Republic of the Philippines

SUPREME COURT
Manila

practice their profession in this jurisdiction. The respondent Robert Orr

Ferguson was granted certificate No. 713-W on January 14, 1939 pursuant
to resolution No. 24 of the Board of Accountancy, series of 1938.

EN BANC
G.R. No. L-2529

Subsequently, the Board of Accountancy, upon the examination of the case

of those British accountants without examination, came to the conclusion
that , there being no law which regulates the practice of accountancy in
England, and that the practice of accountancy in England, and that the
practice of accountancy in said country being limited only to the members of
incorporated private accountant's societies, the certificates issued by the
Institutes of chartered accountants and other similar societies in England
and Wales cannot be considered on a par with the public accountant's
certificates issued by the Philippine Board of Accountancy, which is
government entity. In view thereof, the respondent Board of Accountancy
"resolved to suspend, . . . the validity of the C.P.A. certificates of the abovementioned candidates pending the final revocation thereof should they fail to
prove to the satisfaction of the Board within sixty days' notice that : (a)
Filipinos are allowed to take the professional accountant examination given
by the British government, if any, and (b) Filipino certified public accountants
can, upon application, be registered as chartered accountants or granted
similar degrees by the British Government." (Annex B.)lawphi1.net

December 31, 1949

J. A. SISON, petitioner,
vs.
THE BOARD OF ACCOUNTANCY and ROBERT ORR
FERGUZON, respondents.
Quijano, Rosete and Tizon for petitioner.
Perkins, Ponce Enrile, Contreras and Gomez for respondent.
Claro M. Recto as amicus curiae.

TORRES, J.:
In his petition for certiorari against the Board of Accountancy and Robert Orr
Ferguson, J. A. Sison prays that this Court render judgment "ordering the
respondent Board of Accountancy to revoke the certificate issued to Robert
Orr Ferguson, a British subject admitted without examination because there
does not exist any reciprocity between the Philippines and the United
Kingdom regarding the practice of accountancy."

Such action of the Board of Accountancy was based on an opinion rendered

by the Secretary of Justice, on October 1, 1946 (Annex A), to the Chartered
Accountants in England and Wales does not meet the requirement of section
41 of Rule 123 of the Rules of Court and that the negative statement therein,
as quoted above, does not establish the existence of reciprocity, which
induced the board to hold that the registration, without examination, of those
British subjects as certified public accountants, is in accordance with the
provision of section 122 of Act No. 3105 as amended by Commonwealth Act
No. 342.

Upon perusal of the pleadings and for a clear understanding of the issue
raised by petitioner the following facts, which we believe are not disputed,
shall be stated:

However, the Secretary of justice, answering a query from the Secretary of

Finance, in an opinion rendered on February 10, 1947 "on the legality of the
suspension or revocation " of the certificates issued to those British subjects
as contemplated in resolution No. 5, series of 1946 of the Board of
Accountancy, was of the opinion that "the board may not suspend or revoke
the certificates previously granted to the ten British accountants herein

Pursuant to the provisions of Act No. 342, several persons, British subjects,
and the possessors of certificates as chartered accountants issued by
various incorporated private accountant's societies in England and other
parts of the British Empire, were, without examination, granted by the
respondents Board of Accountancy, certificates as public accountants to

involved, including respondent Robert Orr Ferguson, because such action is

in contravention of section 13 of Act No. 3105 as amended which explicitly
provides that the suspension or revocation of the certificate issued under the
said Act may be done by the board for unprofessional conduct of the holder
or other sufficient cause. The Secretary of Justice further said that he
believes that "the change in administrative interpretation with respect to the
existence of reciprocity between the Philippines and Great Britain as to the
practice of accountancy," does not constitute sufficient cause for the
suspension or revocation of the certificates in question within the meaning of
said provision. The opinion of the Secretary of Justice further said that if
those certificates were issued to those British persons on the assumption
that there is "reciprocity between Great Britain and the Philippines as to the
practice of certified public accountancy in the Philippines" a change of
administrative interpretation is not favored (42 Am. Jur., 412).While in the
instant case the public policy with respect to the practice of foreign
accountants in this country remains unchanged, the action intended by the
Board of Accountancy, to suspend or revoke the certificates already issued
to such persons must be based on some other grounds, such ignorance,
incapacity, deception or fraud on the part of the holder of the certificates.

