TORRES, COL. CEZAR NAZARENO, MAJ. FILEMON GASMEN, PAT. NICANOR
ABANDO, PFC SERAPIN CEBU, JR., GEN. BRIGIDO PAREDES, COL. ROGELIO MONFORTE, PFC ANTONIO
LUCERO, PAT. JOSE MENDIOLA, PAT. NELSON TUAZON, POLICE CORPORAL PANFILO ROGOS, POLICE LT.
JUAN B. BELTRAN, PAT. NOEL MANAGBAO, MARINE THIRD CLASS TRAINEE (3CT) NOLITO NOGATO, 3CT
ALEJANDRO B. NAGUIO, JR., EFREN ARCILLAS, 3CT AGERICO LUNA, 3CT BASILIO BORJA, 3CT MANOLITO
LUSPO, 3CT CRISTITUTO GERVACIO, 3CT MANUEL DELA CRUZ, JR., MARINE (CDC) BN., (CIVIL
DISTURBANCE CONTROL), MOBILE DISPERSAL TEAM (MDT), LT. ROMEO PAQUINTO, LT. LAONGLAANG
GOCE, MAJ. DEMETRIO DE LA CRUZ, POLICE CAPTAIN RODOLFO NAVAL, JOHN DOE, RICHARD DOE,
LLB-1 Room EH308 SSDSG
ROBERTO DOE AND OTHER DOES, petitioners, vs. HON. EDILBERTO G. SANDOVAL, Regional Trial Court
of Manila, Branch IX, ERLINDA C. CAYLAO, ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA
EVANGELIO, ELMA GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM, PURITA YUMUL, MIGUEL
ARABE, TERESITA ARJONA, RONALDO CAMPOMANES AND CARMENCITA ARDONI VDA. DE
CAMPOMANES, ROGELIO DOMUNICO, in their capacity as heirs of the deceased (ROBERTO C. CAYLAO,
SONNY "BOY" PEREZ, DIONESIO BAUTISTA, DANTE EVANGELIO, ADELFA ARIBE, DANILO ARJONA,
VICENTE CAMPOMANES, RONILO DOMUNICO) respectively; and (names of sixty-two injured victims)
EDDIE AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE MENSOLA,
ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO LABAMBA, JR., EFREN
MACARAIG, SOLOMON MANALOTO, ROMEO DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY CLEMENTE,
GERARDO COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR FONTANILLA, WILSON GARCIA,
CARLOS SIRAY, JOSE PERRAS, TOMAS VALLOS, ARNOLD ENAJE, MARIANITA DIMAPILIS, FRANCISCO
ANGELES, MARCELO ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS MENDOZA, VICTORINO QUIJANO,
JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS ALCANTARA, MAMERTO ALIAS, EMELITO
ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO CABALLES, JR., JAIME CALDETO, FABIAN
CANTELEJO, RODRIGO CARABARA, ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO DEMASACA,
FRANCISCO GONZALES, ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA, PERLITO SALAYSAY,
JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI, REMIGIO MAHALIN, BONG
MANLULO, ARMANDO MATIENZO, CARLO MEDINA, LITO NOVENARIO, and ROSELLA
ROBALE, respondents.
G.R. No. 84645. March 19, 1993
ERLINDA C. CAYLAO, ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO, ELMA
GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM, PURITA YUMUL, MIGUEL ARABE, TERESITA
ARJONA, RONALDO CAMPOMANES AND CARMENCITA ARDONI VDA. DE CAMPOMANES, ROGELIO
DOMUNICO, in their capacity as heirs of the deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ,
DIONESIO BAUTISTA, DANTE EVANGELIO, RODRIGO GRAMPA, ANGELITO GUTIERREZ, BERNABE
LAKINDANUM, ROBERTO YUMUL, LEOPOLDO ALONZO, ADELFA ARIBE, DANILO ARJONA, VICENTE
CAMPOMANES, RONILO DOMUNICO) respectively; and (names of sixty-two injured victims) EDDIE
AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE MENSOLA, ALBERT
PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO LABAMBA, JR. EFREN MACARAIG,
SOLOMON MANALOTO, ROMEO DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY CLEMENTE, GERARDO
COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR FONTANILLA, WILSON GARCIA, CARLOS SIRAY,
JOSE PERRAS, TOMAS VALLOS, ARNOLD ENAJE, MARIANITA DIMAPILIS, FRANCISCO ANGELES, MARCELO
ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS MENDOZA, VICTORINO QUIJANO, JOEY ADIME,
RESIENO ADUL, ALBERTO TARSONA, CARLOS ALCANTARA, MAMERTO ALIAS, EMELITO ALMONTE,
BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO CABALLES, JR., JAIME CALDETO, FABIAN
CANTELEJO, RODRIGO CARABARA, ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO DEMASACA,
FRANCISCO GONZALES, ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA, PERLITO SALAYSAY,
JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI, REMIGIO MAHALIN, BONG
MANLULO, ARMANDO MATIENZO, CARLO MEDINA, LITO NOVENARIO, ROSELLA ROBALE, petitioners, vs.
REPUBLIC OF THE PHILIPPINES, and HONORABLE EDILBERTO G. SANDOVAL, Regional Trial Court of
Manila, Branch 9,respondents.
SYLLABUS
I. POLITICAL LAW; PRINCIPLE OF STATE'S IMMUNITY FROM SUIT; CONSTRUED. — Under our
Constitution the principle of immunity of the government from suit is expressly provided in
Article XVI, Section 3. The principle is based on the very essence of sovereignty, and on the
practical ground that there can be no legal right as against the authority that makes the law on
which the right depends. It also rests on reasons of public policy — that public service would
be hindered, and the public endangered, if the sovereign authority could be subjected to law
Atty. Galleon USC College of Law and Governance
suits at the instance of every citizen and consequently controlled in the uses and dispositions
of the means required for the proper administration of the government.
II. ID.; ID.; NOT DEEMED WAIVED WHEN THE GOVERNMENT AUTHORIZES THE
INDEMNIFICATION FOR THE VICTIM OR THROUGH PUBLIC ADDRESSES MADE BY THE
PRESIDENT. — Petitioners (Caylao group) advance the argument that the State has impliedly
waived its sovereign immunity from suit. It is their considered view that by the
recommendation made by the Commission for the government to indemnity the heirs and
victims of the Mendiola incident and by the public addresses made by then President Aquino
in the aftermath of the killings, the State has consented to be sued. This is not a suit against the
State with its consent. Firstly, the recommendation made by the Commission regarding
indemnification of the heirs of the deceased and the victims of the incident by the government
does not in any way mean that liability automatically attaches to the State. It is important to
note that A.O. 11 expressly states that the purpose of creating the Commission was to have a
body that will conduct an "investigation of the disorder, deaths and casualties that took place."
In the exercise of its functions, A.O. 11 provides guidelines, and what is relevant to Our
discussion reads: "1. Its conclusions regarding the existence of probable cause for the
commission of any offense and of the persons probably guilty of the same shall be sufficient
compliance with the rules on preliminary investigation and the charges arising therefrom may
be filed directly with the proper court." In effect, whatever may be the findings of the
Commission, the same shall only serve as the cause of action in the event that any party decides
to litigate his/her claim. Therefore, the Commission is merely a preliminary venue. The
Commission is not the end in itself. Whatever recommendation it makes cannot in any way
bind the State immediately, such recommendation not having become final and executory. This
is precisely the essence of it being a fact-finding body. Secondly, whatever acts or utterances
that then President Aquino may have done or said, the same are not tantamount to the State
having waived its immunity from suit. The President's act of joining the marchers, days after
the incident, does not mean that there was an admission by the State of any liability. In fact to
borrow the words of petitioners (Caylao group), "it was an act of solidarity by the government
with the people." Moreover, petitioners rely on President Aquino's speech promising that the
government would address the grievances of the rallyists. By this alone, it cannot be inferred
that the State has admitted any liability, much less can it be inferred that it has consented to
the suit.
III. ID.; ID.; WHEN AVAILABLE; RULE; CASE AT BAR. — Some instances when a suit against the
State is proper are" (1) When the Republic is sued by name; (2) When the suit is against an
unincorporated government agency; (3) When the suit is on its face against a government
officer but the case is such that ultimate liability will belong not to the officer but to the
government. While the Republic in this case is sued by name, the ultimate liability does not
pertain to the government. Although the military officers and personnel, then party
defendants, were discharging their official functions when the incident occurred, their
functions ceased to be official the moment they exceeded their authority. Based on the
Commission findings, there was lack of justification by the government forces in the use of
firearms. Moreover, the members of the police and military crowd dispersal units committed a
prohibited act under B.P. Blg. 880 as there was unnecessary firing by them in dispersing the
marchers.
IV. ID.; ID.; CANNOT INSTITUTIONALIZE IRRESPONSIBILITY AND NON-ACCOUNTABILITY NOR
GRANT A PRIVILEGE STATUS NOT CLAIMED BY ANY OTHER OFFICIAL OF THE REPUBLIC. — As
early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea that
he is a public agent acting under the color of his office when his acts are wholly without
authority. Until recently in 1991, this doctrine still found application, this Court saying that
immunity from suit cannot institutionalize irresponsibility and non-accountability nor grant a
privileged status not claimed by any other official of the Republic. The military and police forces
were deployed to ensure that the rally would be peaceful and orderly as well as to guarantee
