COLLECTOR VS CAMPOS RUEDA

G.R. No. 1051

In January 1955, Maria Cerdeira died in Tangier, Morocco

(an international zone [foreign country] in North Africa). At

FACTS OF THE CASE

thetime of her death, she was a Spanish citizen and was a

The defendants were charged of scurrilous libel against the

resident of Tangier. She however left some personal

Government of the United States and the Insular

properties (shares of stocks and other intangibles) in the

Government of the Philippine Islands because of an editorial

Philippines. The designated administrator of her estate here

it published in the issue of Manila Freedom. The

is Antonio Campos Rueda.

defendants were convicted for said offense basing upon

In the same year, the Collector of Internal Revenue (CIR)

Section 8 of Act. No. 292 of the Commission. Defendants

assessed the estate for deficiency tax amounting to about

then appealed for reversal of judgment made by the lower

P161k. Campos Rueda refused to pay the assessed tax as

courts.

he claimed that the estate is exempt from the payment of

ISSUE (ADMINISTRATION)

said taxes pursuant to section 122 of the Tax Code which

Is the editorial published by the defendants directed towards

provides:

the Government of the United States and the Insular

That no tax shall be collected under this Title in respect of

Government of the Philippine Islands?

intangible personal property (a) if the decedent at thetime

RULING/HELD

of his death was a resident of a foreign country which at

No, the editorial was not directed towards the government

the time of his death did not impose a transfer tax or death

itself but towards the aggregate of individuals who were

tax of any character in respect of intangible person property

administering the government at that time.

of the Philippines not residing in that foreign country, or (b) if

We understand, in modern political science, . . . by the

the laws of the foreign country of which the decedent was a

term government, that institution or aggregate of institutions

resident at the time of his death allow a similar exemption

by which an independent society makes and carries out

from transfer taxes or death taxes of every character in

those rules of action which are unnecessary to enable men

respect of intangible personal property owned by citizens of

to live in a social state, or which are imposed upon the

the Philippines not residing in that foreign country.

people forming that society by those who possess the power

Campos Rueda was able to prove that there is reciprocity

or authority of prescribing them. Government is the

between Tangier and the Philippines.

aggregate of authorities which rule a society. By

However, the CIR still denied any tax exemption in favor of

"administration, again, we understand in modern times, and

the estate as it averred that Tangier is not a state as

especially in more or less free countries, the aggregate of

contemplated by Section 22 of the Tax Code and that the

those persons in whose hands the reins of government are

Philippines does not recognize Tangier as a foreign country.

for the time being (the chief ministers or heads of

ISSUE: Whether or not Tangier is a state.

departments)." (Bouvier, Law Dictionary, 891.) But the writer

HELD: Yes. For purposes of the Tax Code, Tangier is a

adds that the terms "government" and "administration" are

foreign country.

not always used in their strictness, and that "government" is

A foreign country to be identified as a state must be

often used for "administration."

a politically organized sovereign community independent of

In this case, the editorial published by defendants where

outside control bound by penalties of nationhood, legally

directed towards the personnel of the Commission whom

supreme within its territory, acting through a government

they described as "notoriously corrupt and rascally, and men

functioning under a regime of law. The stress is on its being

of no personal character". This as being ruled out by the

a nation, its people occupying a definite territory, politically

Supreme Court was an attack not to the government system

organized, exercising by means of its government its

but to the aggregate of individuals by whom the government

sovereign will over the individuals within it and maintaining

is being administered.

its separate international personality.

NOTES

Further, the Supreme Court noted that there is already an

The final judgment of the convictions of the defendants was

existing jurisprudence (Collector vs De Lara) which provides

reversed by the Supreme Court acquitting the defendants

that even a tiny principality, that of Liechtenstein, hardly an

with costs against the officials.

international personality in the sense, did fall under the

Romualdez-Yap v. CSC

exempt category provided for in Section 22 of the Tax Code.

Facts:

Thus, recognition is not necessary. Hence, since it was

proven that Tangier provides such exemption to personal

Petitioner Conchita Romualdez-Yap started

properties of Filipinos found therein so must the Philippines

working with the Philippine National Bank on 20 September

honor the exemption as provided for by our tax law with

1972 as special assistant with the rank of Second Assistant

respect to the doctrine of reciprocity.

Manager assigned to the office of the PNB President. After

THE UNITED STATES, complainant-appellee

several promotions, she was appointed in 1983 Senior Vice

Vs

President assigned to the Fund Transfer Department.

FRED L DORR, ET AL., defendants-appellants

May 19, 1903

Starting 1 April 1986 up to 20 February 1987, petitioner filed

There are functions which our government is required to

several applications for leave of absence (due to medical

exercise to promote its objectives as expressed in our

reasons) which were duly approved. While she was on

Constitution and which are exercised by it as an attribute of

leave, Executive Order No. 80 (Revised Charter of the PNB)

sovereignty, and those which it may exercise to promote

was approved on 3 December 1986. Said executive order

merely the welfare, progress and prosperity of the people.

authorized the restructure/reorganization and rehabilitation

To this latter class belongs the organization of those

of PNB. Pursuant to the reorganization plan, the Fund

corporations owned or controlled by the government to

Transfer Department was abolished and its functions

promote certain aspects of the economic life of our people

transferred to the International Department.

such as the National Coconut Corporation. These are what

we call government-owned or controlled corporations which

Consequently, petitioner was notified of her separation from

may take on the form of a private enterprise or one

the service in a letter dated 30 January 1987. This letter was

organized with powers and formal characteristics of a private

received by petitioners secretary at the PNB head office on

corporation under the Corporation Law.

16 February 1987.
But a reorganization whether in a government bureau
Petitioners first recorded appeal to the Civil Service

performing constituent functions or in a government-owned

Commission questioning her separation is a letter dated 4

or controlled corporation performing ministrant functions

August 1989. Then CSC Chairman Samilo N. Barlongay

must meet a common test, the test of good faith.

upheld the validity of her separation from the service in a

letter/opinion dated 30 August 1989 (this was allegedly

Due to the restructuring and this is empirically verifiable

received by petitioner only on 26 February 1990)

PNB became once more a viable banking institution. The

Issue:

restoration of the FTD four years after it was abolished and

whether bad faith existed in the reorganization of

its functions transferred to the International Department, can

the Philippine National Bank resulting in the separation from

be attributed to the banks growth after reorganizations,

the service of petitioner

thereby negating malice or bad faith in that reorganization.

Held:

The essence of good faith lies in an honest belief in the

No. PNBs reorganization was by virtue of a valid

validity of ones right.It consists of an honest intention to

law, E.O. No. 80. At the time of reorganization, due to the

abstain from taking an unconscionable and unscrupulous

critical financial situation of the bank, departments, positions

advantage of another, its absence should be established by

and functions were abolished or merged. The abolition of the

convincing evidence.

Fund Transfer Department (FTD) was deemed necessary.

This, to the Courts mind, was a management prerogative

The records also clearly indicate that starting April 1986 to

exercised pursuant to a business judgment. At this point, a

February 1987, petitioner went on leave of absence for

distinction can be made in ruling on the validity of a

medical reasons. While she was not reporting to the office,

reorganization between a government bureau or office

the banks reorganization got underway. She continued,

performing constituent functions (like the Customs) and a

however, receiving her salaries, allowances, emoluments,

government-owned or controlled corporation performing

honoraria and fees up to March 1987. Employees who were

ministrant functions (like the PNB).

affected by the reorganization had the option to avail of the

banks Separation Benefits Plan/Early Retirement Plan

Constituent functions are those which constitute the very

(SBP/ERIP). Petitioner opted not to avail of such plan and

bonds of society and are compulsory in nature; ministrant

instead submitted to the result of the banks ongoing

functions are those undertaken by way of advancing the

reorganization and managements discretion. If petitioner

general interests of society, and are merely optional.

had the desire for continued employment with the bank, she

Commercial or universal banking is, ideally, not a

could have asserted it for managements consideration.

governmental but a private sector, endeavor. It is an optional

There is no proof on record that she affirmatively expressed

function of government.

willingness to be employed. Since she cannot rebut the CSC

finding that her earliest appeal was made on 4 August 1989,

The principles determining whether or not a government

there is no reason for the Supreme Court to hold that she did

shall exercise certain of these optional functions are: (1) that

not sleep on her rights. On the contrary, her present

a government should do for the public welfare those

argument that bad faith existed at the time of the abolition of

things which private capital would not naturally

the FTD because it was restored four years later is a little too

undertake and (2) that a government should do those

late. Who could have predicted in 1986 or 1987 that PNB

things which by its very, nature it is better equipped to

would be able to rise from its financial crisis and become a

administer for the public welfare than is any private

viable commercial bank again? The decision to abolish the

individual or group of individuals.

FTD at the time it was abolished, to repeat, was a business

judgment made in good faith.
SPOUSES FONTANILLA VS HON. MALIAMAN,

Deeds, San Fernando, La Union despite receipt of the writ of

FACTS: National Irrigation Administration (NIA), a

execution. On April 21, 1999, the Office of the Solicitor

government agency, was held liable for damages resulting to

General filed a complaint for revival of judgment and

the death of the son of herein petitioner spouses caused by

cancellation of titles before the Regional Trial Court of the

the fault and/or negligence of the driver of the said agency.

First Judicial Region (Branch 26, San Fernando, La Union)

NIA maintains that it is not liable for the act of its driver
because the former does not perform primarily proprietorship

Issue:

functions but governmental functions.

whether or not the Republic of the Philippines can

ISSUE: Whether or not NIA may be held liable for damages

maintain the action for revival of judgment herein

caused by its driver.

Held:

HELD: Yes. NIA is a government agency with a corporate

No. While it is true that prescription does not run

personality separate and distinct from the government,

against the State, the same may not be invoked by the

because its community services are only incidental functions

government in this case since it is no longer interested in the

to the principal aim which is irrigation of lands, thus, making

subject matter. While Camp Wallace may have belonged to

it an agency with proprietary functions governed by

the government at the time Rafael Galvezs title was ordered

Corporation Law and is liable for actions of their employees.

cancelled, the same no longer holds true today.

Shipside v. CA
With the transfer of Camp Wallace to the BCDA,

G.R. No. 143377 February 20, 2001

the government no longer has a right or interest to protect.

Melo, J.

Consequently, the Republic is not a real party in interest and

it may not institute the instant action. Nor may it raise the

Facts:

defense of imprescriptibility, the same being applicable only

On October 29, 1958, Original Certificate of Title

in cases where the government is a party in interest. Under

No. 0-381 was issued in favor of Rafael Galvez, over four

Section 2 of Rule 3 of the 1997 Rules of Civil Procedure,

parcels of land - Lot 1 with 6,571 square meters; Lot 2, with

every action must be prosecuted or defended in the name

16,777 square meters; Lot 3 with 1,583 square meters; and

of the real party in interest. To qualify a person to be a real

Lot 4, with 508 square meters. On April 11, 1960, Lots No. 1

party in interest in whose name an action must be

and 4 were conveyed by Rafael Galvez in favor of Filipina

prosecuted, he must appear to be the present real owner of

Mamaril, Cleopatra Llana, Regina Bustos, and Erlinda

the right sought to enforced. A real party in interest is the

Balatbat in a deed of sale which was inscribed as Entry No.

party who stands to be benefited or injured by the judgment

9115 OCT No.0-381 on August 10, 1960. August 16, 1960,

in the suit, or the party entitled to the avails of the suit. And

Mamaril, et al. sold Lots No. 1 and 4 to Lepanto

by real interest is meant a present substantial interest, as

Consolidated Mining Company.

distinguished from a mere expectancy, or a future,

contingent, subordinate or consequential interest. Being the

On February 1, 1963, unknown to Lepanto Consolidated

owner of the areas covered by Camp Wallace, it is the

Mining Company, the Court of First Instance of La Union,

Bases Conversion and Development Authority, not the

Second Judicial District, issued an order declaring OCT No.

Government, which stands to be benefited if the land issued

0-381 of the Registry of Deeds for the Province of La Union

in the name of petitioner is cancelled.

issued in the name of Rafael Galvez, null and void, and

Philippine Virginia Tobacco Administration, petitioner,

ordered the cancellation thereof.

vs. Court of Industrial Relations, et al., respondents.