nationality, shall be entitled to registration as certified public

accountant and to receive a certificate of registration as such
certified public accountant from the Board, Provided such country
or state does not restrict the right of the Filipino certified public
accountants to practice therein or grants reciprocal rights to Filipino
certified public accountants to practice therein or grants reciprocal
rights to Filipinos, and provided that the application for their
registration shall be filed with the Board not later than December
31,1938.
From the text of the above-quoted section 12 of the Accountancy Law, it is
inferred that the registration as certified public accountant and the issuance
of the corresponding certificate as such certified public accountant, to a
person who for five years has been engaged in professional accountancy
work in the Philippines and is a holder of a certificate as certified public
accountant, or as a chartered accountant, or other similar degrees in the
country of his origin, is predicated on the fact that the country of origin of
such foreign applicant (a) "does not restrict the right of the Filipino certified
public accountant to practice therein," (b) "grants reciprocal rights to the
Filipinos," and (c) the application for registration "be filed with the Board not
later than December 31, 1938."

In the light of the above, the petitioner brought this action mainly on the
ground that there is no reciprocity "between the Philippines and the United
Kingdom" as regards the practice of the profession of certified public
accountant, because the certificate submitted by the respondent. Robert Orr
Ferguson "is not a public or financial record, and does not meet the
requirements of section 41, rule 21 [123] of the Rules of the Court." And that
the furthermore, the negative statement that "there is nothing in the laws of
the United Kingdom to restrict the right of the Filipino certified public
accountant to practice as professional accountant therein, " does not
established the existence of reciprocity.

In the case at bar, while the profession of certified public accountant is not
controlled or regulated by the Government of Great Britain, the country of
origin of respondent Robert Orr Ferguson, according to the record, said
respondent had been admitted in this country to the practice of his
profession as certified public accountant on the strength of his membership
of the Institute of Accountants and Actuaries in Glasgow (England),
incorporated by the Royal Charter of 1855. The question of his entitlement to
admission to the practice of his profession in this jurisdiction, does not ,
therefore, come under reciprocity, as this principle is known in International
Law, but it is included in the meaning of comity, as expressed in the
alternative condition of the proviso of the above-quoted section 12 which
says: such country or state does not restrict the right of Filipino certified
public accountants to practice therein.

Section 12 of Act No. 3105, as amended, reads:

Section 12. Any person who has been engaged in the professional
accountancy work in the Philippine Islands for a period of five years
or more prior to the date of his application, and who holds
certificates as certified public accountant, or as chartered
accountant, or other similar certificates or degrees in the country of

Mutuality, reciprocity, and comity as bases or elements.

International Law is founded largely upon mutuality, reciprocity, and

the principle of comity of nations. Comity, in this connection, is

neither a matter of absolute obligation on the one hand, nor of mere
courtesy and good will on the other; it is the recognition which one
nation allows within its territory to the acts of foreign governments
and tribunals, having due regard both to the international duty and
convenience and the rights of its own citizens or of other persons
who are under the protection of its laws. The fact of reciprocity does
not necessarily influence the application of the doctrine of comity,
although it may do so and has been given consideration in some
instances. (30 Am. Jur., 178; Hilton vs. Guyot, 159 U. S., 113, 40
Law. ed., 95; 16 S. Ct., 139.)

of the Philippines in his capacity as Head of the Department of Foreign

Affairs, said:
. . . there is no governmental control of the accounting profession in
the United Kingdom and any resident of the United Kingdom, of
whatever nationality, may engage in the profession of accounting
without formality; and . . . that the high standards of the accounting
profession in the United Kingdom are maintained by a number of
private societies whose membership is restricted to persons who
have passed a different professional examination but impose no
restriction whatsoever on membership with respect of nationality.
(Night of November 5, 1946.)

