USA vs.

GUINTO Facts: On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange and U.S. Air Force, solicited bids for contracts for barber services in Clark Air Base. The bidding was won by Ramon Dizon. The private respondents objected because he had made a bid for four facilities, including the Civil Engineering Area, which was not included in the invitation to bid. Upon the filing of the complaint, the respondent court issued an ex parte order directing the individual petitioners to maintain the status quo. Petitioners filed a motion to dismiss and opposition to the petition for preliminary injunction on the ground that the action was in effect a suit against the United States of America, which had not waived its nonsuability, and that the people in the complaint were also immune from suit under the RP-US Bases Treaty for acts done by them in the performance of their official functions. Despite several motions for reconsideration and motions to dismiss from herein petitioner, the same has been denied by the respondent judge; hence, this petition. Issue: Whether or not the petitioner can be sued in the Philippines without its consent Ruling: The traditional rule of 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 and private, commercial and proprietary acts. There is no question that the United States of America, like any other state, will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity. It was the finding of this court that the barbershops subject of the concessions granted by the United States government are commercial enterprises operated by private persons. Thus, petitioners cannot plead any immunity. The petition is dismissed.

REPUBLIC OF THE PHILIPPINES vs. NATIONAL LABOR RELATIONS COMMISSION Facts: In December of 1978, the full ownership of Pantranco North Express, Inc. was transferred to its creditor, the National Investment Development Corporation. Subsequently, PNEI was managed by Asset Privatization Trust. As a cost saving measure, the APT handling PNEI recommended to the Securities and Exchange Commission the retrenchment of some 500 employees of PNEI. This resulted to the filing of two labor complaints by the employees concerning unfair labor practice and other claims. The first case was raised to the Labor Arbiter, and the second case was raised to the National Labor Relations Commission. The Labor Arbiter ruled in favor of the employees and PNEI alone was ordered to pay the salaries and other monetary claims of the therein complainants. The NLRC however, included APT as liable; Hence this petition. Issue:

Whether or not Asset Privatization Trust is also liable for the obligations of PNEI even though it is an instrumentality of the government Ruling: Proclamation No. 50 creating the APT as an agency of the government provides that said instrumentality, among other things, can sue and be sued. Nonetheless, we have likewise since explained that suability does not necessarily mean liability on the part of the particular instrumentality or agency of the government. When the State gives its consent to be sued, it does not thereby necessarily consent to an unrestrained execution against it. 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. The petition is granted.

VETERANS MANPOWER AND PROTECTIVE SERVICES, INC. vs. COURT OF APPEALS FACTS:

On June 29, 1987, Odin Security Agency filed a complaint with PADPAO accusing VMPSI of cut-throat competition. As a result, PADPAO refused to issue a clearance/certificate membership to VMPSI when it requested one. VMPSI filed a civil case against the PC-Chief and PC-SUSIA. The court issued a restraining order enjoining the therein respondents from committing acts that would result in the cancellation or non-renewal of VMPSIs license. The therein respondents disagreed with the decision, asserting that the case is against the State which had not given consent. On November 3, 1988, the PC-Chief and PC-SUSIA sought relief by a petition for certiorari in the Court of Appeals. On August 11, 1989, the Court of Appeals granted the petition. ISSUE: Whether or not the case should prosper considering the principle of State immunity HELD: The State may not be sued without its consent. Invoking this rule, the PC Chief and PC-SUSIA, being instrumentalities of the national government exercising a primarily governmental function, may not be sued without the Governments consent. Worse, VMPSI seeks actual and compensatory damages in the sum of P1,000,000.00, exemplary damages in the same amount, and P200,000.00 as attorneys fees from said public respondents. Even if its action prospers, the payment of its monetary claims may not been forced because the State did not consent to appropriate the necessary funds for that purpose.