G.R. No. L-32052 July 25, 1975

On October 28, 1963, Lepanto Consolidated Mining

Company sold to herein petitioner Lots No. 1 and 4. In the
meantime, Rafael Galvez filed his motion for reconsideration

Facts:
Private respondents alleged their employment

against the order issued by the trial court declaring OCT No.

relationship, the overtime services in excess of the regular

0-381 null and void. The motion was denied. The Court of

eight hours a day rendered by them, and the failure to pay

Appeals ruled in favor of the Republic of the Philippines.

them overtime compensation in accordance with

Commonwealth Act No. 444. Philippine Virginia Tobacco

Thereafter, the Court of Appeals issued an Entry of

Administration denied the allegations and raising the special

Judgment, certifying that its decision dated August 14, 1973

defenses of lack of a cause of action and lack of jurisdiction.

became final and executory on October 23, 1973. Twenty

The respondent Court issued an order sustaining the claims

four long years, thereafter, on January 14, 1999, the Office

of private respondents for overtime services and directing

of the Solicitor General received a letter dated January 11,

petitioner to pay the same, minus what it had already paid.

1999 from Mr. Victor G. Floresca, Vice-President, John Hay

There was a motion for reconsideration but it was denied by

Poro Point Development Corporation, stating that the

the respondent Court. Petitioner Philippine Virginia Tobacco

aforementioned orders and decision of the trial court in

Administration contends that it is beyond the jurisdiction of

L.R.C. No. N-361 have not been executed by the Register of

respondent Court as it is exercising governmental functions

and that it is exempt from the operation of Commonwealth

Assoc of Phil Coconut Desicator vs Phil Coconut

Act No. 444.

Authority
Facts:

Issue:

Whether or not petitioner discharges governmental

The Philippine Coconut Authority (PCA) was created by

and not proprietary functions.

Presidential Decree No. 232 as an independent public

Held:

corporation to promote the rapid integrated development

Yes, the Petitioner discharges governmental and

not proprietary functions.

The Supreme Court ruled that a reference to the

and growth of the coconut and other palm oil industry in all
its aspects and to ensure that coconut farmers become
direct participants in, and beneficiaries of, such development

enactments creating Petitioner Corporation suffices to

andgrowth through a regulatory scheme set up by law.

demonstrate the merit of petitioners plea that it performs

PCA is also in charge of the issuing of licenses to would-be

governmental and not proprietary functions. Under Republic

coconut plant operators. In March 1993, however, PCA

Act No. 2265, its purposes and objectives are: "(a) To

issued Board Resolution No. 018-93 which no longer require

promote the effective merchandising of Virginia tobacco in

those wishing to engage in coconut processing to apply for

the domestic and foreign markets so that those engaged in

licenses as a condition for engaging in such business. The

the industry will be placed on a basis of economic security;

purpose of which is to promote free enterprise unhampered

(b) To establish and maintain balanced production and

by protective regulations and unnecessary bureaucratic red

consumption of Virginia tobacco and its manufactured

tapes. But this caused cut-throat competition among

products, and such marketing conditions as will insure and

operators specifically in congested areas, underselling,

stabilize the price of a level sufficient to cover the cost of

smuggling, and the decline of coconut-based commodities.

production plus reasonable profit both in the local as well as

The Association of Philippine Coconut Desiccators (APCD)

in the foreign market; (c) To create, establish, maintain, and

then filed a petition for mandamus to compel PCA to revoke

operate processing, warehousing and marketing facilities in

B.R. No. 018-93.

suitable centers and supervise the selling and buying of

ISSUE: Whether or not the petition should be granted.

Virginia tobacco so that the farmers will enjoy reasonable

HELD: Yes. Our Constitutions, beginning with the 1935

prices that secure a fair return of their investments; (d) To

document, have repudiated laissez-faire as an economic

prescribe rules and regulations governing the grading,

principle. Although the present Constitution enshrines free

classifying, and inspecting of Virginia tobacco; and (e) To

enterprise as a policy, it nonetheless reserves to the

improve the living and economic conditions of the people

government the power to intervene whenever necessary to

engaged in the tobacco industry."

promote the general welfare. As such, free enterprise does

not call for the removal of protective regulations for the

The amendatory statute, Republic Act No. 4155, renders

benefit of the general public. This is so because under Art.

even more evident its nature as a governmental agency. Its

12, Secs. 6 and 9, it is very clear that the government

first section on the declaration of policy reads: "It is declared

reserves the power to intervene whenever necessary to

to be the national policy, with respect to the local Virginia

promote the general welfare and when the public interest so

tobacco industry, to encourage the production of local

requires.

Virginia tobacco of the qualities needed and in quantities

GOVT VS MONTE DE PIEDAD

marketable in both domestic and foreign markets, to

In June 1863 a devastating earthquake occurred in the

establish this industry on an efficient and economic basis,

Philippines. The Spanish Government then provided

and, to create a climate conducive to local cigarette

$400,000.00 as aid for the victims and it was received by

manufacture of the qualities desired by the consuming

the Philippine Treasury. Out of the said amount,

public, blending imported and native Virginia leaf tobacco to

$80,000.00 was left untouched; it was then invested in

improve the quality of locally manufactured cigarettes."

the Monte de Piedad Bank which in turn invested the

amount in jewelries. But when the Philippine

It is thus readily apparent from a cursory perusal

government later tried to withdraw the said amount, the

of such statutory provisions why petitioner can rightfully

bank cannot provide for the amount. The government

invoke the doctrine announced in the leading Agricultural

then filed a complaint. The bank argued that the

Credit and Cooperative Financing Administration

Philippine government is not an affected party hence

decision and why the objection of private respondents with

has no right to institute a complaint. The bank argues

its overtones of the distinction between constituent and

that the government was not the intended beneficiary of

ministrant functions of governments. Under this traditional

the said amount.

classification, such constituent functions are exercised by

ISSUE: Whether or not the Philippine government is

the State as attributes of sovereignty, and not merely to

competent to file a complaint against the respondent

promote the welfare, progress and prosperity of the people -

bank.

these latter functions being ministrant, the exercise of which

HELD: Yes. The Philippine government is competent to

is optional on the part of the government.

institute action against Monte de Piedad, this is in

accordance with the doctrine of Parens Patriae. The

government being the protector of the rights of the

to refer to judicial processes, which would be in violation of

people has the inherent supreme power to enforce such

international law.

laws that will promote the public interest. No other party

A well-known rule of statutory construction is: A statute

has been entrusted with such right hence as parents

ought never to be construed to violate the law of nations if

of the people the government has the right to take back

any other possible construction remains.

the money intended for the people.

Another is that where great inconvenience will result from a

Co Kim Chan v Valdez Tan Keh

particular construction, or great mischief done, such

Facts of the case: Co Kim Chan had a pending civil case,

construction is to be avoided, or the court ought to presume

initiated during the Japanese occupation, with the Court of

that such construction was not intended by the makers of the

First Instance of Manila. After the Liberation of the Manila

law, unless required by clear and unequivocal words.

and the American occupation, Judge Arsenio Dizon refused

Annulling judgments of courts made during the Japanese

to continue hearings on the case, saying that a proclamation

occupation would clog the dockets and violate international

issued by General Douglas MacArthur had invalidated and

law, therefore what MacArthur said should not be construed

nullified all judicial proceedings and judgments of the courts

to mean that judicial proceedings are included in the phrase

of the Philippines and, without an enabling law, lower courts

processes of any other governments.

have no jurisdiction to take cognizance of and continue

In the case of US vs Reiter, the court said that if such laws

judicial proceedings pending in the courts of the defunct

and institutions are continued in use by the occupant, they

Republic of the Philippines (the Philippine government under

become his and derive their force from him. The laws and

the Japanese).

courts of the Philippines did not become, by being continued

The court resolved three issues:

as required by the law of nations, laws and courts of Japan.

1. Whether or not judicial proceedings and decisions made

It is a legal maxim that, excepting of a political nature, law

during the Japanese occupation were valid and remained

once established continues until changed by some

valid even after the American occupation;

competent legislative power. IT IS NOT CHANGED

2. Whether or not the October 23, 1944 proclamation

MERELY BY CHANGE OF SOVEREIGNTY. Until, of

MacArthur issued in which he declared that all laws,

course, the new sovereign by legislative act creates a

regulations and processes of any other government in the

change.

Philippines than that of the said Commonwealth are null and

Therefore, even assuming that Japan legally acquired

void and without legal effect in areas of the Philippines free

sovereignty over the Philippines, and the laws and courts of

of enemy occupation and control invalidated all judgments

the Philippines had become courts of Japan, as the said

and judicial acts and proceedings of the courts;

courts and laws creating and conferring jurisdiction upon

3. And whether or not if they were not invalidated by

them have continued in force until now, it follows that the

MacArthurs proclamation, those courts could continue

same courts may continue exercising the same jurisdiction

hearing the cases pending before them.

over cases pending therein before the restoration of the

Ratio: Political and international law recognizes that all acts

Commonwealth Government, until abolished or the laws

and proceedings of a de facto government are good and

creating and conferring jurisdiction upon them are repealed

valid. The Philippine Executive Commission and the

by the said government.

Republic of the Philippines under the Japanese occupation

DECISION: Writ of mandamus issued to the judge of the

may be considered de facto governments, supported by the

Court of First Instance of Manila, ordering him to take

military force and deriving their authority from the laws of

cognizance of and continue to final judgment the

war.

proceedings in civil case no. 3012.

Municipal laws and private laws, however, usually remain in

Summary of ratio:

force unless suspended or changed by the conqueror. Civil

1. International law says the acts of a de facto government

obedience is expected even during war, for the existence of

are valid and civil laws continue even during occupation

a state of insurrection and war did not loosen the bonds of

unless repealed.

society, or do away with civil government or the regular

2. MacArthur annulled proceedings of other governments,

administration of the laws. And if they were not valid, then it

but this cannot be applied on judicial proceedings because

would not have been necessary for MacArthur to come out

such a construction would violate the law of nations.

with a proclamation abrogating them.

3. Since the laws remain valid, the court must continue

The second question, the court said, hinges on the

hearing the case pending before it.

interpretation of the phrase processes of any other

***3 kinds of de facto government: one established through

government and whether or not he intended it to annul all

rebellion (govt gets possession and control through force or

other judgments and judicial proceedings of courts during

the voice of the majority and maintains itself against the will

the Japanese military occupation.

of the rightful government)

IF, according to international law, non-political judgments

through occupation (established and maintained by military

and judicial proceedings of de facto governments are valid

forces who invade and occupy a territory of the enemy in the

and remain valid even after the occupied territory has been

course of war; denoted as a government of paramount force)

liberated, then it could not have been MacArthurs intention

through insurrection (established as an independent

government by the inhabitants of a country who rise in

On September 7, 1920, Mr. Gregorio Perfecto published an

insurrection against the parent state)

article in the newspaper La Nacionregarding the

Laurel vs Misa

disappearance of certain documents in the Office of

Facts: the Supreme Court, in a resolution, acted on the

Fernando M. Guerrero, the Secretary of the Philippine

petition for the writ of

Senate. The article of Mr. Perfecto suggested that the

habeas corpus filed by petitioner anastacio laurel based on

difficulty in finding the perpetrators was due to an official

the theory that a F

concealment by the Senate since the missing documents

ilipino citizen who adhered to the enemy giving the latter aid

constituted the records of testimony given by witnesses in

and comfort durin

the investigation of oil companies. This resulted to a case

g the Japanese occupation cannot be prosecuted for the

being filed against Mr. Perfecto for violation of Article 256 of

crime of treason defined

the Penal Code. He was found guilty by the Municipal Trial

and penalized by article 114 of the revised penal code for

Court and again in the Court of First Instance of Manila. Mr.

the reason that 1) th

Perfecto filed an appeal in the Supreme Court to dismiss the

at the sovereignty of the legitimate government in the

case on the ground that Article 256 was not in force

Philippines and consequen

anymore.

tly, the correlative allegiance of Filipino citizens therto was

then suspended;

Issue:

and 2) that there was a change of sovereignty over these

islands upon the procla

Will a law be abrogated by the change of Spanish to

mation of the Philippine republic.

American Sovereignty over the Philippines?

Issues:
Whether or not the allegiance of the accused as a Filipino

Ruling:

citizen was suspended

and that there was a change of sovereignty over the Phil

The Supreme Court held that Article 256 of the Spanish

Islands.