In Hilton vs. Guyot (supra), the highest court of the United States said that
comity "is the recognition which one nation allows within its territory to the
legislative, executive, or judicial acts of another nation, having due regard
both to International duty and convenience, and to the rights of its own
citizens or of other persons who are under the protection of its laws. " Again,
in Bank of Augusta vs. Earle, 38 U.S., 13 Pet. 519, 589, Chief Justice Taney,
speaking for the court while Mr. Justice Story well-known author of the
treatise on Conflict of Laws was a member of it, and largely adopting his
words, said:

Again , the British Minister, in his note of April 15, 1947, further said:
Your Excellency will recall that doubt had been expressed by the
Philippine authorities concerned as to whether qualified public
accountants would be allowed to practice income tax accounting in
the United Kingdom. Accordingly, I requested a ruling on this point,
and I am happy to inform Your Excellency that I have been
authorized by His Majesty Principal Secretary of State for Foreign
Affairs to state, for the information of the Government of the
Philippines, that qualified Philippine citizen are allowed to practice
the profession of accountancy including income tax accounting, in
the United Kingdom.

. . . It is needless to enumerate here the instances in which by the

general practice of civilized countries, the laws of the one will, by
the comity of nations, be recognized and executed in another,
where the rights of individuals are concerned . . . The comity thus
extended to other nations is no impeachment of sovereignty. It is
the voluntary act of the nation by which it is offered, and is
inadmissible when contrary to its policy, or prejudicial to its interest.
But it contributes so largely to promote justice between individuals,
and to produce a friendly intercourse between the sovereignties to
which they belong, that courts, but the comity of the nation, which is
administered and ascertained in the same way, and guided by the
same reasoning, by which all other principles of municipal law are
ascertained and guided.

We are bound to take notice of the fact that fact that the Philippine and the
United Kingdom, are bound by a treaty of friendship and commerce, and
each nation is represented in the other by corresponding diplomatic envoy.
There is no reason whatsoever to doubt the statement and assurance made
by the diplomatic representative of the British Government in the Philippines,
regarding the practice of the accountancy profession in the United Kingdom
and the fact that Filipino certified public accountant will be admitted to
practice their profession in the United Kingdom should they choose to do so.
Under such circumstances, and without necessarily construing that such
attitude of the British Government in the premises, as represented by the

The record shows that the British Minister accredited to the Philippine
Republic in two notes concerning this question, addressed to the President

British Minister, amounts to reciprocity, we may at least state that it comes

within the realm of comity, as contemplated in our law.

IN RE: PETITION OF ARTURO EFREN GARCIA for admission to the

Philippine Bar without taking the examination. ARTURO EFREN
GARCIA, petitioner.

It appearing that the record fails to show that the suspension of this
respondent is . . . based on any of the cause provided by the Accountancy
Law, we find no reason why Robert Orr Ferguson, who had previously been
registered as certified public accountants and issued the corresponding
certificate public accountant in the Philippine Islands, should be suspended
from the practice of his profession in these Islands. The petition is denied,
with cost.

RESOLUTION
BARRERA, J.:
Arturo E. Garcia has applied for admission to the practice of law in the
Philippines without submitting to the required bar examinations. In his
verified petition, he avers, among others, that he is a Filipino citizen born in
Bacolor City, Province of Negros Occidental, of Filipino parentage; that he
had taken and finished in Spain, the course of "Bachillerato Superior"; that
he was approved, selected and qualified by the "Instituto de Cervantes" for
admission to the Central University of Madrid where he studied and finished
the law course graduating there as "Licenciado En Derecho"; that thereafter
he was allowed to practice the law profession in Spain; and that under the
provision of the Treaty of Academic Degrees and the Exercise of Professions
between the Republic of the Philippines and the Spanish state, he is entitled
to practice the law profession in the Philippines without submitting to the
required bar examinations.