the safety of the very people that they are duty-bound to protect. However, the facts as found
by the trial court showed that they fired at the unruly crowd to disperse the latter.
LLB-1 Room EH308 SSDSG
V. ID.; ID.; DOES NOT APPLY WHEN THE RELIEF DEMANDED BY THE SUIT REQUIRES NO
AFFIRMATIVE OFFICIAL ACTION ON THE PART OF THE STATE NOR THE AFFIRMATIVE
DISCHARGE OF ANY OBLIGATION WHICH BELONGS TO THE STATE IN ITS POLITICAL CAPACITY.
— While it is true that nothing is better settled than the general rule that a sovereign state and
its political subdivisions cannot be sued in the courts except when it has given its consent, it
cannot be invoked by both the military officers to release them from any liability, and by the
heirs and victims to demand indemnification from the government. The principle of state
immunity from suit does not apply, as in this case, when the relief demanded by the suit
requires no affirmative official action on the part of the State nor the affirmative discharge of
any obligation which belongs to the State in its political capacity, even though the officers or
agents who are made defendants claim to hold or act only by virtue of a title of the state and
as its agents and servants. This Court has made it quite clear that even a "high position in the
government does not confer a license to persecute or recklessly injure another."
DECISION
CAMPOS, JR., J p:
People may have already forgotten the tragedy that transpired on January 22, 1987. It is quite ironic that
then, some journalists called it a Black Thursday, as a grim reminder to the nation of the misfortune that
befell twelve (12) rallyists. But for most Filipinos now, the Mendiola massacre may now just as well be a
chapter in our history books. For those however, who have become widows and orphans, certainly they
would not settle for just that. They seek retribution for the lives taken that will never be brought back to
life again.
Hence, the heirs of the deceased, together with those injured(Caylao group), instituted this petition,
docketed as G.R. No. 84645, under Section 1 of Rule 65 of the Rules of Court, seeking the reversal and
setting aside of the Orders of respondent Judge Sandoval, dated May 31 and August 8, 1988, dismissing
the complaint for damages of herein petitioners against the Republic of the Philippines in Civil Case. No.
88-43351.
Petitioner, the Republic of the Philippines, through a similar remedy, docketed as G.R. No. 84607, seeks to
set aside the Order of respondent Judge dated May 31, 1988, in Civil Case No. 88-43351 entitled "Erlinda
Caylao, et al. vs. Republic of the Philippines, et al."
The pertinent portion of the questioned Order dated May 31, 1988, reads as follows:
"With respect however to the other defendants, the impleaded Military Officers,
since they are being charged in their personal and official capacity, and holding
them liable, if at all, would not result in financial responsibility of the government,
the principle of immunity from suit can not conveniently and correspondingly be
applied to them.
WHEREFORE, the case as against the defendant Republic of the Philippines is
hereby dismissed. As against the rest of the defendants the motion to dismiss is
denied. They are given a period of ten (10) days from receipt of this order within
which to file their respective pleadings."
Atty. Galleon USC College of Law and Governance
On the other hand, the Order, dated August 8, 1988, denied the motions filed by both parties, for a
reconsideration of the abovecited Order, respondent Judge finding no cogent reason to disturb the said
order.
The massacre was the culmination of eight days and seven nights of encampment by members of the
militant Kilusang Magbubukid sa Pilipinas (KMP) at the then Ministry (now Department) of Agrarian
Reform (MAR) at the Philippine Tobacco Administration Building along Elliptical Road in Diliman, Quezon
City.
The farmers and their sympathizers presented their demands for what they called "genuine agrarian
reform". The KMP, led by its national president, Jaime Tadeo, presented their problems and demands,
among which were: (a) giving lands for free to farmers; (b) zero retention of lands by landlords; and (c)
stop amortizations of land payments.
The dialogue between the farmers and the MAR officials began on January 15, 1987. The two days that
followed saw a marked increase in people at the encampment. It was only on January 19, 1987 that Jaime
Tadeo arrived to meet with then Minister Heherson Alvarez, only to be informed that the Minister can
only meet with him the following day. On January 20, 1987, the meeting was held at the MAR conference
room. Tadeo demanded that the minimum comprehensive land reform program be granted immediately.
Minister Alvarez, for his part, can only promise to do his best to bring the matter to the attention of then
President Aquino, during the cabinet meeting on January 21, 1987.
Tension mounted the following day. The farmers, now on their seventh day of encampment, barricaded
the MAR premises and prevented the employees from going inside their offices. They hoisted the KMP flag
together with the Philippine flag.
At around 6:30 p.m. of the same day, Minister Alvarez, in a meeting with Tadeo and his leaders, advised
the latter to instead wait for the ratification of the 1987 Constitution and just allow the government to
implement its comprehensive land reform program. Tadeo, however, countered by saying that he did not
believe in the Constitution and that a genuine land reform cannot be realized under a landlord-controlled
Congress. A heated discussion ensued between Tadeo and Minister Alvarez. This notwithstanding,
Minister Alvarez suggested a negotiating panel from each side to meet again the following day.
On January 22, 1987, Tadeo's group instead decided to march to Malacañang to air their demands. Before
the march started, Tadeo talked to the press and TV media. He uttered fiery words, the most telling of
which were: ". . . inalis namin ang barikada bilang kahilingan ng ating Presidente, pero kinakailangan alisin
din niya ang barikada sa Mendiola sapagkat bubutasin din namin iyon at dadanak ang dugo . . ."
The farmers then proceeded to march to Malacañang, from Quezon Memorial Circle, at 10:00 a.m. They
were later joined by members of other sectoral organizations such as the Kilusang Mayo Uno (KMU),
Bagong Alyansang Makabayan (BAYAN), League of Filipino Students (LFS) and Kongreso ng Pagkakaisa ng
Maralitang Lungsod (KPML).
At around 1:00 p.m., the marchers reached Liwasang Bonifacio where they held a brief program. It was at
this point that some of the marchers entered the eastern side of the Post Office Building, and removed
the steel bars surrounding the garden. Thereafter, they joined the march to Malacañang. At about 4:30
p.m., they reached C.M. Recto Avenue.
In anticipation of a civil disturbance, and acting upon reports received by the Capital Regional Command
(CAPCOM) that the rallyists would proceed to Mendiola to break through the police lines and rush towards
Malacañang, CAPCOM Commander General Ramon E. Montaño inspected the preparations and adequacy
of the government forces to quell impending attacks.
LLB-1 Room EH308 SSDSG
OPLAN YELLOW (Revised) was put into effect. Task Force Nazareno under the command of Col. Cesar
Nazareno was deployed at the vicinity of Malacañang. The civil disturbance control units of the Western
Police District under Police Brigadier General Alfredo S. Lim were also activated.
Intelligence reports were also received that the KMP was heavily infiltrated by CPP/NPA elements and that
an insurrection was impending. The threat seemed grave as there were also reports that San Beda College
and Centro Escolar University would be forcibly occupied.
In its report, the Citizens' Mendiola Commission (a body specifically tasked to investigate the facts
surrounding the incident, Commission for short) stated that the government anti-riot forces were
assembled at Mendiola in a formation of three phalanges, in the following manner:
"(1)The first line was composed of policemen from police stations Nos. 3, 4, 6, 7,
8, 9 and 10 and the Chinatown detachment of the Western Police District. Police
Colonel Edgar Dula Torres, Deputy Superintendent of the Western Police District,
was designated as ground commander of the CDC first line of defense. The WPD
CDC elements were positioned at the intersection of Mendiola and Legarda
Streets after they were ordered to move forward from the top of Mendiola
bridge. The WPD forces were in khaki uniform and carried the standard CDC
equipment — aluminum shields, truncheons and gas masks.
(2)At the second line of defense about ten (10) yards behind the WPD policemen
were the elements of the Integrated National Police (INP) Field Force stationed
at Fort Bonifacio from the 61st and 62nd INP Field Force, who carried also the
standard CDC equipment — truncheons, shields and gas masks. The INP Field
Force was under the command of Police Major Demetrio dela Cruz.
(3)Forming the third line was the Marine Civil Disturbance Control Battalion
composed of the first and second companies of the Philippine Marines stationed
at Fort Bonifacio. The marines were all equipped with shields, truncheons and M-