Penal Code was enacted by the Government of Spain to

Held:

protect Spanish officials who were representative of the

No, a citizen or subject owes, not a qualified and temporary,

King. With the change of sovereignty, a new government,

but an absolute an

and a new theory of government, was set up in the

d permanent allegiance, which consists in the obligation of

Philippines. It was no sense a continuation of the old laws.

fidelity and obedien

No longer is there a Minister of the Crown or a person in

ce to his government of sovereign. The absolute and

authority of such exalted position that the citizen must speak

permanent allegiance of the

of him only in bated breath.

inhabitants of a territory occupied by the enemy to their

legitimate government

The crime of lese majeste disappeared in the Philippines

or sovereign is not abrogated or severed by the enemy

with the ratification of the Treaty of Paris. Ministers of the

occupation, because the so

Crown have no place under the American flag.

vereignty of the government or sovereign de jure is not

transferred thereby the

Judgement is REVERED and the defendant and appellant

occupier.

ACQUITTED.

Just as treason may be committed against the Federal as

Ruffy vs Chief of Staff

well as against the Stat

G.R. No. L-533

e Govt, in the same way treason may have been committed

75 Phil 875

during the Japanese occu

August 20, 1956

pation against the sovereignty of the US as well as against

the sovereignty of t

Petitioners: Ramon Ruffy, et al.

he Phil Commonwealth; and that the change of our form of

Respondents: The Chief of Staff, et al.

govt from commonwealth

to republic does not affect the prosecution of those charged

FACTS: During the Japanese insurrection in the

with the crime of t

Philippines, military men were assigned at designated

reason committed during the commonwealth, bec it is an

camps or military bases all over the country. Japanese

offense against the same

forces went to Mindoro thus forcing petitioner and his

govt and the same sovereign people.

band move up the mountains and organize a guerilla

PEOPLE OF THE PHILIPPINE ISLANDS vs. GREGORIO

outfit and call it the "Bolo area". A certain Capt.

PERFECTO (43 Phil 887) Case Digest

Beloncio relieved Ruffy and fellow petitioners of their

position and duties in the "Bolo area" by the new

Facts:

authority vested upon him because of the recent change

of command. Capt. Beloncio was thus allegedly slain by

the provisions of the Host Agreement. The DFA formally

Ruffy and his fellow petitioners.

advised respondent judge of the Philippine Government's

official position. The Solicitor General, as principal law officer

ISSUE: Whether or not the petitioners were subject to

of the gorvernment, likewise expressly affirmed said

military law at the time the offense was committed, which

petitioner's right to diplomatic immunity and asked for the

was at the time of war and the Japanese occupancy.

quashal of the search warrant.

HELD: The Court held that the petitioners were still subject

It recognized principle of international law and under our

to military law since members of the Armed Forces were still

system of separation of powers that diplomatic immunity is

covered by the National Defense Act, Articles of War and

essentially a political question and courts should refuse to

other laws even during an occupation. The act of

look beyond a determination by the executive branch of

unbecoming of an officer and a gentleman is considered as

government, and where the plea of diplomatic immunity is

a defiance of 95th Article of War held petitioners liable to

recognized by the executive branch of the government as in

military jurisdiction and trial. Moreover, they were operating

the case at bar, it is then the duty of the courts to accept the

officers, which makes them even more eligible for the

claim of immunity upon appropriate suggestion by the

military court's jurisdiction.

principal law officer of the government, the Solicitor General

in this case, or other officer acting under his discretion.

In consideration of the foregoing, the petition has no merit

Courts may not so exercise their jurisdiction by seizure and

and should be dismissed. Thus, the petition is

detention of property, as to embarass the executive arm of

hereby DENIED.

the government in conducting foreign relations.

World Health Organization v. Aquino 48 SCRA 243

The Court, therefore, holds the respondent judge acted
without jurisdiction and with grave abuse of discretion in not
Facts:

ordering the quashal of the search warrant issued by him in

disregard of the diplomatic immunity of petitioner Verstuyft.

Herein petitioner, in behalf of Dr. Verstuyft, was allegedly

SOUTHEAST ASIAN FISHERIES DEVELOPMENT

suspected by the Constabulary Offshore Action Center

CENTER-AQUACULTURE DEPARTMENT (SEAFDEC-

(COSAC) officers of carrying dutiable goods under the

AQD), vs.

Customs and Tariff Code of the Philippines. Respondent

NATIONAL LABOR RELATIONS COMMISSION and

Judge then issued a search warrant at the instance of the

JUVENAL LAZAGA, respondents.

COSAC officers for the search and seizure of the personla

G.R. No. 86773 February 14, 1992

effects of Dr. Verstuyft notwithstanding his being entitled to

diplomatic immunity, as duly recognized by the Executive

FACTS:

branch of the government.

Two labor cases of illegal termination were filed by
The Secretary of Foreign Affairs Carlos P. Romulo advised

the herein private respondents against the petitioner,

the respondent judge that Dr. Verstuyft is entitled to

Southeast Asian Fisheries Development Center

immunity from search in respect for his personal baggage as

(SEAFDEC), before the National Labor Relations

accorded to members of diplomatic missions pursuant to the

Commission (NLRC), Regional Arbitration Branch, Iloilo City.

Host Agreement and further requested for the suspension of

The petitioner, who claims to be an international inter-

the search warrant. The Solicitor General accordingly joined

government organization composed of various Southeast

the petitioner for the quashal of the search warrant but

Asian countries, filed a Motion to Dismiss, challenged the

respondent judge nevertheless summarily denied the

jurisdiction of the public respondent in taking cognizance of

quashal.

the above cases. The private respondents, as well as

respondent labor arbiter, allege that the petitioner is not
immune from suit and assuming that if, indeed, it is an

Issue:

international organization, it has, however, impliedly, if not

expressly, waived its immunity by belatedly raising the issue

Whether or not personal effect of WHO Officer Dr. Verstuyft

of jurisdiction.

can be exempted from search and seizure under the

diplomatic immunity.

ISSUE:
Whether or not the petitioner is immune from suit.

Ruling:

The executive branch of the Phils has expressly recognized

that Verstuyft is entitled to diplomatic immunity, pursuant to

HELD:

The Court ruled for the petitioner. It is beyond

question that petitioner SEAFDEC is an international agency

enjoying diplomatic immunity. It has already been held in

sovereign is exempt from suit,not because of any

Southeast Asian Fisheries Development Center-Aquaculture

formalconception or obsolete theory, but on the logical and

Department vs. National Labor Relations Commission (G.R.

practical ground that therecan beno legal right as against the

No. 86773, 206 SCRA 283/1992). Petitioner Southeast

authority that makes the law on which the right depends.The

Asian Fisheries Development Center-Aquaculture

State may not be sued without its consent. A corollary, both

Department (SEAFDEC-AQD) is an international agency

dictated by logicand soundsense from a basic concept is that

beyond the jurisdiction of public respondent NLRC.

public funds cannot be the object of agarnishment

Being an intergovernmental organization,

proceeding even if theconsent to be sued had been

SEAFDEC including its Departments (AQD), enjoys

previously granted andthe state liability adjudged.The

functional independence and freedom from control of the

universal rule that wherethe State gives its consent tobe

state in whose territory its office is located. One of the basic

sued by private parties either by general or special law, it

immunities of an international organization is immunity from

may limitclaimants actiononly up to the completion of

local jurisdiction, i.e., that it is immune from the legal writs

proceedings anterior to the stage of execution and

and processes issued by the tribunals of the country where it

thatthepower of the Courts ends when the judgment is

is found. The obvious reason for this is that the subjection of

rendered, since the government fundsand properties maynot

such an organization to the authority of the local courts

be seized under writs of execution or garnishment to satisfy

would afford a convenient medium thru which the host

suchjudgments, is based on obviousconsiderations of public

government may interfere in their operations or even

policy.Disbursements of publicfunds must be covered by the

influence or control its policies and decisions of the

correspondingappropriation as required by law.Thefunctions

organization; besides, such objection to local jurisdiction

and public services rendered by the State cannot be

would impair the capacity of such body to discharge its

allowedto be paralyzedor disrupted by the diversion of public

responsibilities impartially on behalf of its member-states.

funds from their legitimate and specific

REPUBLIC VS. VILLASOR, ET AL.

objects,asappropriated by law

G.R. No. L-30671 November 28, 1973

Case: KHOSROW MINUCHER v. CA and ARTHUR
Facts: On July 7, 1969, a decision was rendered in Special

SCALZO (G.R. 142396)

Proceedings No. 2156-R infavor of respondents P.J. Kiener

Date: February 11, 2003

Co., Ltd., Gavino Unchuan, and InternationalConstruction

Ponente: J. Vitug

Corporation and against petitioner confirming the arbitration

award in theamount of P1,712,396.40.The award is for the

Facts:

satisfactionof a judgment against thePhlippine

Minucher is an Iranian national who came to study

Government.On June 24, 1969, respondent Honorable

in UP in 1974 and was appointed Labor Attache for the

Guillermo Villasor issued an Orderdeclaring thedecision final

Iranian Embasies in Tokyo and Manila; he continued to stay

and executory.Villasor directed the Sheriffs of RizalProvince,

in the Philippines when the Shah of Iran was deposed by

Quezon City as well as Manilato execute said decision.The

Khomeini, he became a refugee of the UN and he headed

Provincial Sheriffof Rizal served Notices of Garnishment with

the Iranian National Resistance Movement in the Philippines.

several Banks,specially on PhilippineVeterans Bank and

PNB.The funds of the Armed Forces of the Philippines on

On the other hand, Scalzo was a special agent of

deposit with PhilippineVeterans Bank andPNB are public

the US Drugs Enforcement Agency. He conducts

funds duly appropriated and allocated for thepayment of

surveillance operations on suspected drug dealers in the

pensions of retirees, pay andallowances of military and

Philippines believed to be the source of prohibited drugs

civilian personneland for maintenance and operations of the

shipped to the US and make the actual arrest.

AFP.Petitioner, on certiorari, filed prohibition proceedings

against respondent JudgeVillasor for acting in excess of

Minucher and one Abbas Torabian was charged

jurisdiction with grave abuse of discretion amounting tolack

for a violation of Act. 6425 (Dangerous Drugs Act of 1972)

of jurisdiction in grantingthe issuance of a Writ of Execution

before the Pasig RTC, such criminal charge was followed by

against the propertiesof the AFP, hence the notices and

a buy-bust operation conducted by the Philippine police

garnishment arenull and void.

narcotic agents to which Scalzo was a witness for the

prosecution. They were acquitted.

Issue: Is the Writ of Execution issued by Judge Villasor

valid?

Later on, Minucher filed a complaint for damages

against Scalzo. It was said that Minucher and Scalzo came

Held: What was done by respondent Judge is not in

to know of each other thru Jose Iigo; they conducted some

conformity with the dictates of theConstitution.It isa

business i.e. the former sold to the latter some caviar and

fundamental postulate of constitutionalism flowing from the

Persian carpets. Scalzo then represented himself as a

juristicconcept of sovereignty that the stateas well as its

special agent of the Drug Enforcement Administration, DOJ

government is immune from suitunless it gives its consent.A

of US.

also be a class of attaches belonging to certain ministries or

Minucher expressed his desire to obtain a US Visa

departments of the government, other than the foreign

for him and his Abbass wife. Scalzo told him that he could

ministry or department, who are detailed by their respective

help him for a $2,000 fee per visa. After a series of business

ministries or departments with the embassies such as the

transactions between the two, when Scalzo came to deliver

military, naval, air, commercial, agricultural, labor, science,

the visas to Minuchers house, he told the latter that he

and customs attaches, or the like. Attaches assist a chief

would be leaving the Philippines soon and requested him to

of mission in his duties and are administratively under

come out of the house so he can introduce him to his cousin

him, but their main function is to observe, analyze and

waiting in the cab. To his surprise, 30-40 armed Filipino

interpret trends and developments in their respective

soldiers came to arrest him.

fields in the host country and submit reports to their

own ministries or departments in the home government.

In his complaint for damages, he said that some of

These officials are not generally regarded as members

his properties were missing like Persian carpets, a painting

of the diplomatic mission, nor are they normally

together with his TV and betamax sets. There was nothing

designated as having diplomatic rank.

left in his house. He averred that his arrest as a heroine

Vesting a person with diplomatic immunity is a

trafficker was well publicized and that when we got arrested,

prerogative of the executive branch of the government.

he was not given any food or water for 3 days.