Moran, C.J., Paras, Pablo, Bengzon, Padilla, Tuason, Montemayor and

Reyes, JJ., concur.

After due consideration, the Court resolved to deny the petition on the
following grounds:
(1) the provisions of the Treaty on Academic Degrees and the Exercise of
Professions between the Republic of the Philippines and the Spanish State
can not be invoked by applicant. Under Article 11 thereof;
Republic of the Philippines
SUPREME COURT
Manila

The Nationals of each of the two countries who shall have obtained
recognition of the validity of their academic degrees by virtue of the
stipulations of this Treaty, can practice their professions within the
territory of the Other, . . .. (Emphasis supplied).

EN BANC

from which it could clearly be discerned that said Treaty was intended to
govern Filipino citizens desiring to practice their profession in Spain, and the
citizens of Spain desiring to practice their professions in the Philippines.
Applicant is a Filipino citizen desiring to practice the legal profession in the

August 15, 1961

Philippines. He is therefore subject to the laws of his own country and is not
entitled to the privileges extended to Spanish nationals desiring to practice in
the Philippines.

Republic of the Philippines

SUPREME COURT
Manila

(2) Article I of the Treaty, in its pertinent part, provides .

EN BANC

The nationals of both countries who shall have obtained degree or

diplomas to practice the liberal professions in either of the
Contracting States, issued by competent national authorities, shall
be deemed competent to exercise said professions in the territory
of the Other, subject to the laws and regulations of the latter. . . ..

G.R. No. L-24170

December 16, 1968

ILLUH ASAALI, HATIB ABDURASID, INGKOH BANTALA, BASOK INGKIN,

and MOHAMMAD BANTALLA,petitioners,
vs.
THE COMMISSIONER OF CUSTOMS, respondent.

It is clear, therefore, that the privileges provided in the Treaty invoked by the
applicant are made expressly subject to the laws and regulations of the
contracting State in whose territory it is desired to exercise the legal
profession; and Section 1 of Rule 127, in connection with Sections 2,9, and
16 thereof, which have the force of law, require that before anyone can
practice the legal profession in the Philippine he must first successfully pass
the required bar examinations; and

FERNANDO, J.:
The policy relentlessly adhered to and unhesitatingly pursued to minimize, if
not to do away entirely, with the evil and corruption that smuggling brings in
its wake would be frustrated and set at naught if the action taken by
respondent Commissioner of Customs in this case, as affirmed by the Court
of Tax Appeals, were to be set aside and this appeal from the decision of the
latter were to succeed. Fortunately, the controlling principles of law do not
call for a contrary conclusion. It cannot be otherwise if the legitimate
authority vested in the government were not to be reduced to futility and
impotence in the face of an admittedly serious malady, that at times has
assumed epidemic proportions.

(3) The aforementioned Treaty, concluded between the Republic of the

Philippines and the Spanish State could not have been intended to modify
the laws and regulations governing admission to the practice of law in the
Philippines, for the reason that the Executive Department may not encroach
upon the constitutional prerogative of the Supreme Court to promulgate rules
for admission to the practice of law in the Philippines, the lower to repeal,
alter or supplement such rules being reserved only to the Congress of the
Philippines. (See Sec. 13, Art VIII, Phil. Constitution).

The principal question raised by petitioners, owners of five sailing vessels

and the cargo loaded therein declared forfeited by respondent
Commissioner of Customs for smuggling, is the validity of their interception
and seizure by customs officials on the high seas, the contention being
raised that importation had not yet begun and that the seizure was effected
outside our territorial waters..

Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Paredes, Dizon, De Leon

and Natividad, JJ., concur.
Bautista Angelo, J., on leave, took no part.
Concepcion, J., took no part.