16 rifles (armalites) slung at their backs, under the command of Major Felimon B.
Gasmin. The Marine CDC Battalion was positioned in line formation ten (10) yards
farther behind the INP Field Force.
At the back of the marines were four (4) 6 x 6 army trucks, occupying the entire
width of Mendiola street, followed immediately by two water cannons, one on
each side of the street and eight fire trucks, four trucks on each side of the street.
The eight fire trucks from Fire District I of Manila under Fire Superintendent Mario
C. Tanchanco, were to supply water to the two water cannons.
Stationed farther behind the CDC forces were the two Mobile Dispersal Teams
(MDT) each composed of two tear gas grenadiers, two spotters, an assistant
grenadier, a driver and the team leader.
In front of the College of the Holy Spirit near Gate 4 of Malacañang stood the
VOLVO Mobile Communications Van of the Commanding General of
CAPCOM/INP, General Ramon E. Montaño. At this command post, after General
Montaño had conferred with TF Nazareno Commander, Colonel Cezar Nazareno,
about the adequacy and readiness of his forces, it was agreed that Police General
Alfredo S. Lim would designate Police Colonel Edgar Dula Torres and Police Major
Conrado Francisco as negotiators with the marchers. Police General Lim then
proceeded to the WPD CDC elements already positioned at the foot of Mendiola
Atty. Galleon USC College of Law and Governance
bridge to relay to Police Colonel Torres and Police Major Francisco the
instructions that the latter would negotiate with the marchers."
The marchers, at around 4:30 p.m., numbered about 10,000 to 15,000. From C.M. Recto Avenue, they
proceeded toward the police lines. No dialogue took place between the marchers and the anti-riot squad.
It was at this moment that a clash occurred and, borrowing the words of the Commission "pandemonium
broke loose". The Commission stated in its findings, to wit:
". . . There was an explosion followed by throwing of pillboxes, stones and bottles.
Steel bars, wooden clubs and lead pipes were used against the police. The police
fought back with their shields and truncheons. The police line was breached.
Suddenly shots were heard. The demonstrators disengaged from the government
forces and retreated towards C.M. Recto Avenue. But sporadic firing continued
from the government forces.
After the firing ceased, two MDTs headed by Lt. Romeo Paguinto and Lt.
Laonglaan Goce sped towards Legarda Street and lobbed tear gas at the
remaining rallyist still grouped in the vicinity of Mendiola. After dispersing the
crowd, the two MDTs, together with the two WPD MDTs, proceeded to Liwasang
Bonifacio upon order of General Montaño to disperse the rallyists assembled
thereat. Assisting the MDTs were a number of policemen from the WPD, attired
in civilian clothes with white head bands, who were armed with long firearms."
After the clash, twelve (12) marchers were officially confirmed dead, although according to Tadeo, there
were thirteen (13) dead, but he was not able to give the name and address of said victim. Thirty-nine (39)
were wounded by gunshots and twelve (12) sustained minor injuries, all belonging to the group of the
marchers.
Of the police and military personnel, three (3) sustained gunshot wounds and twenty (20) suffered minor
physical injuries such as abrasions, contusions and the like.
In the aftermath of the confrontation, then President Corazon C. Aquino issued Administrative Order No.
11, (A.O. 11, for brevity) dated January 22, 1987, which created the Citizens' Mendiola Commission. The
body was composed of retired Supreme Court Justice Vicente Abad Santos as Chairman, retired Supreme
Court Justice Jose Y. Feria and Mr. Antonio U. Miranda, both as members. A.O. 11 stated that the
Commission was created precisely for the "purpose of conducting an investigation of the disorder, deaths,
and casualties that took place in the vicinity of Mendiola Bridge and Mendiola Street and Claro M. Recto
Avenue, Manila, in the afternoon of January 22, 1987". The Commission was expected to have submitted
its findings not later than February 6, 1987. But it failed to do so. Consequently, the deadline was moved
to February 16, 1987 by Administrative Order No. 13. Again, the Commission was unable to meet this
deadline. Finally, on February 27, 1987, it submitted its report, in accordance with Administrative Order
No. 17, issued on February 11, 1987.
In its report, the Commission recapitulated its findings, to wit:
1) The march to Mendiola of the KMP led by Jaime Tadeo, together with the other
sectoral groups, was not covered by any permit as required under Batas Pambansa
Blg. 880, the Public Assembly Act of 1985, in violation of paragraph (a) Section 13,
punishable under paragraph (a), Section 14 of said law.
2) The crowd dispersal control units of the police and the military were armed with .38
and .45 caliber handguns, and M-16 armalites, which is a prohibited act under
LLB-1 Room EH308 SSDSG
paragraph 4(g), Section 13, and punishable under paragraph (b), Section 14 of Batas
Pambansa Blg. 880.
3) The security men assigned to protect the WPD, INP Field Force, the Marines and
supporting military units, as well as the security officers of the police and military
commanders were in civilian attire in violation of paragraph (a), Section 10, Batas
Pambansa 880.
4) There was unnecessary firing by the police and military crowd dispersal control units
in dispersing the marchers, a prohibited act under paragraph (e), Section 13, and
punishable under paragraph (b), Section 14, Batas Pambansa Blg. 880.
5) The carrying and use of steel bars, pillboxes, darts, lead pipe, wooden clubs with
spikes, and guns by the marchers as offensive weapons are prohibited acts
punishable under paragraph (g), Section 13, and punishable under paragraph (e),
Section 14 of Batas Pambansa Blg. 880.
6) The KMP farmers broke off further negotiations with the MAR officials and were
determined to march to Malacañang, emboldened as they are, by the inflammatory
and incendiary utterances of their leader, Jaime Tadeo — "bubutasin namin ang
barikada. Dadanak and dugo . . . Ang nagugutom na magsasaka ay gagawa ng sariling
butas . . ."
7) There was no dialogue between the rallyists and the government forces. Upon
approaching the intersections of Legarda and Mendiola, the marchers began
pushing the police lines and penetrated and broke through the first line of the CDC
contingent.
8) The police fought back with their truncheons and shields. They stood their ground
but the CDC line was breached. There ensued gunfire from both sides. It is not clear
who started the firing.
9) At the onset of the disturbance and violence, the water cannons and tear gas were
not put into effective use to disperse the rioting crowd.
10) The water cannons and fire trucks were not put into operation because (a) there
was no order to use them; (b) they were incorrectly prepositioned; and (c) they were
out of range of the marchers.
11) Tear gas was not used at the start of the disturbance to disperse the rioters. After
the crowd had dispersed and the wounded and dead were being carried away, the
MDTs of the police and the military with their tear gas equipment and components
conducted dispersal operations in the Mendiola area and proceeded to Liwasang
Bonifacio to disperse the remnants of the marchers.
12) No barbed wire barricade was used in Mendiola but no official reason was given for
its absence."
From the results of the probe, the Commission recommended the criminal prosecution of four
unidentified, uniformed individuals, shown either on tape or in pictures, firing at the direction of the
marchers. In connection with this, it was the Commission's recommendation that the National Bureau of
Investigation (NBI) be tasked to undertake investigations regarding the identities of those who actually
fired their guns that resulted in the death of or injury to the victims of the incident. The Commission also
suggested that all the commissioned officers of both the Western Police District and the INP Field Force,
who were armed during the incident, be prosecuted for violation of paragraph 4(g) of Section 13, Batas
Pambansa Blg. 880, the Public Assembly Act of 1985. The Commission's recommendation also included
the prosecution of the marchers, for carrying deadly or offensive weapons, but whose identities have yet
to be established. As for Jaime Tadeo, the Commission said that he should be prosecuted both for violation
of paragraph (a), Section 13, Batas Pambansa Blg. 880 for holding the rally without a permit and for
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG
violation of Article 142, as amended, of the Revised Penal Code for inciting to sedition. As for the following controlled in the uses and dispositions of the means required for the proper administration of the
officers, namely: (1) Gen. Ramon E. Montaño; (2) Police Gen. Alfredo S. Lim; (3) Police Gen. Edgar Dula government.
Torres; (4) Police Maj. Demetrio dela Cruz; (5) Col. Cezar Nazareno; and (5) Maj. Felimon Gasmin, for their
failure to make effective use of their skill and experience in directing the dispersal operations in Mendiola,
This is not a suit against the State with its consent.
administrative sanctions were recommended to be imposed.