The government of the United States itself, which Scalzo

claims to be acting for, has formulated its standards for

In his defense, Scalzo asserted his diplomatic

recognition of a diplomatic agent. The State Department

immunity as evidenced by a Diplomatic Note. He contended

policy is to only concede diplomatic status to a person who

that it was recognized by the US Government pursuant to

possesses an acknowledged diplomatic title and "performs

the Vienna Convention on Diplomatic Relations and the

duties of diplomatic nature." Supplementary criteria for

Philippine government itself thru its Executive Department

accreditation are the possession of a valid diplomatic

and DFA.

passport or, from States which do not issue such passports,

a diplomatic note formally representing the intention to
The courts ruled in favor of Scalzo on the ground

assign the person to diplomatic duties, the holding of a non-

that as a special agent of the US Drug Enforcement

immigrant visa, being over twenty-one years of age, and

Administration, he was entitled to diplomatic immunity.

performing diplomatic functions on an essentially full-time

Hence, the present recourse of Minucher.

basis. Diplomatic missions are requested to provide the most

accurate and descriptive job title to that which currently

Issue: WON Scalzo is entitled to diplomatic immunity

applies to the duties performed. The Office of the Protocol

would then assign each individual to the appropriate

Held: Yes.

functional category.
While the diplomatic immunity of Scalzo might thus

Ratio:

remain contentious, it was sufficiently established that,

The Convention lists the classes of heads of

indeed, he worked for the United States Drug

diplomatic missions to include (a) ambassadors or nuncios

Enforcement Agency and was tasked to conduct

accredited to the heads of state, (b) envoys, ministers

surveillance of suspected drug activities within the

or internuncios accredited to the heads of states; and (c)

country on the dates pertinent to this case. If it should

charges d' affairs accredited to the ministers of foreign

be ascertained that Arthur Scalzo was acting well within

affairs. Comprising the "staff of the (diplomatic) mission" are

his assigned functions when he committed the acts

the diplomatic staff, the administrative staff and the technical

alleged in the complaint, the present controversy could

and service staff. Only the heads of missions, as well as

then be resolved under the related doctrine of State

members of the diplomatic staff, excluding the members of

Immunity from Suit.

the administrative, technical and service staff of the mission,

The precept that a State cannot be sued in the courts of

are accorded diplomatic rank. Even while the Vienna

a foreign state is a long-standing rule of customary

Convention on Diplomatic Relations provides for immunity to

international law then closely identified with the personal

the members of diplomatic missions, it does so,

immunity of a foreign sovereign from suit and, with the

nevertheless, with an understanding that the same be

emergence of democratic states, made to attach not just to

restrictively applied. The main yardstick in ascertaining

the person of the head of state, or his representative, but

whether a person is a diplomat entitled to immunity is

also distinctly to the state itself in its sovereign capacity. If

the determination of whether or not he performs duties

the acts giving rise to a suit are those of a foreign

of diplomatic nature.

government done by its foreign agent, although not

Scalzo was an Assistant Attach of the US diplomatic

necessarily a diplomatic personage, but acting in his official

mission. An attach belongs to a category of officers in the

capacity, the complaint could be barred by the immunity of

diplomatic establishment who may be in charge of its

the foreign sovereign from suit without its consent. Suing a

cultural, press, administrative or financial affairs. There could

representative of a state is believed to be, in effect, suing the

state itself. The proscription is not accorded for the benefit of

have acted beyond the scope of his official function or

an individual but for the State, in whose service he is, under

duties.

the maxim - par in parem, non habet imperium - that all

Lasco vs UNRFNRE

states are sovereign equals and cannot assert jurisdiction

Case Digest_Eldepio Lasco et al v United Nations Revolving

over one another.22 The implication, in broad terms, is that if

Fund For Natural Resources Exploration (UNRFNRE)

the judgment against an official would require the state itself

G.R. Nos. 109095-109107 February 23, 1995

to perform an affirmative act to satisfy the award, such as

Facts: Petitioners were dismissed from their employment

the appropriation of the amount needed to pay the damages

with privaterespondent, the United Nations Revolving Fund

decreed against him, the suit must be regarded as being

for NaturalResourcesExploration (UNRFNRE), which is a

against the state itself, although it has not been formally

special fund and subsidiary organ of theUnited Nations.The

impleaded.

UNRFNRE is involved in a joint project of

(T)he doctrine of immunity from suit will not apply and may

thePhilippineGovernment and the United Nations for

not be invoked where the public official is being sued in his

exploration work in Dinagat Island.Petitioners are

private and personal capacity as an ordinary citizen. The

thecomplainants for illegal dismissal and damages.Private

cloak of protection afforded the officers and agents of the

respondent alleged that respondent Labor Arbiter had no

government is removed the moment they are sued in their

jurisdiction over its personality since itenjoyed diplomatic

individual capacity. This situation usually arises where the

immunity.

public official acts without authority or in excess of the

powers vested in him. It is a well-settled principle of law that

Issue:WON specialized agencies enjoy diplomatic immunity

a public official may be liable in his personal private capacity

for whatever damage he may have caused by his act done

Held:Petition is dismissed. This is not to say that petitioner

with malice and in bad faith or beyond the scope of his

have no recourse.Section 31 of the Convention on the

authority and jurisdiction."

Privileges and Immunitiesof the SpecializedAgencies of the

Indeed, a foreign agent, operating within a territory, can be

United Nations states that each specialized agency shall

cloaked with immunity from suit but only as long as it can be

makea provision for appropriate modes of settlement of (a)

established that he is acting within the directives of the

disputes arising out of contracts or other disputes of private

sending state. The consent of the host state is an

character to which thespecialized agencyisa party. Private

indispensable requirement of basic courtesy between the

respondent is not engaged in a commercial venture in

two sovereigns.

thePhilippines.Its presence is by virtue of a joint project

While evidence is wanting to show any similar agreement

entered into by thePhilippine Government and theUnited

between the governments of the Philippines and of the

Nations for mineral exploration in DinagatIsland

United States (for the latter to send its agents and to conduct

ERNESTO CALLADO vs. INTERNATIONAL RICE

surveillance and related activities of suspected drug dealers

RESEARCH INSTITUTE (IRRI)

in the Philippines), the consent or imprimatur of the

Philippine government to the activities of the United

G.R. No. 106483 May 22, 1995/ ROMERO, J.:

States Drug Enforcement Agency, however, can be

Facts: Ernesto Callado, petitioner, was employed as a driver

gleaned from the facts heretofore elsewhere mentioned.

at the IRRI. One day while driving an IRRI vehicle on an

The official exchanges of communication between

official trip to the NAIA and back to the IRRI, petitioner

agencies of the government of the two countries,

figured in an accident.

certifications from officials of both the Philippine

Department of Foreign Affairs and the United States

Petitioner was informed of the findings of a preliminary

Embassy, as well as the participation of members of the

investigation conducted by the IRRI's Human Resource

Philippine Narcotics Command in the "buy-bust

Development Department Manager. In view of the findings,

operation" conducted at the residence of Minucher at

he was charged with:

the behest of Scalzo, may be inadequate to support the

(1) Driving an institute vehicle while on official duty under the

"diplomatic status" of the latter but they give enough

influence of liquor;

indication that the Philippine government has given

(2) Serious misconduct consisting of failure to report to

its imprimatur, if not consent, to the activities within

supervisors the failure of the vehicle to start because of a

Philippine territory of agent Scalzo of the United States

problem with the car battery, and

Drug Enforcement Agency. The job description of Scalzo

(3) Gross and habitual neglect of duties.

has tasked him to conduct surveillance on suspected drug

suppliers and, after having ascertained the target, to inform

Petitioner submitted his answer and defenses to the charges

local law enforcers who would then be expected to make the

against him. However, IRRI issued a Notice of Termination

arrest. In conducting surveillance activities on Minucher,

to petitioner.

later acting as the poseur-buyer during the buy-bust

operation, and then becoming a principal witness in the
criminal case against Minucher, Scalzo hardly can be said to

Thereafter, petitioner filed a complaint before the Labor

courts to accept the claim of immunity upon appropriate

Arbiter for illegal dismissal, illegal suspension and indemnity

suggestion by the principal law officer of the government or

pay with moral and exemplary damages and attorney's fees.

other officer acting under his direction.

IRRI wrote the Labor Arbiter to inform him that the Institute

The raison d'etre for these immunities is the assurance of

enjoys immunity from legal process by virtue of Article 3 of

unimpeded performance of their functions by the agencies

Presidential Decree No. 1620, 5 and that it invokes such

concerned.

diplomatic immunity and privileges as an international

organization in the instant case filed by petitioner, not having

The grant of immunity to IRRI is clear and unequivocal and

waived the same.

an express waiver by its Director-General is the only way by

which it may relinquish or abandon this immunity.

While admitting IRRI's defense of immunity, the Labor

Arbiter, nonetheless, cited an Order issued by the Institute

In cases involving dismissed employees, the Institute may

to the effect that "in all cases of termination, respondent IRRI

waive its immunity, signifying that such waiver is

waives its immunity," and, accordingly, considered the

discretionary on its part.

defense of immunity no longer a legal obstacle in resolving

ICMC vs. Calleja

the case.

International Catholic Migration Commission vs. Calleja [GR

85750, Sept. 28, 1990]

The NLRC found merit in private respondent's appeal and,

finding that IRRI did not waive its immunity, ordered the

Facts:

aforesaid decision of the Labor Arbiter set aside and the

An Agreement was forged between the Philippine

complaint dismissed.

Government and the United Nations High Commissioner for

Refugees [Vietnamese refugees of the Vietnam War]

In this petition petitioner contends that the immunity of the

whereby an operating center for processing Indo-Chinese

IRRI as an international organization granted by Article 3 of

refugees for eventual resettlement to other countries was to

Presidential Decree No. 1620 may not be invoked in the

be established inBataan.

case at bench inasmuch as it waived the same by virtue of

its Memorandum on "Guidelines on the handling of

ICMC was one of those accredited by the Philippine

dismissed employees in relation to P.D. 1620."

Government to operate the refugee processing center in

Morong, Bataan. It was incorporated in New York, USA, at

Issue: Did the (IRRI) waive its immunity from suit in this

the request of the Holy See, as a non-profit agency involved

dispute which arose from an employer-employee

in international humanitarian and voluntary work. It is duly

relationship?

registered with the United Nations Economic and Social

Council (ECOSOC) and enjoys Consultative Status,

Held: No.

Category II. As an international organization rendering

voluntary and humanitarian services in the Philippines.

P.D. No. 1620, Article 3 provides:

Art. 3. Immunity from Legal Process. The Institute shall enjoy

Trade Unions of the Philippines and Allied Services (TUPAS)

immunity from any penal, civil and administrative

filed with the then Ministry of Labor and Employment a

proceedings, except insofar as that immunity has been

Petition for Certification Election among the rank and file

expressly waived by the Director-General of the Institute or

members employed by ICMC. The latter opposed the

his authorized representatives.

petition on the ground that it is an international organization

registered with the United Nations and, hence, enjoys

The SC upholds the constitutionality of the aforequoted law.

diplomatic immunity.

There is in this case "a categorical recognition by the

Executive Branch of the Government that IRRI enjoys

Director Pura Calleja of the Bureau of Labor Relations

immunities accorded to international organizations, which

(BLR), reversed the Med-Arbiter's Decision and ordered the

determination has been held to be a political question

immediate conduct of a certification election. At that

conclusive upon the Courts in order not to embarass a

time, ICMC's request for recognition as a specialized agency

political department of Government.

was still pending with the Department of Foreign Affairs

It is a recognized principle of international law and under our

(DEFORAF).

system of separation of powers that diplomatic immunity is

essentially a political question and courts should refuse to

Subsequently, DEFORAF, granted ICMC the status of a

look beyond a determination by the executive branch of the

specialized agency with corresponding diplomatic privileges

government, and where the plea of diplomatic immunity is

and immunities, as evidenced by a Memorandum of

recognized and affirmed by the executive branch of the

Agreement between the Government and ICMC. ICMC then

government as in the case at bar, it is then the duty of the

sought the immediate dismissal of the TUPAS Petition for

Certification Election sustaining the affirmative of the

places where others not involved in the case could hear."

proposition.
Before the start of the grievance hearings, a-letter from
Issue:

petitioner Moreau was sent to the Chief of Naval Personnel

Is the grant of diplomatic privileges and immunites to ICMC

explaining the change of the private respondent's

is proper?

employment status. So, private respondent filed for damages

Held:

alleging that the letters contained libelous imputations and

The foregoing opinions constitute a categorical recognition

that the prejudgment of the grievance proceedings was an

by the Executive Branch of the Government that ICMC and

invasion of their personal and proprietary rights.