GARCIA vs. CHIEF OF STAFF FACTS: Sometime in July, 1948, Mariano Garcia suffered injuries while undergoing the 10-month military training in Pampanga. Thereafter he filed his claim under Commonwealth Act 400 and in April, 1957, he submitted some papers in support of his claim to the Adjutant General's Office. But the same office denied his claims averring that Commonwealth Act 400 had already been repealed by Republic Act 610. Garcia alleged that by reason of the injuries suffered by plaintiff he was deprived of his sight or vision rendering him permanently disabled and therefore should be awarded damages. The Chief of Staff of the AFP filed a motion to dismiss the complaint on the ground that the court has no jurisdiction over the subject matter of the complaint. Garcia interposed an appeal, but the same has been denied. ISSUE: Whether or not the claims of Garcia should prosper RULING: The Court upholds the denial of the appeal because the Court of First Instance has no jurisdiction over the subject matter, it being a money claim against the government. A claim for the recovery of money against the government should be filed with the Auditor General as provided for by Commonwealth Act 327, in line with the principle that the State cannot be

sued without its consent. The well established rule that no recourse to court can be had until all administrative remedies had been exhausted and that actions against administrative officers should not be entertained if superior administrative officers could grant relief is squarely applicable to the present case. The petition is therefore denied.

CALLADO vs. INTERNATIONAL RICE RESEARCH INSTITUTE FACTS: Ernesto Callado was employed as a driver at the IRRI. On February 11, 1990, while driving an IRRI vehicle on an official trip, Callado met an accident. A preliminary investigation was conducted and he was informed that the accident was caused by his negligent act of not checking the vehicle, coupled by the fact that he was drunk while driving. Consequently,

he was terminated from service. Callado filed a case for illegal dismissal, while the IRRI asserted its diplomatic immunity from suit granted by Presidential Decree No. 1620. The Labor Arbiter ruled that in all cases of termination, respondent IRRI waives its immunity, and ordered the reinstatement of Callado to his former position. The Court of Appeals however, reversed such ruling, giving adherence to the principle of State Immunity. ISSUE: Whether or not the International Rice Research Institute has waived its immunity because of an employer-employee dispute RULING: The IRRI's immunity from suit is undisputed. Article 3 of Presidential Decree No. 1620 provides that the Institute shall enjoy immunity from any penal, civil and administrative proceedings, except when the immunity has been expressly waived by the Director-General of the Institute or his authorized representatives. The IRRI enjoys immunities accorded to international organizations, which determination has been held to be a political question conclusive upon the Courts. The grant of immunity to IRRI is clear and unequivocal and an express waiver by its Director-General is the only way by which it may relinquish or abandon this immunity. It was established that the IRRI did not have any intention to waive its immunity, therefore, the petition is dismissed.

MERRITT vs. GOVERNMENT OF THE PHILIPPINES FACTS: Merritt was riding a motorcycle at a speed of ten to twelve miles an hour, when he was struck by a General Hospital ambulance turning suddenly and unexpectedly without having sounded any whistle or horn. Because of the collision, Merritt suffered grave physical injuries, and was forced to give up his work as a contractor due to the inabilities he incurred. The negligence which caused the collision is a tort committed by an agent or employee of the Government. Damages were awarded to Merritt, consisting of P5,000 for permanent injuries, and P2,666 for the loss of wages during the time the plaintiff was incapacitated from pursuing his occupation. ISSUE: Whether or not the Government is legally liable for the damages resulting in the collision RULING: The plaintiff was authorized to bring an action against the Government via Act No. 2457 by authority of the United States in order that said questions may be decided. The Court has already decided that the accident was due solely to the negligence of the driver, who was at the time an employee of the defendant. No claim arises against any government if it is in favor of an individual, by reason of the misfeasance, laches, or unauthorized exercise of powers by its officers or agents. The State is only liable for the acts of its agents, officers and employees when they act as special agents and the chauffeur of the ambulance of the General Hospital was not such an agent. The judgment appealed from must be reversed. This matter rests solely with the Legislature and not with the courts.