Firstly, the recommendation made by the Commission regarding indemnification of the heirs of the
The last and the most significant recommendation of the Commission was for the deceased and wounded
deceased and the victims of the incident by the government does not in any way mean that liability
victims of the Mendiola incident to be compensated by the government. It was this portion that petitioners
automatically attaches to the State. It is important to note that A.O. 11 expressly states that the purpose
(Caylao group) invoke in their claim for damages from the government.
of creating the Commission was to have a body that will conduct an "investigation of the disorder, deaths
and casualties that took place." In the exercise of its functions, A.O. 11 provides guidelines, and what is
Notwithstanding such recommendation, no concrete form of compensation was received by the victims. relevant to Our discussion reads:
Thus, on July 27, 1987, herein petitioners, (Caylao group) filed a formal letter of demand for compensation
from the Government. This formal demand was indorsed by the office of the Executive Secretary to the
"1.Its conclusions regarding the existence of probable cause for the commission
Department of Budget and Management (DBM) on August 13, 1987. The House Committee on Human
of any offense and of the persons probably guilty of the same shall be sufficient
Rights, on February 10, 1988, recommended the expeditious payment of compensation to the Mendiola
compliance with the rules on preliminary investigation and the charges arising
victims.
therefrom may be filed directly with the proper court."

After almost a year, on January 20, 1988, petitioners (Caylao group) were constrained to institute an action
In effect, whatever may be the findings of the Commission, the same shall only serve as the cause of action
for damages against the Republic of thePhilippines, together with the military officers, and personnel
in the event that any party decides to litigate his/her claim. Therefore, the Commission is merely a
involved in the Mendiola incident, before the trial court. The complaint was docketed as Civil Case No. 88-
preliminary venue. The Commission is not the end in itself. Whatever recommendation it makes cannot in
43351.
any way bind the State immediately, such recommendation not having become final and executory. This
is precisely the essence of it being a fact-finding body.
On February 23, 1988, the Solicitor General filed a Motion to Dismiss on the ground that the State cannot
be sued without its consent. Petitioners opposed said motion on March 16, 1988, maintaining that the
Secondly, whatever acts or utterances that then President Aquino may have done or said, the same are
State has waived its immunity from suit and that the dismissal of the instant action is contrary to both the
not tantamount to the State having waived its immunity from suit. The President's act of joining the
Constitution and the International Law on Human Rights.
marchers, days after the incident, does not mean that there was an admission by the State of any liability.
In fact to borrow the words of petitioners (Caylao group), "it was an act of solidarity by the government
Respondent Judge Sandoval, in his first questioned Order, dismissed the complaint as against with the people". Moreover, petitioners rely on President Aquino's speech promising that the government
the Republic of the Philippines on the ground that there was no waiver by the State. Petitioners (Caylao would address the grievances of the rallyists. By this alone, it cannot be inferred that the State has
group) filed a Motion for Reconsideration therefrom, but the same was denied by respondent judge in his admitted any liability, much less can it be inferred that it has consented to the suit.
Order dated August 8, 1988. Consequently, Caylao and her co-petitioners filed the instant petition.
Although consent to be sued may be given impliedly, still it cannot be maintained that such consent was
On the other hand, the Republic of the Philippines, together with the military officers and personnel given considering the circumstances obtaining in the instant case.
impleaded as defendants in the court below, filed its petition for certiorari.
Thirdly, the case does not qualify as a suit against the State.
Having arisen from the same factual beginnings and raising practically identical issues, the two (2) petitions
were consolidated and will therefore be jointly dealt with and resolved in this Decision.
Some instances when a suit against the State is proper are:

The resolution of both petitions revolves around the main issue of whether or not the State has waived its
immunity from suit.
Petitioners (Caylao group) advance the argument that the State has impliedly waived its sovereign
immunity from suit. It is their considered view that by the recommendation made by the Commission for
the government to indemnify the heirs and victims of the Mendiola incident and by the public addresses
made by then President Aquino in the aftermath of the killings, the State has consented to be sued.
Under our Constitution the principle of immunity of the government from suit is expressly provided in
Article XVI, Section 3. The principle is based on the very essence of sovereignty, and on the practical ground
that there can be no legal right as against the authority that makes the law on which the right depends. It
also rests on reasons of public policy — that public service would be hindered, and the public endangered,
if the sovereign authority could be subjected to law suits at the instance of every citizen and consequently
1) When the Republic is sued by name;
2) When the suit is against an unincorporated government agency;
3) When the suit is on its face against a government officer but the case is such that
ultimate liability will belong not to the officer but to the government.
While the Republic in this case is sued by name, the ultimate liability does not pertain to the government.
Although the military officers and personnel, then party defendants, were discharging their official
functions when the incident occurred, their functions ceased to be official the moment they exceeded
their authority. Based on the Commission findings, there was lack of justification by the government forces
in the use of firearms. Moreover, the members of the police and military crowd dispersal units committed
a prohibited act under B.P. Blg. 880 as there was unnecessary firing by them in dispersing the marchers.
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG
As early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea that he is a
public agent acting under the color of his office when his acts are wholly without authority. Until recently
in 1991, this doctrine still found application, this Court saying that immunity from suit cannot
institutionalize irresponsibility and non-accountability nor grant a privileged status not claimed by any
other official of the Republic. The military and police forces were deployed to ensure that the rally would
be peaceful and orderly as well as to guarantee the safety of the very people that they are duty-bound to
protect. However, the facts as found by the trial court showed that they fired at the unruly crowd to
disperse the latter.

While it is true that nothing is better settled than the general rule that a sovereign state and its political
subdivisions cannot be sued in the courts except when it has given its consent, it cannot be invoked by
both the military officers to release them from any liability, and by the heirs and victims to demand
indemnification from the government. The principle of state immunity from suit does not apply, as in this
Merritt vs Government of the Philippine Islands
case, when the relief demanded by the suit requires no affirmative official action on the part of the State
GR 11154
nor the affirmative discharge of any obligation which belongs to the State in its political capacity, even
March 21, 1916
though the officers or agents who are made defendants claim to hold or act only by virtue of a title of the
state and as its agents and servants. This Court has made it quite clear that even a "high position in the
FACTS
government does not confer a license to persecute or recklessly injure another."
1. Merritt, while riding his motorcycle was hit by an ambulance owned by the Philippine General
Hospital. It was driven by a driver employed by the hospital.
The inescapable conclusion is that the State cannot be held civilly liable for the deaths that followed the
incident. Instead, the liability should fall on the named defendants in the lower court. In line with the ruling 2. By reason of the resulting collusion, the plaintiff was so severely injured that, according to Dr.
of this court in Shauf vs. Court of Appeals, herein public officials, having been found to have acted beyond Saleeby, he was suffering from a depression in the left parietal region, a wound in the same
the scope of their authority, may be held liable for damages. place and in the back part of his head, while blood issued from his nose and he was entirely
unconscious. The marks revealed that he had one or more fractures of the skull and that the
grey matter and brain had suffered material injury.
WHEREFORE, finding no reversible error and no grave abuse of discretion committed by respondent Judge
in issuing the questioned orders, the instant petitions are hereby DISMISSED. 3. Upon recovery the doctor noticed that the plaintiff’s leg showed a contraction of an inch and a
half and a curvature that made his leg very weak and painful at the point of the fracture.
Examination of his head revealed a notable readjustment of the functions of the brain and
SO ORDERED. nerves.