IRRI enjoy immunities accorded to international

organizations, which determination has been held to be a

However, petitioners argued that the acts complained of

political question conclusive upon the Courts in order not to

were performed by them in the discharge of their official

embarrass a political department of Government.

duties and that, consequently, the court had no jurisdiction

It is a recognized principle of international law and under our

over them under the doctrine of state immunity. However,

system of separation of powers that diplomatic immunity is

the motion was denied on the main ground that the

essentially a political question and courts should refuse to

petitioners had not presented any evidence that their acts

look beyond a determination by the executive branch of the

were official in nature.

government, and where the plea of diplomatic immunity is

recognized and affirmed by the executive branch of the

ISSUE:

government as in the case at bar, it is then the duty of the

courts to accept the claim of immunity upon appropriate

Whether or not the petitioners were performing their official

suggestion by the principal law officer of the government . . .

duties?

or other officer acting under his direction. Hence, in

adherence to the settled principle that courts may not so

RULING:

exercise their jurisdiction . . . as to embarrass the executive

arm of the government in conducting foreign relations, it is

Yes. Sanders, as director of the special services department

accepted doctrine that in such cases the judicial department

of NAVSTA, undoubtedly had supervision over its personnel,

of (this) government follows the action of the political branch

including the private respondents. Given the official

and will not embarrass the latter by assuming an

character of the letters, the petitioners were being sued as

antagonistic jurisdiction.

officers of the United States government because they have

Sanders v. Veridiano GR L-46930 (June10, 1988)

acted on behalf of that government and within the scope of

FACTS:

their authority. Thus, it is that government and not the

petitioners personally that is responsible for their acts.

Petitioner Sanders was the special services director of the

U.S. Naval Station. Petitioner Moreau was the

It is stressed at the outset that the mere allegation that a

government functionary is being sued in his personal

commanding officer of the Subic Naval Base. Private

capacity will not automatically remove him from the

respondent Rossi is an American citizen with permanent

protection of the law of public officers and, if appropriate, the

residence in the Philippines. Private respondent Rossi and

doctrine of state immunity. By the same token, the mere

Wyer were both employed as game room attendants in the

invocation of official character will not suffice to insulate him

special services department of the NAVSTA.

from suability and liability for an act imputed to him as a

personal tort committed without or in excess of his authority.

On October 3, 1975, the private respondents were advised

These well-settled principles are applicable not only to the

that their employment had been converted from permanent

officers of the local state but also where the person sued in

full-time to permanent part-time. They instituted grievance

its courts pertains to the government of a foreign state, as in

proceedings to the rules and regulations of the U.S.

the present case.

Department of Defense. The hearing officer recommended

for reinstatement of their permanent full-time status.

Assuming that the trial can proceed and it is proved that the
claimants have a right to the payment of damages, such

However, in a letter addressed to petitioner Moreau,

award will have to be satisfied not by the petitioners in their

Sanders disagreed with the hearing officer's report. The

personal capacities but by the United States government as

letter contained the statements that: a ) "Mr. Rossi tends to

their principal. This will require that government to perform

alienate most co-workers and supervisors;" b) "Messrs.

an affirmative act to satisfy the judgment, viz, the

Rossi and Wyers have proven, according to their immediate

appropriation of the necessary amount to cover the damages

supervisors, to be difficult employees to supervise;" and c)

awarded, thus making the action a suit against that

"even though the grievants were under oath not to discuss

government without its consent.

the case with anyone, (they) placed the records in public

The practical justification for the doctrine, as Holmes put it, is

whether the complaint of respondent Pablo

that "there can be no legal right against the authority which

Feliciano for recovery of ownership and possession of a

makes the law on which the right depends. In the case of

parcel of land should be dismissed on the ground of non-

foreign states, the rule is derived from the principle of the

suability of the State

sovereign equality of states which wisely admonishes that

par in parem non habet imperium and that a contrary attitude

Held:

would "unduly vex the peace of nations."

17

Yes. The plaintiff has impleaded the Republic of

the Philippines as defendant in an action for recovery of

Our adherence to this precept is formally expressed in

ownership and possession of a parcel of land, bringing the

Article II, Section 2, of our Constitution, where we reiterate

State to court just like any private person who is claimed to

from our previous charters that the Philippines "adopts the

be usurping a piece of property.

generally accepted principles of international law as part of

the law of the land. WHEREFORE, the petition is

The complaint is clearly a suit against the State,

GRANTED.

which under settled jurisprudence is not permitted, except

Republic v. Feliciano

upon a showing that the State has consented to be sued,

G.R. No. 70853 March 12, 1987

either expressly or by implication through the use of statutory

Yap, J.

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,

Facts:

and on this basis alone, the complaint should have been

Respondent Feliciano filed a complaint with the

dismissed.

then Court of First Instance of Camarines Sur against the

The failure of the petitioner to assert the defense

Republic of the Philippines, represented by the Land

Authority, for the recovery of ownership and possession of a

of immunity from suit when the case was tried before the

parcel of land, consisting of four (4) lots with an aggregate

court a quo, as alleged by private respondent, is not fatal.

area of 1,364.4177 hectares, situated in the Barrio of

Such defense may be invoked by the courts sua sponte at

Salvacion, Municipality of Tinambac, Camarines Sur. Plaintiff

any stage of the proceedings.

alleged that he bought the property in question from Victor

Tan v. Director of Forestry

Gardiola by virtue of a Contract of Sale dated May 31, 1952,

G.R. No. L- 24548October 27, 1983

followed by a Deed of Absolute Sale on October 30, 1954;

Makasiar, J.

that Gardiola had acquired the property by purchase from

the heirs of Francisco Abrazado whose title to the said

Facts:

property was evidenced by an informacion posesoria that

upon plaintiffs purchase of the property, he took actual

Sometime in April 1961, the Bureau of Forestry

possession of the same, introduced various improvements

issued Notice No. 2087, advertising for public bidding a

therein and caused it to be surveyed in July 1952, which

certain tract of public forest land situated in Olongapo,

survey was approved by the Director of Lands on October

Zambales, provided tenders were received on or before May

24, 1954; that on November 1, 1954, President Ramon

22, 1961. This public forest land, consisting of 6,420

Magsaysay issued Proclamation No. 90 reserving for

hectares, is located within the former U.S. Naval Reservation

settlement purposes, under the administration of the

comprising 7,252 hectares of timberland, which was turned

National Resettlement and Rehabilitation Administration

over by the United States Government to the Philippine

(NARRA), a tract of land situated in the Municipalities of

Government.

Tinambac and Siruma, Camarines Sur, after which the

NARRA and its successor agency, the Land Authority,

On May 5, 1961, petitioner-appellant Wenceslao Vinzons

started sub-dividing and distributing the land to the settlers;

Tan submitted his application in due form after paying the

that the property in question, while located within the

necessary fees and posting tile required bond therefor. Nine

reservation established under Proclamation No. 90, was the

other applicants submitted their offers before the deadline.

private property of plaintiff and should therefore be excluded

therefrom. Plaintiff prayed that he be declared the rightful

On May 30, 1963, the Secretary of Agriculture and Natural

and true owner of the property in question consisting of

Resources Benjamin M. Gozon who succeeded Secretary

1,364.4177 hectares; that his title of ownership based

Cesar M. Fortich in office issued General Memorandum

on informacion posesoria of his predecessor-in-interest be

Order No. 46, series of 1963, pertinent portions of which

declared legal valid and subsisting and that defendant be

state:

ordered to cancel and nullify all awards to the settlers.

xxx xxx xxx

Issue:
SUBJECT: ... ... ...

(D)elegation of authority to the Director of Forestry to grant

Ravago Commercial Company and Jorge Lao Happick from

ordinary timber licenses.

the order of the Director of Forestry denying their motion for

1. ... ... ...

reconsideration, OTI No. 20-64 in the name of Wenceslao

2. The Director of Forestry is hereby authorized to grant (a)

V. Tan be cancelled or revoked on the ground that the grant

new ordinary timber licenses where the area covered

thereof was irregular, anomalous and contrary to existing

thereby is not more than 3,000 hectares each; and (be the

forestry laws, rules and regulations.

extension of ordinary timber licenses for areas not exceeding

Issue:

5,000 hectares each;

3. This Order shall take effect immediately.

whether the case involves a suit against the State

without its consent
Held:

Thereafter, Jose Y. Feliciano was appointed as Acting

Yes. This action is a suit against the State which,

secretary of Agriculture and Natural Resources, replacing

under the doctrine of State immunity from suit, cannot

secretary Benjamin M. Gozon. Upon assumption of office he

prosper unless the State gives its consent to be sued. The

Immediately promulgate on December 19, 19b3 General

rule establishing State immunity from suits may not be

memorandum Order No. 60, revoking the authority

circumvented by directing the action against the officers of

delegated to the Director of Forestry, under General

the State instead of against the State itself. In such cases

Memorandum order No. 46, to grant ordinary timber

the States immunity may be validly invoked against the

licenses, which order took effect on the same day,

action as long as it can be shown that the suit really affects

December 19, 1963. Pertinent portions of the said Order

the property, rights, or interests of the State and not merely

read as follows:

those of the officer nominally made party defendant.

xxx xxx xxx

Both the Secretary of Agriculture and Natural

Resources and the Director of Forestry acted in their

SUBJECT: Revocation of General Memorandum Order No

capacity as officers of the State, representatives of the

46 dated May 30, 1963

sovereign authority discharging governmental powers. A

private individual cannot issue a timber license.

1. In order to acquaint the undersigned with the volume and

Consequently, a favorable judgment for the petitioner-

Nature of the work of the Department, the authority

appellant would result in the government losing a substantial

delegated to the Director of forestry under General

part of its timber resources. This being the case, petitioner-

Memorandum Order No. 46, dated May 30, 1963, to grant

appellants action cannot prosper unless the State gives its

(a) new ordinary timber licenses where the area covered

consent to be sued.

thereby is not more than 3,000 hectares each; and (b) the
extension of ordinary timber licenses for areas not exceeding

Veterans Manpower and Protective Services, Inc. vs. Court of

3,000 hectares each is hereby revoked. Until further notice,

Appeals

the issuance of new licenses , including amendments

thereto, shall be signed by the secretary of Agriculture and
Natural Resources.

FACTS:
This is a petition for review on certiorari of the
decision dated August 11, 1989. On May 12, 1986, a

2. This Order shall take effect immediately and all other

Memorandum of Agreement was executed by PADPAO and

previous orders, directives, circulars, memoranda, rules and

the PC Chief, which fixed the minimum monthly contract rate

regulations inconsistent with this Order are hereby revoked

per guard for eight (8)hours of service security per day. On

(Emphasis supplied).

June 29, 1987, Odin Security Agency filed a complaint with

PADPAO accusing VMPSI of cut-throat competition.