Why such a plea could not be given the least credence without doing
violence to common sense and placing the law in disrepute would be
apparent from a statement of the case and the findings of facts as set forth
in the decision now under review, of the Court of Tax Appeals, dated

November 19, 1964, the opinion being penned by the late Associate Judge
Augusto M. Luciano.

justify their stand thus: "In the light of the fact that the vessels involved with
the articles laden therein were apprehended and seized on the high seas,
beyond the territorial waters of the Philippines, the said vessels could not
have touched any place or port in the Philippines, whether a port or place of
entry or not, consequently, the said vessels could not have been engaged in
the importation of the articles laden therein into any Philippine port or place,
whether a port or place of entry or not, to have incurred the liability of
forfeiture under Section 1363(a) of the Revised Administrative Code."3

His opinion starts thus: "This is an appeal from the decision of the Acting
Commissioner of Customs in Customs Case No. 113, dated September 26,
1961, (Jolo Seizure Identification Cases Nos. 38, 39, 40, 41 & 42) decreeing
the forfeiture of five (5) sailing vessels (kumpits) named 'Iroc-Iroc,' 'Lahatlahat,' 'Liberal Wing III,' 'Sulu Area Command,' and 'Business,' with their
respective cargoes of blue seal cigarettes and rattan chairs for violation of
Section 1363(a) of the Revised Administrative Code and Section 20 of
Republic Act No. 426 in relation with Section 1363(f) of the Revised
Administrative Code."1

Such a contention was advanced by petitioners before the Court of Tax

Appeals. It met the repudiation that it deserved. Thus: "We perfectly see the
point of the petitioners but considering the circumstances surrounding the
apprehension of the vessels in question, we believe that Section 1363(a) of
the Revised Administrative Code should be applied to the case at bar. It has
been established that the five vessels came from Sandakan, British North
Borneo, a foreign port, and when intercepted, all of them were heading
towards Tawi-tawi, a domestic port within the Sulu sea. Laden with foreign
manufactured cigarettes, they did not possess the import license required by
Republic Act No. 426, nor did they carry a permit from the Commissioner of
Customs to engage in importation into any port in the Sulu sea. Their course
announced loudly their intention not merely to skirt along the territorial
boundary of the Philippines but to come within our limits and land
somewhere in Tawi-tawi towards which their prows were pointed. As a
matter of fact, they were about to cross our aquatic boundary but for the
intervention of a customs patrol which, from all appearances, was more than
eager to accomplish its mission."4

The facts according to the above opinion "are not controverted." Thus: "It
appears that on September 10, 1950, at about noon time, a customs patrol
team on board Patrol Boat ST-23 intercepted the five (5) sailing vessels in
question on the high seas, between British North Borneo and Sulu while they
were heading towards Tawi-tawi, Sulu. After ordering the vessels to stop, the
customs officers boarded and found on board, 181 cases of 'Herald'
cigarettes, 9 cases of 'Camel' cigarettes, and some pieces of rattan chairs.
The sailing vessels are all of Philippine registry, owned and manned by
Filipino residents of Sulu, and of less than thirty (30) tons burden. They
came from Sandakan, British North Borneo, but did not possess any permit
from the Commissioner of Customs to engage in the importation of
merchandise into any port of the Sulu sea, as required by Section 1363(a) of
the Revised Administrative Code. Their cargoes were not covered by the
required import license under Republic Act No. 426, otherwise known as the
Import Control Law."2

The sense of realism and the vigorous language employed by the late Judge
Luciano in rejecting such a plea deserve to be quoted. Thus: "To entertain
even for a moment the thought that these vessels were probably not bound
for a Philippine port would be too much a concession even for a simpleton or
a perennial optimist. It is quite irrational for Filipino sailors manning five
Philippine vessels to sneak out of the Philippines and go to British North
Borneo, and come a long way back laden with highly taxable goods only to
turn about upon reaching the brink of our territorial waters and head for
another foreign port."5

Respondent Commissioner of Customs, as noted at the outset, affirmed the

decision rendered by the Collector of Customs of Jolo, who found cause for
forfeiture under the law of the vessels and the cargo contained therein. He
was, as also already made known, sustained by the Court of Tax Appeals.
Hence this petition for review.
The first two errors assigned by petitioners would impugn the jurisdiction of
the Bureau of Customs to institute seizure proceedings and thereafter to
declare the forfeiture of the vessels in question and their cargo. They would