Narvasa, C . J ., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, 4. As a consequence of the loss of his agility, energy, and ability, the plaintiff suffered in the
Bellosillo, Melo and Quiason, JJ., concur. efficiency of his work as a contractor, he had to dissolve the partnership he had formed with
the engineer, Wilson, 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
Gutierrez, Jr., J., on terminal leave. he had for the construction of the Uy Chaco building.
5. In order for Merritt to sue the Philippine government, Act No. 2457 was enacted by the
Philippine Legislature 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.
6. A suit was then filed before the CFI of Manila which fixed the responsibility for the collision
solely on the ambulance driver and determined the amount of damages to be awarded to
Merritt.
7. Both parties appealed from the decision, plaintiff Merritt as to the amount of damages and
defendant in rendering the amount against the government.
ISSUE
2. Whether or not the petitioner, in enacting Act No. 2457, simply waive its immunity from suit or
did it also concede its liability to the plaintiff
3. Whether or not the State is liable for the case at bar

RULING
1. No, the act of consenting to be sued or waiver of state immunity does not connote concession
of liability.
Atty. Galleon USC College of Law and Governance
2. By consenting to be sued, a state simply waives its immunity from suit. It does not thereby
concede its liability to the 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 submit itself to the jurisdiction of the court, subject to its right to
interpose any lawful defense.
3. Act No. 2457 authorizes E. Merritt to bring suit for the purpose of fixing the responsibility for
the collision and determining the amount of damages, if any, to which E. Merritt is entitled on
account of said collision. The government did not assume any liability under the Act.
4. The Government of the Philippine Islands is only liable, for the acts of its agents, officers and
employees when they act as special agents within the meaning of paragraph 5 of A1903, OCC
(par. 6, Art. 2180, NCC). A special agent 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.
5. The special agent acts in representation of the state and executes the trust confided to him.
This concept does not apply to any executive agent who is an employee of the active
administration and who on his own responsibility performs the functions w/c are inherent in
and naturally pertain to his office and w/c are regulated by law and the regulations. The
responsibility of the State is limited to that w/c it contracts through a special agent, duly
empowered by a definite order or commission to perform some act or charged w/ some
definite purpose w/c gives rise to the claim, and not were the claim is based on acts or
omissions imputable to a public official charged w/ some administrative or technical office who
can be held to the proper responsibility in the manner laid down by the law of civil
responsibility. The chauffeur of the ambulance of the General Hospital was not such an agent.
SHORT VERSION:
The Government of the Philippine Islands in only liable for the negligent acts of its officers, agents,
and employees when they are acting as special agents within the meaning of paragraph 5 of article
1903 of the Civil code, and a chauffeur of the General Hospital is not such a special agent.
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
G.R. No. 11154. March 21, 1916
E. MERRITT, plaintiff-appellant, vs. GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-
appellant.
Crossfield & O'Brien for plaintiff.
Attorney-General Avanceña for defendant.
SYLLABUS
I. DAMAGES; MEASURE OF. — Where the evidence shows that the plaintiff was wholly
incapacitated for six months it is an error to restrict the damages to a shorter period during
which he was confined in the hospital.
II. SPECIAL STATUTES; CONSENT OF THE STATE TO BE SUED; CONSTRUCTION. —
The Government of the Philippine Islands having been "modeled after the federal and state
LLB-1 Room EH308 SSDSG
governments of the United States' the decisions of the high courts of that country may be
used in determining the scope and purpose of a special statute.
III. ID.; ID.; ID. — The state not being liable to suit except by its express consent, an act
abrogating that immunity will be strictly construed.
IV. ID.; ID.; ID. — An act permitting a suit against the state gives rise to no liability not previously
existing unless it is clearly expressed in the act.
V. GOVERNMENT OF THE PHILIPPINE ISLANDS; LIABILITY FOR THE NEGLIGENT ACTS OF ITS
OFFICERS, AGENTS, AND EMPLOYEES. — The Government of the Philippine Islands in only
liable for the negligent acts of its officers, agents, and employees when they are acting as
special agents within the meaning of paragraph 5 of article 1903 of the Civil code, and a
chauffeur of the General Hospital is not such a special agent.
DECISION
TRENT, J p:
This is an appeal by both partied from a judgment of the Court of First Instance of the city of Manila in
favor of the plaintiff for the sum of P14,741, together with the costs of the cause.
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages which the
plaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and (2) "in limiting the
time when plaintiff was entirely disabled to two months and twenty-one days and fixing the damage
accordingly in the sum of P2,666, instead of P6,000 as claimed by plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding that the
collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due to the
negligence of the chauffeur; (b) in holding that the Government of the PhilippineIslands is liable for the
damages sustained by the plaintiff as a result of the collision, even if it be true that collision was due to
the negligence of the chauffeur; and (c) in rendering judgment against the defendant for the sum of
P14,741.
The trial court's findings of fact, which are fully supported by the record, are as follows:
"It is a fact not disputed by counsel for the defendant that when the plaintiff,
riding on a motorcycle, was going toward the western part of Calle Padre Faura,
passing along the west side thereof at a speed of ten to twelve miles and hour,
upon crossing Taft Avenue and when he was ten feet from the southwestern
intersection of said streets, the General Hospital ambulance, upon reaching said
avenue, instead of turning toward the south, after passing the center thereof, so
that it would be on the left side of said avenue, as is prescribed by the ordinance
and the Motor Vehicle Act, 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 placed
there.
"By reason of the resulting collision, the plaintiff was so severely injured that,
according to Dr. Saleeby, who examined him on the very same day that he was
taken to the General Hospital, he was suffering from a depression in the left
parietal region, a wound in the same place and in beck part of his head, while
blood issued from his nose and he was entirely unconscious.
"The marks revealed that he had one or more fractures of the skull and that the
grey matter and brain mass had suffered material injury. At ten o'clock of the
night in question, which was the time set for performing the operation, his pulse
Atty. Galleon USC College of Law and Governance
was so weak and so irregular that, in his opinion, there was little hope that he
would live. His right leg was broken in such a way that the fracture extended to
the outer skin in such manner that it might be regarded as double and the wound
would be expose to infection, for which reason it was of the most serious nature.
"At another examination six days before the day of the trial, Dr. Saleeby notice
that the plaintiff's leg showed a contraction of an inch and a half and a curvature
that made his leg very weak and painful at the point of the fracture. Examination
of his head revealed a notable re-adjustment of the functions of the brain and
nerves. The patient apparently was slightly deaf, had a slight weakness in his eyes
and in his mental condition. This latter weakness was always noticed when the
plaintiff had to do any difficult mental labor, especially when he attempted to use
his memory for mathematical calculations.
"According to the various merchants who testified as witnesses, the plaintiff's
mental and physical condition prior to the accident was excellent, and that after
having received the injuries that have been discussed, his physical condition had
undergone a noticeable depreciation, for he had lost the agility, energy, and
ability that he had constantly displayed before the accident as one of the best
constructors of wooden buildings and he could not now earn even a half of the
income that he had secured for his work because he had lost 50 per cent of his
efficiency. As a contractor, he could no longer, as he had before done, climb up
ladders and scaffoldings to reach the highest parts of the building.
"As a consequence of the loss the plaintiff suffered in the efficiency of his work
as a contractor, he had to dissolve the partnership he had formed with the
engineer, Wilson, 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."
We may say at the outset that we are in full accord with the trial court to the effect that the collision
between the plaintiff's motorcycle and the ambulance of the General Hospital was due solely to the
negligence of the chauffeur.
The two items which constitute a part of the P14,741 and which are drawn in question by the plaintiff
are (a) P5,000, the amount awarded for permanent injuries, and (b) the P2,666, the amount allowed
for the loss of wages during the time the plaintiff was incapacitated from pursuing his occupation. We
fund nothing in the record which would justify us in increasing the amount of the first. as to the second,
the record shows, and the trial court so found, that the plaintiff's services as a contractor were worth
P1,000 per month. The court, however, limited the time to two months and twenty-one days, which
the plaintiff was actually confined in the hospital. In this we think there was error, because it was clearly
established that the plaintiff was wholly incapacitated for a period of sex months. The mere fact that
he remained in the hospital only two months and twenty-one days while the remainder of the six
months was spent in his home, would not prevent recovery for the whole time. We, therefore, find that
the amount of damages sustained by the plaintiff, without any fault on his part, is P18,075.
As the negligence which caused the collision is a tort committed by an agent or employee of
the Government, the inquiry at once arises whether the Government is legally liable for the damages
resulting therefrom.
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 saidIslands to
appear in said suit.
LLB-1 Room EH308 SSDSG
"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 recommend
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 thePhilippine Islands is hereby authorized and
directed to appear at the trial on the behalf of the Government of said Islands, to
defend saidGovernment at the same.
"SEC. 2.This Act shall take effect on its passage.
"Enacted, February 3, 1915."
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 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, . . . ." These were the two questions submitted to the court for determination. The
Act was passed "in order that said questions may be decided." We have "decided" that the accident
was due solely to the negligence of the chauffeur, who was at the time an employee of the
defendant, and we have also fixed the amount of damages sustained by the plaintiff as a result of
the collision. Does the Act authorize us to hold that the Government is legally liable for that amount?
If not, we must look elsewhere for such authority, if it exists.
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.
Atty. Galleon USC College of Law and Governance
"The Government," says Justice Story, "does not undertake to guarantee to any person the fidelity
of the officers or agents whom it employs, since that would involve it in all its operations in endless
embarrassments, difficulties and losses, which would be subversive of the public interest."
(Claussen vs. City of Luverne, 103 Minn., 491, citing U.S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199;
and Beersvs. State, 20 How., 527; 15 L. Ed., 991.)
In the case of Melvin vs. State ( 121 Cal., 16), the plaintiff sought to recover damages from the state
for personal injuries received on account of the negligence of the state officers at the state fair, a
state institution created by the legislature for the purpose of improving agricultural and kindred
industries; to disseminate information calculated to educate and benefit the industrial classes; and
to advance to educate and benefit the industrial classes; and to advance by such means the material
interests of the state, being objects similar to those sought by the public school system. In passing
upon the question of the state's liability for the negligent acts of its officers or agents, the court said:
"No claim arises against any government in favor of an individual, by reason of
the misfeasance, laces, or unauthorized exercise of powers by its officers or
agents." (Citing Gibbons vs. U.S., 8 Wall., 269; Clodfelter vs. State, 86 N.C., 51, 53;
41 Am. Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158;
Green vs. State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203;
Story on Agency, sec. 319.)
As to the scope of legislative enactments permitting individuals to sue the state where the cause of
action arises out of either tort 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."
In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of 1913,
which authorized the bringing of this suit, read:
"SECTION 1.Authority is hereby given to George Apfelbacher, of the town of
Summit, Waukesha County, Wisconsin, to bring suit in such court or courts and
in such form or forms as he may be advised for the purpose of settling and
determining all controversies which he may now have with the State of
Wisconsin, or its duly authorizes officers and agents, relative to the mill property
of said George Apfelbacher, the fish hatchery of the State Wisconsin on the Bark
River, and the mill property of Evan Humphrey at the lower end of Nagawicka
Lake, and relative to the use of the waters of said Bark River and Nagawicka Lake,
all in the county of Waukesha, Wisconsin."
In determining the scope of this act, the court said;
"Plaintiff claims that by the enactment of this law the legislature admitted liability
on the part of the state for the acts of its officers, and that the suit now stands
just as it would stand between private parties. It is difficult to see how the act
does, or was intended to do, more than remove the state's immunity from suit.
It simply gives authority commence suit for the purpose of settling plaintiff's
controversies with the state. Nowhere in the act is there a whisper or suggestion
that the court or courts in the disposition of the suit shall depart from well
established principles of law, or that the amount of damages is the only question
to be settled. The act opened the door of the court to the plaintiff. It did not pass
upon the question of liability, but left the suit just where it would be in the
absence of the state's immunity from suit. If the Legislature had intended to
LLB-1 Room EH308 SSDSG
change the rule that obtained in this state so long and to declare liability on the
part of the state, it would not have left so important a matter to mere inference
but would have done so in express terms. (Murdoc Grate Co. vs. Commonwealth,
152 Mass., 28; 24 N. E., 854; 8 L. R.A., 399)"
In Denning vs. state (123 Cal., 316), the provisions of the Act of 1893, relied upon and considered, are
as follows:
"All persons who have, or shall hereafter have claims on contract or for
negligence against the state not allowed by the state board of examiners, are
hereby authorized, on the terms and conditions herein contained, to bring suit
thereon against the state in any of the courts of this state of competent
jurisdiction, and prosecute the same to final judgment. The rules of practice in
civil cases shall apply to such suits, except as herein otherwise provided."
And the court said:
"This statute has been considered by this court in at least two cases, arising under
different facts, and in both it was held that said statute did not create any liability
or cause of action against the state where none existed before, but merely gave
an additional remedy to enforce such liability as would have existed if the statute
had not been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158;
Melvin vs. State, 121 Cal., 16.)"
A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims against
the commonwealth, whether at law or in equity," with an exception not necessary to be here
mentioned. In construing this statute the court, in Murdock Grate Co. vs. Commonwealth (152 Mass.,
28), said:
"The statute we are discussing discloses no intention to create against the state
a new and heretofore unrecognized class of liabilities, but only an intention to
provide a judicial tribunal where well recognized existing liabilities can be
adjudicated."
In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the statute
of New York, jurisdiction of claims for damages for injuries in the management of the canals such as the
plaintiff had sustained, Chief Justice Ruger remarks; "It must be conceded
that the state can be made liable for injuries arising from the negligence of its agents or
servants, only by force of some positive statute assuming such liability."
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 obligation to indemnify for damages which a third person causes
another by his fault or negligence is based, as is evidenced by the same Law 3,
Atty. Galleon USC College of Law and Governance
Title 15, Partida 7, on that the person obligated, by his own fault or negligence,
takes part in the act or omission of the third party who caused the damage. It
follows therefrom that the state by virtue of such provision of law, is not
responsible for the damages suffered by private individuals in consequence of
acts performed by its employees in the discharge of the functions pertaining to
their office, because neither fault nor even negligence can be presumed on the
part of the state in the organization of branches of the public service and in the
appointment of its agents; on the contrary, we must presuppose all foresight
humanly possible on its part in order that each branch of service serves the
general weal and that of private persons interested in its operation. Between
these latter and the state therefore, no relations of a private nature governed by
the civil law can arise except in a case where the state acts as a judicial person
capable of acquiring rights and contracting obligations." (Supreme Court of Spain,
January 7, 1898; 83 Jur. Civ., 24.)
"That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which
arise out of fault or negligence; and whereas in the first articles thereof, No. 1902,
where the general principle is laid down that where a person who by an act or
omission causes damage to another through fault or negligence, shall be obliged
to repair the damage so done, reference is made to acts or omissions of the
persons who directly or indirectly cause the damage, the following article refers
to third persons and imposes an identical obligation upon those who maintain
fixed relations of authority and superiority over the authors of the damage,
because the law presumes that in consequence of such relations the evil caused
by their own fault or negligence is imputable to them. This legal presumption
gives way to proof, however, because, as held in the last paragraph of article
1903, responsibility for acts of third persons ceases when the persons mentioned
in said article prove that they employed all the diligence of a good father of a
family to avoid the damage, and among these persons, called up[on to answer in
a direct and not a subsidiary manner, are found, in addition to the mother or the
father in a proper case, guardians and owners or director of an establishment or
enterprise, the state, but not always, except when it acts through the agency of
a special agent, doubtless because and only in this case, the fault or negligence,
which is the original basis of this kind of objections, must be presumed to lie with
the state.
LLB-1 Room EH308 SSDSG
"That according to paragraph 5 of article 1903 of the Civil Code and the principle
laid down in a decision, among others, of the 18th of May, 1904, in a damage
case, the responsibility of the state is limited to that which it contracts through a
special agent, duly empowered by a definite order or commission to perform
some act or charged with some definite purpose which gives rise to the claim, and
not where the claim is based on acts or omissions imputable to a public official
charge with some administrative or technical office who can be held to the
proper responsibility in the manner laid down by the law of civil responsibility.
Consequently, the trial court in not so deciding and in sentencing the said entity
to the payment of damages, caused by an official of the second class referred to,
has by erroneous interpretation infringed the provisions of articles 1902 and
1903 of the Civil Code." (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146)
It is, therefore, evident 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.
For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance.
Whether the Government intends to make itself legally liable for the amount of damages above set
forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, by
legislative enactment and by appropriating sufficient funds therefor, we are not called upon to
determine. This matter rests solely with the Legislature and not with the courts.
Arellano, C.J., Torres, Johnson and Moreland, JJ., concur.

"That although in some cases the state might by virtue of the general principle
set forth in article 1902 respond for all the damage that is occasioned to private
parties by orders or resolutions which by fault or negligence are made by
branches of the central administration acting in the name and representation of
the state itself and as an external expression of its sovereignty in the exercise of
its executive powers, yet said article is not applicable in the case of damages said
to have been occasioned to the petitioners by an executive official, acting in the
exercise of his powers, in proceedings to enforce the collections of certain
property taxes owing by the owner of the property which they hold in sublease.