On December 19, 1963, Ordinary Timber License No. 20-64

PADPAO and PC-SUSIA found VMPSI guilty and

(NEW) dated April 22, 1963, in the name of Wenceslao

recommended its expulsion from PADPAO and the

Vinzons Tan, was signed by then Acting Director of Forestry

cancellation of its license to operate a security agency. As a

Estanislao R. Bernal without the approval of the Secretary of

result, PADPAO refused to issue a clearance/certificate

Agriculture and Natural Resources. On January 6, 1964, the

of membership to VMPSI when it requested one. VMPSI

license was released by the Office of the Director of

filed Civil Case No. 88-471 against the PC-Chief and PC-

Forestry. It was not signed by the Secretary of Agriculture

SUSIA in the RTC-Makati Branch 135, on March 28, 1988.

and Natural Resources as required by Order No. 60

On the same date, the court issued a restraining order

aforequoted.

enjoining the PC Chief and PC-SUSIA from committing acts

that would result in the cancellation or non-renewal of

On February 12, 1964, Ravago Commercial Company wrote

VMPSIs license. The PC Chief and PC-SUSIA filed a Motion

a letter to the Secretary of Agriculture and Natural

to Dismiss, Opposition to the Issuance of Writ of Preliminary

Resources shall be considered by tile Natural Resources

Injunction, and Motion to Quash the TRO, on the grounds

praying that, pending resolution of the appeal filed by

that the case is against the State which had not given

consent thereto and that VMPSIs license already expired on

authorized deputy sheriff to serve the writ of execution

March 31, 1988, hence, the restraining order or preliminary

was contrary to law and (2) that the funds subject of the

injunction would not serve any purpose because there was

garnishment "may be public in character."

no more license to be cancelled. Respondent VMPSI

The order of August 26, 1970 of respondent Court

opposed the motion. On April 18, 1988 the lower court

denying the motion to quash, subject of this certiorari

denied VMPSIs application for a writ of preliminary

proceeding, reads as follows: "The Philippine National

injunction for being premature but VMPSI reiterated its

Bank moves to quash the notice of garnishment served

application for the issuance of preliminary injunction because

upon its branch in Quezon City by the authorized deputy

PC-SUSIA had rejected payment of the penalty for its failure

sheriff of this Court. It contends that the service of the

to submit its application for renewal of its license. On June

notice by the authorized deputy sheriff of the court

10, 1988, the RTC-Makati issued a writ of preliminary

contravenes Section 11 of Commonwealth Act No. 105,

injunction upon a bond of P100,000. restraining the

as amended which reads:" 'All writs and processes

defendant from cancelling or denying renewal of VMPSIs

issued by the Court shall be served and executed free of

license. The PC-Chief and PC-SUSIA filed a Motion for

charge by provincial or city sheriffs, or by any person

Reconsideration of the above order, but it was denied by the

authorized by this Court, in the same manner as writs

court. On November 3, 1988, the PC-Chief and PC-SUSIA

and processes of Courts of First Instance.' Following the

sought relief by a petition for certiorari in the Court of

law, the Bank argues that it is the Sheriff of Quezon City,

Appeals. On August 11, 1989, the Court of Appeals granted

and not the Clerk of this Court who is its Ex-Officio

the petition.

Sheriff, that has the authority to serve the notice of

garnishment, and that the actual service by the latter

HELD:

officer of said notice is therefore not in order. The Court

Wherefore, the petition for review is DENIED and the

finds no merit in this argument. Republic Act No. 4201

judgment appealed from is AFFIRMED

has, since June 19, 1965, already repealed

in toto. The State may not be sued without its consent.

Commonwealth Act No. 103, and under this law, it is

Invoking this rule, the PC Chief and PC-SUSIA, being

now the Clerk of this Court that is at the same time the

instrumentalities of the national government exercising a

Ex-Officio Sheriff. As such Ex-Officio Sheriff, the Clerk

primarily governmental function of regulating the

of this Court has therefore the authority to issue writs of

organization and operation of private detective, watchmen,

execution and notices of garnishment in an area

or security guard agencies, said official and agency may not

encompassing the whole of the country, including

be sued without the Governments consent, especially in this

Quezon City, since his area of authority is coterminous

case because VMPSIs complaint seeks not only to compel

with that of the Court itself, which is national in nature.

the public respondents to act in a certain way, but worse,

... At this stage, the Court notes from the record that the

because VMPSI seeks actual and compensatory damages in

appeal to the Supreme Court by individual employees of

the sum P1,000,000.00 exemplary damages in the same

PHHC which questions the award of attorney's fees to

amount, and P200,000.00 as attorneys fees from said public

Atty. Gabriel V. Manansala, has already been dismissed

respondents. Even if its action prospers, the payment of its

and that the same became final and executory on

monetary claims may not been forced because the State did

August 9, 1970. There is no longer any reason,

not consent to appropriate the necessary funds for that

therefore, for withholding action in this case.

purpose.

[Wherefore], the motion to quash filed by the Philippine

National Bank is denied for lack of merit. The said Bank

PRINCIPLE:

is therefore ordered to comply within five days from

States immunity from suit.

receipt with the 'notice of Garnishment' dated May 6,

1970." 5 There was a motion for reconsideration filed by

PNB v. CIR

petitioner, but in a resolution dated September 22, 1970,

Facts:

it was denied. Hence, this certiorari petition.

Petitioners motion to quash a notice of garnishment

Issue: WON the funds mentioned may be garnished

was denied for lack of merit. What was sought to be

Ruling: No

garnished was the money of the People's Homesite and

Rationale:

Housing Corporation deposited at petitioner's branch in

National Shipyard and Steel Corporation v. court of

Quezon City, to satisfy a decision of respondent Court

Industrial Relations 6 is squarely in point. As was

which had become final and executory. A writ of

explicitly stated in the opinion of the then Justice, later

execution in favor of private respondent Gabriel V.

Chief Justice, Concepcion: "The allegation to the effect

Manansala had previously been issued. He was the

that the funds of the NASSCO are public funds of the

counsel of the prevailing party, the United Homesite

government, and that, as such, the same may not be

Employees and Laborers Association. The validity of the

garnished, attached or levied upon, is untenable for, as

order assailed is challenged on two grounds: (1) that the

a government owned and controlled corporation. the

appointment of respondent Gilbert P. Lorenzo as

NASSCO has a personality of its own, distinct and

separate from that of the Government. It has pursuant to

Spouses David and Socorro Cruz, applied and

Section 2 of Executive Order No. 356, dated October 23,

granted a real estate loan by the SSS with residential lot

1950 ..., pursuant to which the NASSCO has been

located at Pateros, Rizal as collateral. The spouses Cruz

established 'all the powers of a corporation under the

complied with their monthly payments. When delayed were

Corporation Law ...' Accordingly, it may sue and be sued

incurred in their monthly payments SSS filed a petition for

and may be subjected to court processes just like any

foreclosure of their real estate mortgage executed by the

other corporation (Section 13, Act No. 1459), as

spouses Cruz on the ground that the spouses Cruz defaulted

amended."

in payment, Pursuant for these application for foreclosure

In a 1941 decision, Manila Hotel Employees Association

notices were published on the second notice the counsel for

v. Manila Hotel Company, 8 this Court, through Justice

spouses Cruz sent a letter to SSS informing the latter that

Ozaeta, held: "On the other hand, it is well settled that

his clients are up to date in their payment of the monthly

when the government enters into commercial business,

amortization and the SSS should discontinued the

it abandons its sovereign capacity and is to be treated

publication of the notices of foreclosure. This request remain

like any other corporation. (Bank of the United States v.

unheaded, this spouses Cruz filed an action for damages

Planters' Bank, Wheat, 904, 6 L.ed. 244). By engaging

against SSS before RTC in Rizal. SSS invoking its immunity

in a particular business thru the instrumentality of a

from suit being an agency of the government performing

corporation, the governmnent divests itself pro hac vice

government function. The trial court and court of appeal

of its sovereign character, so as to render the

nevertheless awarded damages in favor of spouses Cruz

corporation subject to the rules of law governing private

which was affirmed by court of appeal, Hence this petition.

corporations."
Both the Palacio and the Commissioner of Public

ISSUE: Whether or not SSS is immune from suit.

Highways decisions, insofar as they reiterate the

doctrine that one of the coronaries of the fundamental

HELD:

concept of non-suability is that governmental funds are

Negative.. The SSS has a distinct legal personality

immune from garnishment. It is an entirely different

and it can be sued for damages. The SSS does not enjoy

matter if, according to Justice Sanchez in Ramos v.

immunity from suit by express statutory consent.

Court of Industrial Relations, the office or entity is

"possessed of a separate and distinct corporate

It has corporated power separate and distinct from

existence." Then it can sue and be sued. Thereafter, its

the government. SSS own organic act specifically provides

funds may be levied upon or garnished.

that it can sue and be sued in court. These words sue and

GAUDENCIO RAYO vs. COURT OF FIRST INSTANCE OF

be sued embrace all civil process incident to a legal action.

BULACAN G.R. No. L-55273-83 December 19, 1981

So that even assuming that the SSS, as it claims, enjoys

FACTS: At the height of the infamous typhoon "Kading", the

immunity from suit as an entity performing governmental

respondent opened simultaneously all the three floodgates

function, by virtue of the explicit provision of the aforecited

of the Angat Dam which resulted in a sudden, precipitate

enabling law, the government must be deemed to have

and simultaneous opening of said floodgates several towns

waived immunity in respect of the SSS, although it does not

in Bulacan were inundated. The petitioners filed for damages

thereby concede its liability that statutory law has given to

against the respondent corporation. Petitioners opposed the

the private citizen a remedy for the enforcement and

prayer of the respondents forn dismissal of the case and

protection of his rights. The SSS thereby has been required

contended that the respondent corporation is merely

to submit to the jurisdiction of the court; subject to its right to

performing a propriety functions and that under its own

interpose any lawful defense.

organic act, it can sue and be sued in court.

PNR v. IAC

ISSUE: W/N the respondent performs governmental

GR No. 70547; January 22, 1993

functions with respect to the management and operation of

the Angat Dam.

FACTS:

W/N the power of the respondent to sue and be sued under

The passenger express train of Philippine National Railways

its organic charter includes the power to be sued for tort.

(PNR) and a passenger bus of Baliwag Transit Inc. collided

HELD: The government has organized a private corporation,

at the railroad crossing at Barrio Balungao, Calumpit

put money in it and has allowed it to sue and be sued in any

Bulacan at 1:30 in the afternoon of August 10, 1947 causing

court under its charter. As a government owned and

damage to the bus and its passengers, 18 of whom died and

controlled corporation, it has a personality of its own, distinct

53 suffered physical injuries. Plaintiff alleges that the

and separate from that of the government. Moreover, the

collision was due to the negligence and imprudence of PNR

charter provision that it can sue and be sued in any court.

and its engineer Honorio Cirbado in operating in a busy

SSS vs. CA

intersection without any bars, semaphores, signal lights,

(120 SCRA 707)

flagman or switchman.

FACTS:

ISSUE:

1)

Who between the petitioner and respondent was

Administrative Code of 1916 (Act No. 2657). As such

negligent?

instrumentality of the Government, it operates under the

2)

direct supervision of the Executive Secretary, Office of the

Is PNR immune from suit?

President, and is "charged with the execution of all printing

HELD:

and binding, including work incidental to those processes,

There is no admissible evidence to show that the bus driver

required by the National Government and such other work of

did not take necessary precaution in traversing the track.

the same character as said Bureau may, by law or by order

Contributory negligence may not be ascribed to the bus

of the Executive Secretary, be authorized to undertake...". It

driver for he had taken necessary precautions before

has no corporate existence, and its appropriations are

passing over the railway track. The failure of PNR, on the

provided for in the General Appropriations Act. Designed to

other hand, to put a cross bar, or signal light, flagman, or

meet the printing needs of the Government, it is primarily a

switchman or semaphores is evidence of negligence on their

service bureau and obviously, not engaged in business or

part.

occupation for pecuniary profit. Overtime work in the Bureau

By the doctrine of implied powers, the power to sue and be

of Printing is done only when the interest of the service so

sued is implicit from the faculty to transact private business.

requires. As a matter of administrative policy, the overtime

PNR is not exercising governmental powers, as such it is not

compensation may be paid, but such payment is

immune from suit.

discretionary with the head of the Bureau depending upon its

current appropriations, so that it cannot be the basis for

Bureau of Printing vs Bureau of Printing Employees

holding that the functions of said Bureau are wholly

Association

proprietary in character. The additional work it executes for

G.R. No. L-15751 January 28, 1961

private parties is merely incidental to its function, and

1 SCRA 340

although such work may be deemed proprietary in character,

there is no showing that the employees performing said
proprietary function are separate and distinct from those

Facts:
Upon complaint of the respondents of the Bureau

employed in its general governmental functions.

As an office of the Government, without any

of Printing Employees Association against the Bureau of

Printing, the complaint alleged that the latter have been

corporate or juridical personality, the Bureau of Printing

engaging in unfair labor practices by interfering with, or

cannot be sued. Any suit, action or proceeding against it, if it

coercing their employees, in the exercise of their right to self-

were to produce any effect, would actually be a suit, action

organization and discriminating in regard to hire and tenure

or proceeding against the Government itself, and the rule is

of their employment in order to discourage themfrom

settled that the Government cannot be sued without its

pursuing the union activities.

consent, much less over its objection.