1. We find no plausible reason not to accept in its entirety such a conclusion

reached by the Court of Tax Appeals. Nor, even if the persuasive element in
the above view were not so overwhelming, could we alter the decisive facts
as found by it. For it is now beyond question that its finding, if supported by
substantial evidence, binds us, only questions of law being for us to resolve.
Where the issue raised belongs to the former category, we lack the power of
review.6

outside of its jurisdiction against those committing offense while on a

Philippine ship ...8 The principle of law that sustains the validity of such a
provision equally supplies a firm foundation for the seizure of the five sailing
vessels found thereafter to have violated the applicable provisions of the
Revised Administrative Code.9
Moreover, it is a well settled doctrine of International Law that goes back to
Chief Justice Marshall's opinion in Church v. Hubbart,10 an 1804 decision,
that a state has the right to protect itself and its revenues, a right not limited
to its own territory but extending to the high seas. In the language of Chief
Justice Marshall: "The authority of a nation within its own territory is absolute
and exclusive. The seizure of a vessel within the range of its cannon by a
foreign force is an invasion of that territory, and is a hostile act which it is its
duty to repel. But its power to secure itself from injury may certainly be
exercised beyond the limits of its territory."

Moreover, for understandable reasons, we feel extreme reluctance to

substitute our own discretion for that of the Court of Tax Appeals in its
appreciation of the relevant facts and its appraisal of their significance. As
we had occasion to state in a relatively recent decision: "Nor as a matter of
principle is it advisable for this Court to set aside the conclusion reached by
an agency such as the Court of Tax Appeals which is, by the very nature of
its function, dedicated exclusively to the study and consideration of tax
problems and has necessarily developed an expertise on the subject, ...,
there has been an abuse or improvident exercise of its authority."7

The question asked in the brief of petitioners-appellants as to whether the

seizure of the vessels in question and the cargoes on the high seas and thus
beyond the territorial waters of the Philippines was legal must be answered
in the affirmative.

2. We thus could rest our decision affirming that of the Court of Tax Appeals
on the above consideration.
It might not be amiss however to devote some degree of attention to the
legal points raised in the above two assignment of errors, discussed jointly
by petitioners-appellants, alleging the absence of jurisdiction, the deprivation
of property without due process of law and the abatement of liability
consequent upon the repeal of Republic Act No. 426. Not one of the
principles of law relied upon suffices to call for reversal of the action taken by
the respondent Commissioner of Customs, even if the facts presented a
situation less conclusive against the pretension of petitioners-appellants.

4. The next question raised is the alleged denial of due process arising from
such forfeiture and seizure. The argument on the alleged lack of validity of
the action taken by the Commissioner of Customs is made to rest on the fact
that the alleged offense imputed to petitioners-appellants is a violation of
Section 1363(a) and not Section 1363(f). The title of Section 1363 is clear,
"Property subject to forfeiture under customs laws." The first subsection
thereof, (a) cover any vessel including cargo unlawfully engaged in the
importation of merchandise except a port of entry. Subsection (f) speaks of
any merchandise of any prohibited importation, the importation of which is
effected or attempted contrary to law and all other merchandise which in the
opinion of the Collector of Customs have been used are or were intended to
be used as instrument in the importation or exportation of the former.

From the apprehension and seizure of the vessels in question on the high
seas beyond the territorial waters of the Philippines, the absence of
jurisdiction of Commissioner of Customs is predicated. Such contention of
petitioners-appellants is without merit.

From the above recital of the legal provisions relied upon, it would appear
most clearly that the due process question raised is insubstantial. Certainly,
the facts on which the seizure was based were not unknown to petitionersappellants. On those facts the liability of the vessels and merchandise under

It is unquestioned that all vessels seized are of Philippine registry. The

Revised Penal Code leaves no doubt as to its applicability and enforceability
not only within the Philippines, its interior waters and maritime zone, but also

the above terms of the statute would appear to be undeniable. The action
taken then by the Commissioner of Customs was in accordance with law.

ordered by the Collector of Customs illegal or null and void; in other words it
could not have the effect of annulling or setting aside the decision of the
Collector of Customs which was rendered while the law was in force and
which should stand until it is revoked by the appellate tribunal."