"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 executed the trust confided to him.
this concept does not apply to any executive agent who is an employee of the active
administration and who in 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.)
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG

Case Digest
US vs Ruiz
GR L-35645
May 22, 1985

FACTS
1. US had a naval base in Subic, Zambales as provided in the Military Bases Agreement between
the Philippines and US.
2. US invited the submissions of bids for the following projects:
a. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.
b. 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.
3. Private respondent Eligio de Guzman & Co., Inc. submitted bids and received 2 telegrams
requesting it to confirm its price proposals and for the name of its bonding company. The
company complied with the requests.
4. 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.
5. Private respondent then filed a suit with the Court of First Instance of Rizal for specific
performance against the petitioners claiming that the request to confirm a price proposal
confirms the acceptance of a bid pursuant to defendant United States' bidding practices.
6. Defendants questioned 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.
7. Petitioners’ motion to dismiss and 2 motions for reconsideration were dismissed.
8. Hence the instant petition.

ISSUE
6. Whether or not the United States Naval Base in bidding for said contracts exercises
governmental functions to be able to invoke state immunity

RULING
1. Yes, the petitioners are able to invoke state immunity.
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;
Atty. Galleon USC College of Law and Governance
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.
Lower court erred when it said “It is the Court's considered opinion that entering into a contract
for the repair of wharves or shoreline is certainly not a governmental function although it may
partake of a public nature or character.”
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.
WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil
Case No. is dismissed. Costs against the private respondent.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-35645 May 22, 1985
UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT GOHIER,
petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and ELIGIO DE GUZMAN
& CO., INC., respondents.
Sycip, Salazar, Luna & Manalo & Feliciano Law for petitioners.
Albert, Vergara, Benares, Perias & Dominguez Law Office for respondents.
ABAD SANTOS, J.:
This is a petition to review, set aside certain orders and restrain the respondent judge from trying Civil
Case No. 779M of the defunct Court of First Instance of Rizal.
The factual background is as follows:
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
LLB-1 Room EH308 SSDSG
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." (Rollo, p. 50.)
Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the
issuance of the writ of preliminary injunction. The company opposed the motion. The trial court denied
the motion and issued the writ. The defendants moved twice to reconsider but to no avail. Hence the
instant petition which seeks to restrain perpetually the proceedings in Civil Case No. 779-M for lack of
jurisdiction on the part of the trial court.
The petition is highly impressed with merit.
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 respondent judge recognized the restrictive doctrine of State immunity when he said in his Order
denying the defendants' (now petitioners) motion: " A distinction should be made between a strictly
governmental function of the sovereign state from its private, proprietary or non- governmental acts
(Rollo, p. 20.) However, the respondent judge also said: "It is the Court's considered opinion that entering
into a contract for the repair of wharves or shoreline is certainly not a governmental function altho it may
partake of a public nature or character. As aptly pointed out by plaintiff's counsel in his reply citing the
ruling in the case of Lyons, Inc., [104 Phil. 594 (1958)], and which this Court quotes with approval, viz.:
It is however contended that when a sovereign state enters into a contract with a
private person, the state can be sued upon the theory that it has descended to the
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG
level of an individual from which it can be implied that it has given its consent to be but by the said U.S. Government. On the basis of the ruling in the case of Land vs. Dollar already cited, and
sued under the contract. ... on what we have already stated, the present action must be considered as one against the U.S.
Government. It is clear hat the courts of the Philippines including the Municipal Court of Manila have no
xxx xxx xxx jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was raised and
We agree to the above contention, and considering that the United States interposed at the very beginning of the action. The U.S. Government has not , given its consent to the filing
government, through its agency at Subic Bay, entered into a contract with appellant of this suit which is essentially against her, though not in name. Moreover, this is not only a case of a citizen
for stevedoring and miscellaneous labor services within the Subic Bay Area, a U.S. filing a suit against his own Government without the latter's consent but it is of a citizen filing an action
Naval Reservation, it is evident that it can bring an action before our courts for any against a foreign government without said government's consent, which renders more obvious the lack of
contractual liability that that political entity may assume under the contract. The jurisdiction of the courts of his country. The principles of law behind this rule are so elementary and of
trial court, therefore, has jurisdiction to entertain this case ... (Rollo, pp. 20-21.) such general acceptance that we deem it unnecessary to cite authorities in support thereof. (At p. 323.)
In Syquia,the United States concluded contracts with private individuals but the contracts notwithstanding
the States was not deemed to have given or waived its consent to be sued for the reason that the contracts
The reliance placed on Lyons by the respondent judge is misplaced for the following reasons: were for jure imperii and not for jure gestionis.
In Harry Lyons, Inc. vs. The United States of America, supra, plaintiff brought suit in the Court of First
Instance of Manila to collect several sums of money on account of a contract between plaintiff and
defendant. The defendant filed a motion to dismiss on the ground that the court had no jurisdiction over WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil
defendant and over the subject matter of the action. The court granted the motion on the grounds that: Case No. is dismissed. Costs against the private respondent.
(a) it had no jurisdiction over the defendant who did not give its consent to the suit; and (b) plaintiff failed
to exhaust the administrative remedies provided in the contract. The order of dismissal was elevated to
this Court for review. Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana, * Escolin, Relova, Gutierrez, Jr., De la
Fuente, Cuevas and Alampay, JJ., concur.
In sustaining the action of the lower court, this Court said:
It appearing in the complaint that appellant has not complied with the procedure
laid down in Article XXI of the contract regarding the prosecution of its claim against Fernando, C.J., took no part.
the United States Government, or, stated differently, it has failed to first exhaust its
administrative remedies against said Government, the lower court acted properly
in dismissing this case.(At p. 598.)
It can thus be seen that the statement in respect of the waiver of State immunity
from suit was purely gratuitous and, therefore, obiter so that it has no value as an
imperative authority.
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 is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case the plaintiffs
leased three apartment buildings to the United States of America for the use of its military officials. The
plaintiffs sued to recover possession of the premises on the ground that the term of the leases had expired.
They also asked for increased rentals until the apartments shall have been vacated.

The defendants who were armed forces officers of the United States moved to dismiss the suit for lack of
jurisdiction in the part of the court. The Municipal Court of Manila granted the motion to dismiss; sustained
by the Court of First Instance, the plaintiffs went to this Court for review on certiorari. In denying the
petition, this Court said:
On the basis of the foregoing considerations we are of the belief and we hold that the real party defendant
in interest is the Government of the United States of America; that any judgment for back or Increased
rentals or damages will have to be paid not by defendants Moore and Tillman and their 64 co-defendants
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG
FACTS
1. Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of Cebu City as
shown by Transfer Certificate of Title. No annotation in favor of the government of any right or
interest in the property appears at the back of the certificate. Without prior expropriation or
negotiated sale, the government used a portion of said lot for the construction of the Mango
and Gorordo Avenues.
2. It appears that said avenues were already existing in 1921 although "they were in bad condition
and very narrow, unlike the wide and beautiful avenues that they are now," and "that the
tracing of said roads was begun in 1924, and the formal construction in 1925." *
3. On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting
payment of the portion of her lot which had been appropriated by the government. The claim
was indorsed to the Auditor General, who disallowed it in his 9th Indorsement dated December
9, 1958.
4. Petitioner then filed complaint with lower court for the recovery and ownership of said lot.
5. Within the reglementary period the defendants filed a joint answer denying the material
allegations of the complaint and interposing the following affirmative defenses, to wit:
a. that the action was premature, the claim not having been filed first with the Office
of the Auditor General
b. that the right of action for the recovery of any amount which might be due the
plaintiff, if any, had already prescribed
c. that the action being a suit against the Government, the claim for moral damages,
attorney's fees and costs had no valid basis since as to these items the Government
had not given its consent to be sued
d. that inasmuch as it was the province of Cebu that appropriated and used the area
involved in the construction of Mango Avenue, plaintiff had no cause of action
against the defendants.
6. Lower court and CA dismissed case for lack for jurisdiction. Hence the petition.

