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MODULE 6

DOCTRINE OF STATE IMMUNITY

Art. XVI, Sec. 3 “The State may not be sued without its consent.”

This is a recognition of the sovereign character of the State.

Basis:

1. Indiscriminate suits against the State will result in the impairment of

its dignity, besides being a challenge to its supposed infallibility.
2. “There can be no legal right against the authority which makes the
law on which the right depends.” (Justice Holmes)
3. The demands and inconveniences of litigation will divert the time and
resources of the State from the more pressing matters demanding its
attention, to the prejudice of the public welfare.

Exception:
- foreign state is engaged regularly in a business or trade, or even if not so
engaged, on the basis of its contracts in the host state which may be considered
as purely commercial, private and proprietary acts, but not with respect to
contracts entered into by it as governmental or sovereign acts.

Application
- to file the claim not against the State itself but, so as to avoid the
appearance of its involvement, against the officer of the government who is
supposed to discharge the responsibility or grant the redress demanded.

G.R. The government of the Republic of the Philippines cannot be

sued without its consent, express or implied.

Express consent may be manifested either through a general law or

special law.

There is an implied consent:

1. When the State enters into a private contract, unless the contract is
only incidental to the performance of government function.
2. When the State enters into an operation that is essentially a business
operation, unless the business operation is only incidental to the
performance of governmental function.
3. When the State sues a private party, the defendant can file a counter-
claim against the State, unless the suit is entered into only to resist a
claim.

Procedure to prosecute the claim of government

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- must first be filed with the COA, which must act upon it within 60 days.
If the claim is rejected, the claimant is authorized to elevate the matter to the
Supreme Court on certiorari and in effect sue the State with its consent. (C.A.
No. 327, as amended by P.D. No. 1445)

Suability vs. Liability

Suability is the result of the express or implied consent of the State to be

sued. Liability on the other hand, is determined after hearing on the basis of the
relevant laws and the established facts. Thus, when the State allows itself to
be sued, all it does in effect is to give the other party an opportunity
to prove, if it can, that the State is liable.

Act of State Doctrine

Under this doctrine, the foreign court chooses to uphold and respect the
foreign State’s act done within its territory on the reasoning that if it will not do
so, it would “imperil the amicable relations between governments and vex the
peace of nations.”

Limitations to the Application of the Act of State Doctrine

1. There is an official act of a foreign sovereign performed within its own
territory, which is deemed valid.
2. The relief sought or the defense interposed in the action would require a
court in the other foreign state where the action is filed, based on such act
of state to declare invalid the foreign sovereign’s official act.
3. The doctrine covers only state action, not the action between individuals.

Doctrine of Stare Decisis

-uniformity in judicial decisions. Once an interpretation has been given
the provision of the Constitution, it should not be abandoned without grave
reasons, for the stability of many important institutions of society depends upon
permanence.

CASES:

1. UNIVERSITY OF THE PHILIPPINES VS. DIZON, G.R. NO. 171182,

AUGUST 23, 2012

2. MERRITT VS. GOVERNMENT OF THE PHILIPPINE ISLANDS,

G.R. NO. L-11154, MARCH 21, 1916

3. AIR TRANSPORTATION OFFICE VS. RAMOS, G.R. NO. 185685,

FEBRUARY 23, 2011-AN ACTION FOR COLLECTION WAS FILED
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BY RESPONDENTS AGAINST ATO FOR PAYMENT OF A PROPERTY

WHICH THE LATTER USED AS PORTION OF THE RUNWAY AND
SHOULDER OF THE LOAKAN AIRPORT.

4. NATIONAL IRRIGATION ADMINISTRATION VS. FONTANILLA,

ET AL., G.R. NO. 610-45, DECEMBER 1, 1989

5. CREDIT SUISSE VS. U.S. DISTRICT COURT FOR THE CENTRAL

DISTRICT OF CALIFORNIA, 130 7.3D 342, 1347-48, IN RELATION TO
PNB VS. U.S. DISTRICT COURT OF HAWAII 04-71843 (D.C. NO.
MDL-00840-MLR), FEBRUARY 4, 2005