How could there be a denial of due process? There was nothing arbitrary
about the manner in which such seizure and forfeiture were effected. The
right to a hearing of petitioners-appellants was respected. They could not
have been unaware of what they were doing. It would be an affront to reason
if under the above circumstances they could be allowed to raise in all
seriousness a due process question. Such a constitutional guaranty, basic
and fundamental, certainly should not be allowed to lend itself as an
instrument for escaping a liability arising from one's own nefarious acts.

As late as 1965, in Bombay Dept. Store v. Commissioner of Customs,13 we

had occasion to reaffirm the doctrine in the above two decisions, the present
Chief Justice, speaking for the Court, stating that such expiration of the
period of effectivity of Republic Act No. 650 "did not have the effect of
depriving the Commissioner of Customs of the jurisdiction, acquired by him
prior thereto, to act on cases of forfeiture pending before him, which are in
the nature of proceeding in rem...."

5. Petitioners-appellants would further assail the validity of the action taken

by the respondent Commissioner of Customs by the plea that the repeal of
Republic Act No. 426 abated whatever liability could have been incurred
thereunder. This argument raised before the Court of Tax Appeals was
correctly held devoid of any persuasive force. The decision under review
cited our opinion in Golay-Buchel & Cie v. Commissioner of Customs11 to the
effect that the expiration of the Import Control Law "did not produce the
effect of declaring legal the importation of goods which were illegally
imported and the seizure and forfeiture thereof as ordered by the Collector of
Customs illegal or null and void."

It is thus most evident that the Court of Tax Appeals had not in any wise
refused to adhere faithfully to controlling legal principles when it sustained
the action taken by respondent Commissioner of Customs. It would be a
reproach and a reflection on the law if on the facts as they had been shown
to exist, the seizure and forfeiture of the vessels and cargo in question were
to be characterized as outside the legal competence of our government and
violative of the constitutional rights of petitioners-appellants. Fortunately, as
had been made clear above, that would be an undeserved reflection and an
unwarranted reproach. The vigor of the war against smuggling must not be
hampered by a misreading of international law concepts and a misplaced
reliance on a constitutional guaranty that has not in any wise been infringed.

Roxas v. Sayoc 12 announced that principle earlier. Thus: "Herein, we are

concerned with the effect of the expiration of a law, not with the abrogation of
a law, and we hold the view that once the Commissioner of Customs has
acquired jurisdiction over the case, the mere expiration of Republic Act No.
650 will not divest him of his jurisdiction thereon duly acquired while said law
was still in force. In other words, we believe that despite the expiration of
Republic Act No. 650 the Commissioner of Customs retained his jurisdiction
over the case and could continue to take cognizance thereof until its final
determination, for the main question brought in by the appeal from the
decision of the Collector of Customs was the legality or illegality of the
decision of the Collector of Customs, and that question could not have been
abated by the mere expiration of Republic Act No. 650. We firmly believe
that the expiration of Republic Act No. 650 could not have produced the
effect (1) of declaring legal the importation of the cotton counterpanes which
were illegally imported, and (2) of declaring the seizure and forfeiture

WHEREFORE, the decision of respondent Court of Tax Appeals of

November 19, 1964, is affirmed. With costs against petitioners-appellants.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro and Capistrano, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

dutiable goods" beyond the official needs of said petitioner "and the only
lawful way to reach these articles and effects for purposes of taxation is
through a search warrant." 1

G.R. No. L-35131 November 29, 1972

The Court thereafter called for the parties' memoranda in lieu of oral
argument, which were filed on August 3, 1972 by respondents and on
August 21, 1972 by petitioners, and the case was thereafter deemed
submitted for decision.