7. HOLY SEE vs. ROSARIO, JR FACTS: The three lots registered to the Philippine Realty Corporation were sold to Ramon Licup, through Msgr. Domingo A. Cirilos Jr. on behalf of the petitioner. Lot 5-A, one of the three lots was subsequently sold by petitioner to Tropicana Properties and Development Corporation without the knowledge of Licup. On January 23, 1990, private respondent filed a complaint with the Regional Trial Court for annulment of the sale of the three parcels of land, and specific performance and damages against petitioner. Cirilos invoked sovereign immunity being an official representative of the Papal Nuncio. On the other hand, private respondent insists that the doctrine of nonsuability is not anymore absolute because petitioner has entered into a commercial transaction for the sale of a parcel of land located in the Philippines.

ISSUE: Whether or not the Holy See can invoke its sovereign immunity from suit in the Philippines RULING: As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally accepted principles of International Law. According to a newer or restrictive theory of nations, the immunity of the sovereign is recognized only with regard to public acts or acts governmental functions of a state, but not with regard to proprietary ones. In the case at bench, petitioners claimed such transaction for the property was to construct thereon the official place of residence of the Papal Nuncio. The right of a foreign sovereign to acquire property, real or personal, in a receiving state, necessary for the creation and maintenance of its diplomatic mission, is recognized in the 1961 Vienna Convention on Diplomatic Relations. The petition is therefore granted.

8. PHILIPPINE NATIONAL RAILWAYS vs. INTERMEDIATE APPELLATE COURT FACTS: A collision between a passenger express train of defendant Philippine National Railways and a passenger bus of Baliwag Transit transpired; causing damages to latters bus and its passengers. Allegedly, the proximate cause of the collision was the negligence and imprudence of defendant PNR and its locomotive engineer, Honorio Cirbado, operating its passenger train in a busy intersection without any bars, semaphores, signal lights, flagman or switchman to warn the public of approaching train that would pass through the crossing. PNR, however, averred that the collision was due to the negligence and imprudence of the bus driver, Romeo Hughes. The Intermediate Appellate Court stated then that is no admissible evidence to show that indeed, the bus driver did not take the necessary

precaution in traversing the track, and therefore ruling against PNR. PNR, representing the State, then asserted its sovereign immunity from suit. ISSUE: Whether or not the State in a sovereign capacity when it organized the PNR for the purpose of engaging in transportation RULING: Not all government entities, whether corporate or non-corporate, are immune from suits. Immunity from suit is determined by the character of the objects for which the entity was organized. Suits against State agencies with respect to matters in which they have assumed to act in a private or non-governmental capacity are not suits against the State. The point is that when the government enters into a commercial business it abandons its sovereign capacity and is to be treated like any other private corporation. Like any private common carrier, the PNR is subject to the obligations of persons engaged in that private enterprise. It would be unjust if the heirs of the victim of an alleged negligence of the PNR employees could not sue the PNR for damages. The PNR may thus be sued.

9. LOPEZ, Jr. vs. COURT OF APPEALS FACTS: On April 1977, Manapat was employed by the City of Manila as Secretary of the City of Manila Board of Tax Assessment Appeals, with a monthly salary of P3,993.33. He occupied that position until he reached the compulsory retirement age of 65 years. The City of Manila extended his period of service for six months. Upon the end of this period, Manapat filed his retirement with the GSIS under R.A. No. 1616 and was therefore entitled to retirement gratuity of P179,274.04. The Committee Chairman did not grant this claim on the ground that it was existing policy of the City of Manila that an employee who has reached the compulsory retirement age of sixty-five years must retire under R.A. No. 660 and not under R.A. No. 1616. The same was reiterated by Gemiliano Lopez, Jr., the then city mayor of Manila. The trial court dismissed the complaint of Manapat. The CA however, reversed the decision of the trial court ordering petitioner to pay the retirement claim of Mr. Manapat.