ISSUE
4. Whether or not the petitioner may properly sue the government under the facts of the case

RULING
1. Yes, the petitioner may sue the government but a suit is not the proper relief or remedy.
In the case of Ministerio vs. Court of First Instance of Cebu, involving a claim for payment of
the value of a portion of land used for the widening of the Gorordo Avenue in Cebu City, this
Court, through Mr. Justice Enrique M. Fernando, held that where the government takes away
property from a private landowner for public use without going through the legal process of
expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the
government without thereby violating the doctrine of governmental immunity from suit
without its consent.
Considering that no annotation in favor of the government appears at the back of her certificate
of title and that she has not executed any deed of conveyance of any portion of her lot to the
government, the appellant remains the owner of the whole lot. As registered owner, she could
Amigable vs Cuenca bring an action to recover possession of the portion of land in question at anytime because
GR L - 26400 possession is one of the attributes of ownership.
February 29, 1972
However, since restoration of possession of said portion by the government is neither
convenient nor feasible at this time because it is now and has been used for road purposes, the
Atty. Galleon USC College of Law and Governance
only relief available is for the government to make due compensation which it could and should
have done years ago. To determine the due compensation for the land, the basis should be the
price or value thereof at the time of the taking.
SHORT VERSION:
Considering that no annotation in favor of the government appears at the back of her certificate of
title and that she has not executed any deed of conveyance of any portion of her lot to the
government, the appellant remains the owner of the whole lot. As registered owner, she could bring
an action to recover possession of the portion of land in question at anytime because possession is
one of the attributes of ownership. However, since restoration of possession of said portion by the
government is neither convenient nor feasible at this time because it has been and is now being used
for road purposes, the only relief available is for the government to make due compensation which
it could and should have done years ago.
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
G.R. No. L-26400. February 29, 1972
VICTORIA AMIGABLE, plaintiff-appellant, vs. NICOLAS CUENCA, as Commissioner of Public
Highways and REPUBLIC OF THE PHILIPPINES, defendants-appellees.
Quirico del Mar, Domingo Antigua, Antonio Paulin and N. Capangpangan for plaintiff and appellant.
Assistant Solicitor General Guillermo Torres and Solicitor Dominador L. Quiroz for defendants and
appellees.
SYLLABUS
I. POLITICAL LAW; EMINENT DOMAIN; PROJECT USED BY GOVERNMENT FOR ROAD PURPOSES;
RIGHTS OR REGISTERED OWNER TO DUE COMPENSATION ANYTIME. — Considering that no
annotation in favor of the government appears at the back of her certificate of title and that
she has not executed any deed of conveyance of any portion of her lot to the government, the
appellant remains the owner of the whole lot. As registered owner, she could bring an action
to recover possession of the portion of land in question at anytime because possession is one
of the attributes of ownership. However, since restoration of possession of said portion by the
government is neither convenient nor feasible at this time because it has been and is now being
used for road purposes, the only relief available is for the government to make due
compensation which it could and should have done years ago.
II. ID.; ID.; ID.; ID.; RIGHT TO DAMAGES. — The owner of the land is entitled to damages in the
form of legal interest on the price of the land from the time it was taken up to the time that
payment is made by the government. In addition, the government should pay for attorney's
fees, the amount of which should be fixed by the trial court after hearing.
III. ID.; ID.; BASIS FOR DUE COMPENSATION. — To determine the due compensation for the land
appropriated by the Government, the basis should be the price or value thereof at the time of
the taking.
LLB-1 Room EH308 SSDSG
DECISION
MAKALINTAL, J p:
This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No. R-5977,
dismissing the plaintiff's complaint.
Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad Estate in
Cebu City as shown by Transfer Certificate of Title No. T-18060, which superseded Transfer Certificate of
Title No. RT-3272 (T-3435) issued to her by the Register of Deeds of Cebu on February 1, 1924. No
annotation in favor of the government of any right or interest in the property appears at the back of the
certificate. Without prior expropriation or negotiated sale, the government used a portion of said lot, with
an area of 6,167 square meters, for the construction of the Mango and Gorordo Avenues.
It appears that said avenues were already existing in 1921 although "they were in bad condition and very
narrow, unlike the wide and beautiful avenues that they are now," and "that the tracing of said roads was
begun in 1924, and the formal construction in 1925."
On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting payment of the
portion of her lot which had been appropriated by the government. The claim was indorsed to the Auditor
General, who disallowed it in his 9th Indorsement dated December 9, 1958. A copy of said indorsement
was transmitted to Amigable's counsel by the Office of the President on January 7, 1959.
On February 6, 1959 Amigable filed in the court a quo a complaint, which was later amended on April 17,
1959 upon motion of the defendants, against the Republic of the Philippines and Nicolas Cuenca, in his
capacity as Commissioner of Public Highways for the recovery of ownership and possession of the 6,167
square meters of land traversed by the Mango and Gorordo Avenues. She also sought the payment of
compensatory damages in the sum of P50,000.00 for the illegal occupation of her land, moral damages in
the sum of P25,000.00, attorney's fees in the sum of P5,000.00 and the costs of the suit.
Within the reglementary period the defendants filed a joint answer denying the material allegations of the
complaint and interposing the following affirmative defenses, to wit:
1. that the action was premature, the claim not having been filed first with the Office of the
Auditor General
2. that the right of action for the recovery of any amount which might be due the plaintiff, if any,
had already prescribed
3. that the action being a suit against the Government, the claim for moral damages, attorney's
fees and costs had no valid basis since as to these items the Government had not given its
consent to be sued
4. that inasmuch as it was the province of Cebu that appropriated and used the area involved in
the construction of Mango Avenue, plaintiff had no cause of action against the defendants.
During the scheduled hearings nobody appeared for the defendants notwithstanding due notice, so the
trial court proceeded to receive the plaintiff's evidence ex parte. On July 29, 1959 said court rendered its
decision holding that it had no jurisdiction over the plaintiff's cause of action for the recovery of possession
and ownership of the portion of her lot in question on the ground that the government cannot be sued
without its consent; that it had neither original nor appellate jurisdiction to hear, try and decide plaintiff's
claim for compensatory damages in the sum of P50,000.00, the same being a money claim against the
Atty. Galleon USC College of Law and Governance LLB-1 Room EH308 SSDSG
government; and that the claim for moral damages had long prescribed, nor did it have jurisdiction over WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the court a quo
said claim because the government had not given its consent to be sued. Accordingly, the complaint was for the determination of compensation, including attorney's fees, to which the appellant is entitled as
dismissed. Unable to secure a reconsideration, the plaintiff appealed to the Court of Appeals, which above indicated. No pronouncement as to costs.
subsequently certified the case to Us, there being no question of fact involved.
Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo, Villamor and Makasiar, JJ.,
The issue here is whether or not the appellant may properly sue the government under the facts of the concur.
case.

In the case of Ministerio vs. Court of First Instance of Cebu, involving a claim for payment of the value of a
portion of land used for the widening of the Gorordo Avenue in Cebu City, this Court, through Mr. Justice
Enrique M. Fernando, held that where the government takes away property from a private landowner for
public use without going through the legal process of expropriation or negotiated sale, the aggrieved party
may properly maintain a suit against the government without thereby violating the doctrine of
governmental immunity from suit without its consent. We there said:

". . . If the constitutional mandate that the owner be compensated for

property taken for public use were to be respected, as it should, then a
suit of this character should not be summarily dismissed. The doctrine
of governmental immunity from suit cannot serve as an instrument for
perpetrating an injustice on a citizen. Had the government followed the
procedure indicated by the governing law at the time, a complaint would
have been filed by it, and only upon payment of the compensation fixed
by the judgment, or after tender to the party entitled to such payment
of the amount fixed, may it have the right to enter in and upon the land
so condemned, to appropriate the same to the public use defined in the
judgment.' If there were an observance of procedural regularity,
petitioners would not be in the sad plaint they are now. It is unthinkable
then that precisely because there was a failure to abide by what the law
requires, the government would stand to benefit. It is just as important,
if not more so, that there be fidelity to legal norms on the part of
officialdom if the rule of law were to be maintained. 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."

Considering that no annotation in favor of the government appears at the back of her certificate of title
and that she has not executed any deed of conveyance of any portion of her lot to the government, the
appellant remains the owner of the whole lot. As registered owner, she could bring an action to recover
possession of the portion of land in question at anytime because possession is one of the attributes of
ownership. However, since restoration of possession of said portion by the government is neither
convenient nor feasible at this time because it is now and has been used for road purposes, the only relief
available is for the government to make due compensation which it could and should have done years ago.
To determine the due compensation for the land, the basis should be the price or value thereof at the time
of the taking.

As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the price
of the land from the time it was taken up to the time that payment is made by the government. In addition,
the government should pay for attorney's fees, the amount of which should be fixed by the trial court after
hearing.