The Petitioners of Bureau of Printing denied the

Farolan vs Court of Tax Appeals

charges of unfair labor practices attributed to and, by way of

G.R. No. 42204 January 21, 1993

affirmative defenses, alleged, among other things, that the

217 SCRA 298

respondents of the Bureau of Printing Employees

Association were suspending the pending result of an

Facts:

administrative investigation against them for breach of Civil

On January 30, 1972 at the Port of Manila, S/S

Service rules and regulations petition; that the Bureau of

Pacific Hawk vessel with Registry No. 170 arrived carrying

Printing has no juridical personality to sue and be sued; that

among others, 80 bales of screen net consigned to Baging

said bureau is not an industrial concern engaged for the

Buhay Trading (Baging Buhay). The import was classified

purpose of gain but is an agency of the Republic performing

under Tariff Heading no. 39.06-B of the Tariff and Customs

government functions. The petitioners filed an "Omnibus

Code at 35% ad valorem. Bagong Buhay paid the duties and

Motion" asking for a preliminary hearing on the question of

taxes due in the amount of P11,350.00 dated February 1,

jurisdiction raised by them in their answer and for

1972.

suspension of the trial of the case on the merits pending the

The Office of the Collector of Customs ordered a

determination of such jurisdical question.

re-examination of the shipment upon hearing the information

Issue:

that the shipment consisted of mosquito net made of nylon

Whether or not the Bureau of Printing, in the

under Tariff Heading No. 62.02 of the Tariff and Customs

proceeding in the action for unfair labor practice, lacks

Code. Upon re-examination, report shows that the shipment

jurisdiction thereof.

was undervalued in quantity, quality and of value. The

Held:

Collector of Customs determined the subject shipment is

The trial judge of the Industrial Court in an order

classifiable under Tariff Heading No. 51.04-B at 100% ad

dated January 27, 1959 sustained the jurisdiction of the

valorem and thus, forfeited the shipment in favor of the

court on the theory that the functions of the Bureau of

government.

Printing are "exclusively proprietary in nature,". The Bureau

of Printing is an office of the Government created by the

Private respondent filed a petition on August 20,

1976 for the release of the questioned goods which the

Court denied. On June 2, 1986, 64 bales out of the 80 bales

government function of such agency, such agency is not

were released to Bagong Buhay Trading after several

suable. If an agency performs a non-governmental function

motion. The sixteen remaining bales were missing. The

and is undertaken as an incident to its governmental

respondent claims that of the 143,454 yards released, only

function, there is no waiver thereby of the state immunity

116,950 yards were in good condition and the rest were not.

from suit extended to such government entity. The Bureau of

Thus, respondents demands that the Bureau of Customs be

Customs is part of the Department of Finance with no

ordered to pay for damages for the 43,050 yards it actually

personality of its own apart from that of the national

lost.

government. Its primary function is governmental, such as

Issue:

assessing and collecting lawful revenues from imported

Whether or not the Collector of Customs may be

articles and all other tariff and custom duties, fees, charges,

held liable for the 43,050 yards actually lost by the private

fines and penalties. To this function, arrastre service is a

respondent.

necessary incident.

Held:
Bureau of Customs cannot be held liable for actual

Department of Agriculture vs National Labor Relations

damages that the private respondent sustained with regard

Commission

to its goods. Otherwise, to permit private respondent's claim

G.R. No. 104269 November 11, 1993

to prosper would violate the doctrine of state immunity. Since

227 SCRA 693

it demands that the Commissioner of Customs should pay

for actual damages it sustained, the ultimately liability falls

Facts:

to the government, this case has been converted technically

into a suit against the state.
On this point, the political doctrine that state may

Department of Agriculture and Sultan Security

Agency entered into a contract for security services for the
government entity. September 13, 1990, several guards of

not be sued without its consent, applies. As an

the security agency filed a complaint for under payment of

unincorporated government agency without any separate

13th month pay, unifrom allowances, night shift differential

judicial personality of its own, the Bureau of Customs enjoys

pay, holiday pay and overtime pay, as well as for damages

immunity from suit. Along with the Bureau of Internal

before the Regional Arbitration Branch in Cagayan de Oro

Revenue, it is invested with an inherent power of

City. The Labor Arbiter found the Department of Agriculture

sovereignty, namely, taxation. As an agency, the Bureau of

jointly and liable with Sultan Agency for the payment of

Customs performs the governmental function of collecting

money claim of the guards.

revenues which is not a proprietary function. Thus private

Department of Agriculture filed a petition and

respondents claim for damages against the Commissioner of

mandamus, with prayer for preliminary injunction with the

Customs must fails.

National Labor Relations Commission Cagayan de Oro. It

argued that the writ of execution was effected without the

Mobil Philippines Exploration vs Customs Arrastre

Labor Arbiter having duly acquired jurisdiction over the said

Service

department. Hence, its decision was null and void.

G.R. No. L-23139 December 17,1966

18 SCRA 1120

National Labor Relations Commission dismissed

the petition. Thus provoked the Department of Agriculture to
charge National Labor Relations Commission for grave

Facts:

abuse of discretion for refusing to reject the writ of execution.

Sometime during the month of November 1962,

It argued that money claims against the department falls

four cases of rotary drill parts were shipped from abroad on

under the exclusive jurisdiction of the Commission on Audit.

S.S. ''Leoville'' consigned to Mobil Philippines Exploration,

Department of Agriculture asserts that National Labor

Inc., Manila. It was dishcarged to the custody of the Customs

Relations Commission has disregarded the cardinal rule on

Arrastre Service, the unit of the Bureau of Customs then

the non-suability of the state. National Labor Relations

handling arrastre operations. The Customs Arrastre Service

Commission, on the other hand, argue that the petitioner has

later delivered to the broker of the consignee three cases

impliedly waived its immunity from suit by concluding a

only. Petitioner then filed a suit in the Court of First Instance

service contract with Sultan Security Agency.

of Manila against the Customs to recover the value of

Issue:

undelivered case plus other damages thereof. The

Whether or not the Department of Agriculture can

respondents filed a motion to dismiss on the ground that not

be sued.

being persons under the law, they cannot be sued.

Held:

Issue:

Not all contracts entered into by the government

Whether or not the defendants can invoke state

operate as a waiver of its non-suability. Distinction must be

immunity.

made between one which is executed in the exercise of its

Held:

sovereign functions and another which is done in the

YES. If an agency's function is deemed

proprietary, if such is a necessary incident of the primary and

proprietary capacity. State gives consent upon financial

claims arising from a contract. Under Act No. 3038, a

general law, the State consents and submits to be sued

sovereignty, namely taxation. As an agency, the Bureau of

upon any money claim involving liability arising from

Customs performs the governmental function of collecting

contract, express or implied. However, the money claim

revenues which is defined not a proprietary function. Thus

must first be brought to the Commission on Audit.

private respondents claim for damages against the

Wherefore, the petition is granted.

Commissioner of Customs must fails.

Farolan vs CTA

Department of Agriculture vs. NLRC G.R. No. 104269,

Facts:

November 11, 1993

S/S Pacific Hawk vessel with Registry No. 170 arrived on

Sunday, January 25, 2009 Posted by Coffeeholic Writes

January 30, 1972 at the Port of Manila carrying among

Labels: Case Digests, Political Law

others, 80 bales of screen net consigned to Baging Buhay

Trading (Baging Buhay). The import was classified under

Facts: Petitioner Department of Agriculture (DA) and

Tariff Heading no. 39.06-B of the Tariff and Customs Code

Sultan Security Agency entered into a contract for security

at 35% ad valorem. Bagong Buhay paid the duties and taxes

services to be provided by the latter to the said

due in the amount of P11,350.00.

governmental entity. Pursuant to their arrangements, guards

were deployed by Sultan Security Agency in the

The Office of the Collector of Customs ordered a re-

various premisesof the DA. Thereafter, several guards filed a

examination of the shipment upon hearing the information

complaint for underpayment of wages, nonpayment of 13th

that the shipment consisted of mosquito net made of nylon

month pay, uniform allowances, night shift differential pay,

under Tariff Heading No. 62.02 of the Tariff and Customs

holiday pay, and overtime pay, as well as for damages

Code. Upon re-examination, it turns out that the shipment

against the DA and the security agency.

was undervalued in quantity and value as previously

declared. Thus the Collector of Customs forfeited the

The Labor Arbiter rendered a decision finding the DA jointly

shipment in favor of the government.

and severally liable with the security agency for the payment
of money claims of the complainant security guards. The DA

Private respondent filed a petition on August 20, 1976 for the

and the security agency did not appeal the decision. Thus,

release of the questioned goods which the Court denied. On

the decision became final and executory. The Labor Arbiter

June 2,1986, 64 bales out of the 80 bales were released to

issued a writ of execution to enforce and execute the

Bagong Buhay after several motion. The sixteen remaining

judgment against the property of the DA and the security

bales were missing. The respondent claims that of the

agency. Thereafter, the City Sheriff levied on execution the

143,454 yards released, only 116,950 yards were in good

motor vehicles of the DA.

condition and the rest were in bad condition. Thus,

Issue: Whether or not the doctrine of non-suability of the

respondents demands that the Bureau of Customs be

State applies in the case

ordered to pay for damages for the 43,050 yards it actually

lost.

Held: The basic postulate enshrined in the Constitution that

the State may not be sued without its consent reflects

Issue:

nothing less than a recognition of the sovereign character of

Whether or not the Collector of Customs may be held liable

the State and an express affirmation of the unwritten rule

for the 43,050 yards actually lost by the private respondent.

effectively insulating it from the jurisdiction of courts. It is

based on the very essence of sovereignty. A sovereign is

Held:

exempt from suit based on the logical and practical ground

Bureau of Customs cannot be held liable for actual damages

that there can be no legal right as against the authority that

that the private respondent sustained with regard to its

makes the law on which the right depends.

goods. Otherwise, to permit private respondent's claim to

prosper would violate the doctrine of sovereign immunity.

The rule is not really absolute for it does not say that the

Since it demands that the Commissioner of Customs be

State may not be sued under any circumstances. The State

ordered to pay for actual damages it sustained, for which

may at times be sued. The States consent may be given

ultimately liability will fall on the government, it is obvious

expressly or impliedly. Express consent may be made

that this case has been converted technically into a suit

through a general law or a special law. Implied consent, on

against the state.

the other hand, is conceded when the State itself

commences litigation, thus opening itself to a counterclaim,

On this point, the political doctrine that state may not be

or when it enters into a contract. In this situation, the

sued without its consent, categorically applies. As an

government is deemed to have descended to the level of the

unincorporated government agency without any separate

other contracting party and to have divested itself of its

judicial personality of its own, the Bureau of Customs enjoys

sovereign immunity.

immunity from suit. Along with the Bureau of Internal

Revenue, it is invested with an inherent power of

But not all contracts entered into by the government operate

as a waiver of its non-suability; distinction must still be made

Republic of the Philippines, unincorporated and not

between one which is executed in the exercise of its

possessing juridical personality under the law, is incapable

sovereign function and another which is done in its

of suing and being sued."

proprietary capacity. A State may be said to have descended

to the level of an individual and can this be deemed to have

ISSUE:

actually given its consent to be sued only when it enters into

1.

business contracts. It does notapply where the contract

relates to the exercise of its sovereign functions.

Whether or not government corporate agency may

be sued

2.

Whether or not the Civil Aeronautics

Administration can be sued

In the case, the DA has not pretended to have assumed a

HELD

capacity apart from its being a governmental entity when it

1.

As a general rule, state cannot be sued without its

entered into the questioned contract; nor that it could have,

consent and there can be no legal basis against

in fact, performed any act proprietary in character.

the authority that formulate the law and which the

law depends. But the exemptions are the

But, be that as it may, the claims of the complainant security

unincorporated type of government and

guards clearly constitute money claims. Act No. 3083 gives

functioning for proprietary. Not all government

the consent of the State to be sued upon any moneyed claim

entities, whether corporate or non-corporate, are

involving liability arising from contract, express or implied.

immune to suits. Immunity from suits is

Pursuant, however, to Commonwealth Act 327, as amended

determined by the character of the objects for

by PD 1145, the money claim must first be brought to the

which the entity was organized. however

Commission on Audit.

contended that when a sovereign state enters into

National Airports Corp vs Teodoro

a contract with a private person, the state can be

91 Phil 203

sued upon the theory that it has descended to the

level of an individual from which 'it can be implied
that it has given its consent to be sued under the

FACTS:

contract

The National Airports Corporation was organized under

Republic Act No. 224, which expressly made the provisions

2.

Among the general powers of the Civil Aeronautics

of the Corporation Law applicable to the said corporation.