ISSUE: Whether or not the City of Manila as employer may be compelled to pay the retirement benefits of its employees under R.A. No. 1616, notwithstanding lack of available funds for that purpose RULING: Section 12(c) of C.A. No. 186 effectively dispenses with the need for enacting an ordinance specifically appropriating private respondent Manapat's retirement pay, or inserting an appropriate item to that effect in a General Appropriation Ordinance of the City of Manila. It states that gratuity is payable by the employer or officer concerned which is hereby authorized to provide the necessary appropriation or pay the same from any unexpended items of appropriations or savings of its appropriations. In other words, Section 12(c) itself furnishes statutory authority to petitioners to pay Manapat's claim out of any savings the City of Manila may have from its other appropriations. The petition is therefore denied.

10. RAYO vs. CFI OF BULACAN FACTS: At about midnight on October 26, 1978, during the height of that infamous typhoon "KADING", the National Power Corporation, opened or caused to be opened simultaneously all the three floodgates of the Angat Dam. As a result, several towns in Bulacan were flooded. Petitioners, who were among the many unfortunate victims of that man-caused flood, filed with the respondent Court eleven complaints for damages. NPC on the other hand averred that in the operation of the Angat Dam, it is performing a purely governmental function, hence it cannot be sued without the express consent of the State. The CFI of Bulacan then dismissed all their complaints. Plaintiffs counter argued that being an agency performing a purely

governmental function in the operation of the Angat Dam did not give defendants any right to commit wrongs upon individuals. ISSUE: Whether OR NOT the power of respondent National Power Corporation to sue and be sued under its organic charter includes the power to be sued for tort RULING: As a government owned and controlled corporation, it has a personality of its own, distinct and separate from that of the Government. Moreover, the charter provision that the NPC can "sue and be sued in any court" is without qualification on the cause of action and accordingly it can include a tort claim such as the one instituted by the petitioners. The petition is therefore granted.

11 PNB v Pabalan Issue; Whether or not PNB can be sued Facts; Philippine National Bank invoked the doctrine of non-suability in behalf of

PVTA. It is to be admitted that under the present Constitution, what was formerly implicit as a fundamental doctrine in constitutional law has been set forth in express terms: "The State may not be sued without its consent." In addition, the amount held by said Bank is subject to garnishment. Held; The certiorari was dismissed without cost by the SC saying that the funds held by PNB is subject for garnishment, thus, the writ of execution be imposed immediately. The non-suability clause raised by PVTA being a government owned corporation was also denied citing previous decisions held by the SC specifically citing that of Manila Hotel Employees Association vs Manila Hotel Company and to quote '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.'

12. Bureau of Printing vs. Bureau of Printing Employees Association FACTS: Respondent Bureau of Printing Employees Association filed a complaint alleging that Serafin Salvador and Mariano Ledesma have been engaging in unfair labor practice. The petitioners denied the charges and alleged that the Bureau of Printing has no juridical personality to sue and be sued and that said Bureau of Printing is not an industrial concern. They prayed that the case be dismissed for lack of jurisdiction. Thereafter, petitioners filed an "Omnibus Motion" asking for a preliminary hearing on the question of jurisdiction. The motion was granted, but after hearing, the Industrial Court sustained the jurisdiction of the court and consequently, denied the prayer for dismissal. Reconsideration of this order having been also denied by the court en banc, the petitioners brought the petition to this court. ISSUE: Whether or not the Bureau of Printing can be sued HELD: No. The Bureau of Printing is an unincorporated agency of the Government. Designed to meet the printing needs of the Government, it is primarily a service bureau and is obviously, not engaged in business or occupation for pecuniary profit. Indeed, as an office of the Government, without any corporate or juridical personality, the Bureau of Printing cannot be sued. The petition is thus granted.