Administration are, under section 3 of Executive

On November 10, 1950, the National Airports Corporation

Order No. 365, to execute contracts of any kind, to

was abolished by Executive Order No. 365 and to take its

purchase property, and to grant concession rights,

place the Civil Aeronautics Administration was created.

and under section 4, to charge landing fees,

Before the abolition, the Philippine Airlines, Inc. paid to the

royalties on sales to aircraft of aviation gasoline,

National Airports Corporation P65, 245 as fees for landing

accessories and supplies, and rentals for. the use

and parking on Bacolod Airport No. 2 for the period up to

of any property under its management. These

and including July 31, 1948. These fees are said to have

provisions confer upon 'the Civil Aeronautics

been due and payable to the Capitol Subdivision, Inc. which

Administration the power to sue and be sued,

owned the land used by the National Airports Corporation as

which is implied from the power to transact private

airport, and the owner commenced an action in the Court of

business. And if it has the power to sue and be

First Instance of Negros Occidental against the Philippine

sued on its behalf, the Civil Aeronautics

Airlines, Inc.

Administration with greater reason should have

In 1951 to recover the above amount, The Philippine

the power to prosecute and defend suits for and

Airlines, Inc. countered with a third-party complaint against

against the Mational Airports Corporation, having

the National Airports Corporation, which by that time had

acquired all the properties, funds and choses in

action and assumed all the liabilities of the latter.

been dissolved, and served summons on the Civil

Aeronautics Administration.

According to the court, the petition is denied with costs

The third party plaintiff alleged that it had paid to the National

against the Civil Aeronautics Administration.

Airports Corporation the fees claimed by the Capitol

Larkins vs NLRC

Subdivision, Inc. "on the belief and assumption that the third
party defendant was the lessee of the lands subject of the
complaint and that the third party defendant and its

Facts:

On August 12, 1988, private respondents filed a

predecessors in interest were the operators and maintainers

complaint with the Regional Arbitration Branch No.

of said Bacolod Airport No. 2

III of the NLRC, San Fernando, Pampanga for

The Solicitor General, after answering the third party

illegal dismissal and underpayment of wages.

complaint, filed a motion to dismiss on the ground that the

Charges were against petitionerT/Sgt Aldora

court lacks jurisdiction to entertain the third- party complaint,

Larkins who was a member of the United States

first, because the National Airports Corporation "has lost its

Air Force (USAF) assigned to oversee the

juridical personality," and, second, because agency of the

dormitories of the Third Aircraft Generation

Squadron (3 AGS) at Clark Air Base, Pampanga.,

therein only with the permission of the Base

Lt. Col. Frankhauster, and Joselito Cunanan,

Commander. If he withholds giving his permission,

the new contractor (JAC Maintenance Services)

he should instead designate another person to

employed for 3 AGS.

serve the process, and obtain the server's affidavit

Petitioner and Lt. Col. Frankhauser failed to

for filing with the appropriate court.Respondent

answer the complaint and to appear at the

Labor Arbiter did not follow said procedure. He

hearings. They, likewise, failed to submit their

instead, addressed the summons to Lt. Col.

position paper, which the Labor Arbiter deemed a

Frankhauser and not the Base Commander.

waiver on their part to do so. The case was

Respondents do not dispute petitioner's claim that

therefore submitted for decision on the basis of

no summons was ever issued and served on her.

private respondents' position paper and supporting

They contend, however, that they sent notices of

documentswhich therefore on November 21, 1988,

the hearings to her BUT as contended notices of

the Labor Arbiter rendered a decision granting all

hearing are not summonses. The provisions and

the claims of private respondents. He found both

prevailing jurisprudence in Civil Procedure may be

Lt. Col. Frankhauser and petitioner "guilty of

applied by analogy to NLRC proceedings (Revised

illegal dismissal" and ordered them to reinstate

Rules of the NLRC, Rule I, Sec. 3). It is basic that

private respondents with full back wages, or if that

the Labor Arbiter cannot acquire jurisdiction over

is no longer possible, to pay private respondents'

the person of the respondent without the latter

separation pay.

being served with summons (cf. Vda. de Macoy v.

Petitioner appealed to the NLRC claiming that the

Court of Appeals, 206 SCRA 244 [1992]; Filmerco

Labor Arbiter never acquired jurisdiction over her

Commercial Co., Inc. v. Intermediate Appellate

person because no summons or copies of the

Court, 149 SCRA 193 [1987]). In the absence of

complaints, both original and amended, were ever

service of summons or a valid waiver thereof, the

served on her. In her "Supplemental Memorandum

hearings and judgment rendered by the Labor

of Appeal," petitioner argued that the attempts to

Arbiter are null and void.

serve her with notices of hearing were not in

Petitioner, in the case at bench, appealed to the

accordance with the provisions of the R.P.U.S.

NLRC and participated in the oral argument before

Military Bases Agreement of 1947.

the said body. This, however, does not constitute

a waiver of the lack of summons and a voluntary

Issue:

submission of her person to the jurisdiction of the

Petitioner's contention that the questioned

Labor Arbiter. She may have raised in her

resolutions are null and void because respondent

pleadings grounds other than lack of jurisdiction,

Labor Arbiter did not acquire jurisdiction to

but these grounds were discussed in relation to

entertain and decide the case. Petitioner alleges

and as a result of the issue of the lack of

that she never received nor was served, any

jurisdiction. In effect, petitioner set forth only one

summons or copies of the original and amended

issue and that is the absence of jurisdiction over

complaints, and therefore the Labor Arbiter had no

her person. If an appearance before the NLRC is

jurisdiction over her person under Article XIV of

precisely to question the jurisdiction of the said

the R.P.U.S. Military Bases Agreement.

agency over the person of the defendant, then this

appearance is not equivalent to service of

For Reference:

summons (De los Santos v. Montera, 221 SCRA

R.P.U.S. Military Bases Agreement.

15 [1993]).

". . . [N]o process, civil or criminal, shall be served within any

Be that as it may, on the assumption that

base except with the permission of the commanding officer

petitioner validly waived service of summons on

of such base; but should the commanding officer refuse to

her, still the case could not prosper. There is no

grant such permission he shall forthwith take the necessary

allegation from the pleadings filed that Lt. Col.

steps . . . to serve such process, as the case may be, and to

Frankhauser and petitioner were being sued in

provide the attendance of the server of such process before

their personal capacities for tortious acts (United

the appropriate court in the Philippines or procure such

States of America v. Guinto, 182 SCRA 644

server to make the necessary affidavit or declaration to

[1990]). However, private respondents named 3

prove such service as the case may require."

AGS as one of the respondents in their complaint.

Ruling:

Indeed, assuming that jurisdiction was acquired

Labor Arbiter has no jurisdiction over the case as

over the United States Government and the

summonses and other processes issued by

monetary claims of private respondents proved,

Philippine courts and administrative agencies for

such awards will have to be satisfied not by Lt.

United States Armed Forces personnel within any

Col. Frankhauser and petitioner in their personal

U.S. base in the Philippines could be served

capacities, but by the United States government

further claim that the rule allowing suits against public

(Sandres v. Veridiano II, 162 SCRA 88 [1988]).

officers & employees for criminal & unauthorized acts is

applicable only in the Philippines & is not part of international

Shauf v. CA 191 SCRA 713

law.

SHAUF vs. COURT OF APPEALS

ISSUE:

Petition for certiorari to review the decision of CA

WON private respondents are immune from suit being

officers of the US Armed Forces

FACTS:

HELD:
Respondents ordered, jointly and severally, to pay

1990: Petitioner, Loida Shauf, a Filipino by origin and

petitioners the sum of P100K as moral damages, P20K for

married to an American who is a member of the US Air

attys fees.

Force, was rejected for a position of Guidance Counselor in

RATIO:

the Base Education Office at Clark Air Base. She boasts of

No, the respondents cannot rely on the US blanket of

related working experience and being a qualified dependent

diplomatic immunity for all its acts or the acts of its agents in

locally available.

the Phils. Private respondents are personally liable in

By reason of her non-selection, she filed a complaint for

indemnifying petitioner Shauf.

damages and an equal employment opportunity complaint

against private respondents, Don Detwiler (civillian

While the doctrine of immunity is also applicable to

personnel officer) and Anthony Persi (Education Director),

complaints filed against state officials, it only contemplates

for alleged discrimination by reason of her sex (female),

acts done in their official capacity. This does not cover acts

color (brown) and national origin (Filipino by birth).

contrary to law & injurious to the rights of the plaintiff. When

Shauf was offered a temporary position as a temporary

an official acts in a manner that invades or violates the

Assistant Education Adviser for a 180-day period with the

personal & property rights of another, the aggrieved party

condition that if a vacancy occurs, she will be automatically

may sue the official & such suit will not be a suit against the

selected to fill the vacancy. But if no vacancy occurs after

state. (Director of the Bureau of Telecommunications vs.

180 days, she will be released but will be selected to fill a

Aligaen) The doctrine of immunity from suit will not apply

future vacancy if shes available. Shauf accepted the offer.

where the public official is being sued in his private &

During that time, Mrs. Mary Abalateos was about to vacate

personal capacity as an ordinary citizen.

her position. But Mrs. Abalateos appointment was extended

thus, Shauf was never appointed to said position. She claims

The discrimination is very evident. Shauf was not considered

that the Abalateos stay was extended indefinitely to deny

for the position even if she was previously employed as a

her the appointment as retaliation for the complaint that she

Guidance Counselor at the Clark Airbase. She was not

filed against Persi. Persi denies this allegation. He claims it

granted an interview. The person appointed was not even

was a joint decision of the management & it was in

qualified for that position and that person kept the position

accordance of with the applicable regulation.

despite orders from the US Civil Service Commission for his

Shauf filed for damages and other relief in different venues

removal. Extension of Abalateos services is another proof.

such as the Civil Service Commission, Appeals Review

She was not appointed even if US officials found her highly

Board, Philippine Regional Trial Court, etc.

qualified for the position (letters from the Director of the US

RTC ruled in favor of Shauf ordering defendants to pay

Civil Service Commission, Staff Judge Advocate of the

$39,662.49 as actual damages + 20% of such amount as

Department of Air Force). Shauf has proven that

attorneys fees + P100k as moral & exemplary damages.

discrimination did occur whereas respondents merely denied

Both parties appealed to the CA. Shauf prayed for the

allegations.

increase of the damages to be collected from defendants.

Defendants on the other hand, continued using the defense

The US Constitution assures everyone of equality in

that they are immune from suit for acts done/statements

employment & work opportunities regardless of sex, race, or

made by them in performance of their official governmental

creed. The Philippine Constitution has a similar provision.

functions pursuant to RP-US Military Bases Agreement of

Persi & Detwiler violated Shaufs constitutional right to earn

1947. They claim that the Philippines does not have

a living, an integral aspect of her right to life. Thus, they

jurisdiction over the case because it was under the exclusive

should be accountable. Though Shauf is entitled to

jurisdiction of a US District Court. They likewise claim that

damages, she should not be paid for the supposedly

petitioner failed to exhaust all administrative remedies thus

unearned income had she been hired as a Guidance

case should be dismissed. CA reversed RTC decision.

Counselor. She never acquired rights over that amount

According to the CA, defendants are immune from suit.

because she was never appointed.

Shauf claims that the respondents are being sued in their

private capacity thus this is not a suit against the US

Shauf followed the proper procedure in seeking relief for the

government w/c would require consent.

defendants discriminatory acts. The Department of Air Force

Respondents still maintain their immunity from suit. They

in Washington told her that one of her appeal rights would be

to file a civil action if a final decision has not been rendered

the public official concerned will require the state

after 180 days from the dated of the initial appeal to the

itself to perform a positive act.

Commission. The appeal was lodged on Sept. 30, 1978 and

Lansang was sued not in his capacity as

it has not been decided up to the time SC has decided.

NPDC Chairman but in his personal

Shauf is entitled to choose the remedy, not otherwise

capacity. It is evident from the complaint

prohibited, which will best advance & protect her interests.

that Lansang was sued allegedly for

Lansang vs. Court of Appeals (Consti1)

having personal motives in ordering the

February 23, 2000

ejectment of GABI from Rizal Park.

Facts:

Private respondent General Assembly of the Blind

(GABI) were allegedly awarded a verbal 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.

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 demanded
that they vacate the area.

The notice was signed by the president of GABI,

private respondent Jose Iglesias, allegedly to
indicate his conformity to its contents but later on
claimed that he was deceived into signing the
notice.

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.

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.

Issues:

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.

Whether or not petitioner Lansang abused his

authority in ordering the ejectment of private
respondents from Rizal Park.

Held:

No, the complaint is not a suit against the state.

No, Lansang did not abuse his authority.

Ratio:

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

There was no evidence of abuse of authority.