13 Professional Video, Inc., vs. TESDA Facts: On December 29, 1999, T E S D A a n d P R O V I signed and executed their Contract Agreement Project: PVC ID Card Issuance for the provision of goods and services in the printing and encoding of PVC cards. On August 24, 2000, TESDA and PROVI executed an Addendum to the Contract Agreement Project: PVC ID Card Issuance. PROVI delivered the required items; however, TESDA allegedly failed t o s t i c k t o t h e e n d o f t h e i r b a r g a i n . On July 11, 2001, PROVI filed with the RTC a complaint for sum of money with damages against TESDA and prayed for the issuance of a writ o f p r e l i m i n a r y g a r n i s h m e n t . T h e R T C granted PROVIs prayer and issued a writ of preliminary attachment against the properties of TESDA not exempt from execution in the amount of P35,000,000.00. Faced with this ruling, TESDA responded with a Motion to Discharge which was denied. This led TESDA to file a Petition for Certiorari with the CA, wherein the said court set aside the orders of the RTC. The CA subsequently denied PROVIs motion for reconsideration; hence, this petition. Issue: Whether or not PROVI is entitled to its moneyed claims against TESDA. Held: No. TESDA is an unincorporated instrumentality of the Government. The rule that a state may not be sued without its consent is embodied in Section 3, Article XVI of the 1987 Consitution. TESDA is not engaged in business, and there is nothing in the records to show that its purchase of the PVCc a r d s f r o m P R O V I i s fo r a b u s i n e s s p u r p o s e .

14 PALAFOX vs PROVINCE OF ILOCOS NORTE FACTS: Sabas Torralba was employed as driver of Provincial Govt of Ilocos Norte detailed to the Office of District Enginner. While driving his truck in compliance with his duties, he ran over Proceto Palafox killing him. Palafox was convicted of homicide through reckless imprudence. Heirs bagan proceedings for damages against provincial govt. ISSUE: WON Provl Govt is liable HELD: NO RATIO: To attach liability to the state, a declaration must be made that Torralba was a special agent within the scope of Art 1903 par 5. But this principle applies only to the Insular Govtas distinguished from provl or municipal govts. The heirs of Palafoxinvoked the doctrine of respondeat superior, that the master shall answer, as illustrated in Mendoza case concerning liability of municipal corporations for negligent acts of its employees. Mendoza held that if the negligent employee was engaged in the performance of governmental duties as distinguished from proprietary or business functions, the government is not liable. The construction or maintenance of roads in which the driver worked at the time of the accident is admittedly governmental activities. Hence, Govt is not liable

15 Torio vs Fontanilla Facts: Municipality of Malasiqui passed resolution number 159 to manage the 1959 town fiesta. Jose Macaraeg, heading the committee, constructed stages for the event. The "zarzuela" entitled "Midas Extravaganza" was donated by an association of Malasiqui employees of the Manila Railroad Company in Caloocan, Rizal. The troupe for the performance and one of the members of the group was Vicente Fontanilla. The "zarzuela" then began but before the dramatic part of the play was reached, the stage collapsed and Vicente Fontanilla was pinned underneath. Fontanilia was taken to tile San Carlos General Hospital where he died in the afternoon of the following day. Heirs of the deceased filed a complaint against the municipality of malasiqui, municipal council and all the members thereof. Answering the complaint defendant municipality invoked inter alia the principal defense that as a legally and duly organized public corporation it performs sovereign functions and the holding of a town fiesta was an exercise of its governmental functions from which no liability can arise to answer for the negligence of any of its agents. Trial court ruled that the defendants are not liable for damages as the undertaking was not for profit. Appellate court reversed the trial court's decision and ordered all the defendantsappellees to pay jointly and severally the heirs of Vicente Fontanill. Issue:Whether or not the municipality and its councilors are liable for damages for the death of Fontanilla. Ruling: The municipality is liable for the death of Fontanilla, however the councilors acted as mere agents of the municipality thus are not liable. The town fiesta was an exercise of a private or proprietary function of the municipality. It follows that under the doctrine of respondent superior, petitioner-municipality is to be held liable for damages for the death of Vicente Fontanilia if that was attributable to the negligence of the municipality's officers, employees, or agents.