THE WORLD HEALTH ORGANIZATION and DR. LEONCE

VERSTUYFT, petitioners,
vs.
HON. BENJAMIN H. AQUINO, as Presiding Judge of Branch VIII, Court of
First Instance of Rizal, MAJOR WILFREDO CRUZ, MAJOR ANTONIO G.
RELLEVE, and CAPTAIN PEDRO S. NAVARRO of the Constabulary
Offshore Action Center (COSAC), respondents.

It is undisputed in the record that petitioner Dr. Leonce Verstuyft, who was
assigned on December 6, 1971 by the WHO from his last station in Taipei to
the Regional Office in Manila as Acting Assistant Director of Health Services,
is entitled to diplomatic immunity, pursuant to the Host Agreement executed
on July 22, 1951 between the Philippine Government and the World Health
Organization.

Sycip, Salazar, Luna, Manalo and Feliciano for petitioners.

Emilio L. Baldia for respondents.

Such diplomatic immunity carries with it, among other diplomatic privileges
and immunities, personal inviolability, inviolability of the official's properties,
exemption from local jurisdiction, and exemption from taxation and customs
duties.

TEEHANKEE, J.:p
An original action for certiorari and prohibition to set aside respondent
judge's refusal to quash a search warrant issued by him at the instance of
respondents COSAC (Constabulary Offshore Action Center) officers for the
search and seizure of the personal effects of petitioner official of the WHO
(World Health Organization) notwithstanding his being entitled to diplomatic
immunity, as duly recognized by the executive branch of the Philippine
Government and to prohibit respondent judge from further proceedings in
the matter.

When petitioner Verstuyft's personal effects contained in twelve (12) crates

entered the Philippines as unaccompanied baggage on January 10, 1972,
they were accordingly allowed free entry from duties and taxes. The crates
were directly stored at the Eternit Corporation's warehouse at Mandaluyong,
Rizal, "pending his relocation into permanent quarters upon the offer of Mr.
Berg, Vice President of Eternit who was once a patient of Dr. Verstuyft in the
Congo." 2
Nevertheless, as above stated, respondent judge issued on March 3, 1972
upon application on the same date of respondents COSAC officers search
warrant No. 72-138 for alleged violation of Republic Act 4712 amending
section 3601 of the Tariff and Customs Code 3 directing the search and
seizure of the dutiable items in said crates.

Upon filing of the petition, the Court issued on June 6, 1972 a restraining
order enjoining respondents from executing the search warrant in question.
Respondents COSAC officers filed their answer joining issue against
petitioners and seeking to justify their act of applying for and securing from
respondent judge the warrant for the search and seizure of ten crates
consigned to petitioner Verstuyft and stored at the Eternit Corporation
warehouse on the ground that they "contain large quantities of highly

Upon protest of March 6, 1972 of Dr. Francisco Dy, WHO Regional Director
for the Western Pacific with station in Manila, Secretary of Foreign Affairs
Carlos P. Romulo, personally wired on the same date respondent Judge

advising that "Dr. Verstuyft is entitled to immunity from search in respect of

his personal baggage as accorded to members of diplomatic missions"
pursuant to the Host Agreement and requesting suspension of the search
warrant order "pending clarification of the matter from the ASAC."

1. The executive branch of the Philippine Government

has expressly recognized that petitioner Verstuyft is entitled to diplomatic
immunity, pursuant to the provisions of the Host Agreement. The Department
of Foreign Affairs formally advised respondent judge of the Philippine
Government's official position that accordingly "Dr. Verstuyft cannot be the
subject of a Philippine court summons without violating an obligation in
international law of the Philippine Government" and asked for the quashal of
the search warrant, since his personal effects and baggages after having
been allowed free entry from all customs duties and taxes, may not be
baselessly claimed to have been "unlawfully imported" in violation of the
tariff and customs code as claimed by respondents COSAC officers. The
Solicitor-General, as principal law officer of the Government, 7 likewise
expressly affirmed said petitioner's right to diplomatic immunity and asked
for the quashal of the search warrant.

Respondent judge set the Foreign Secretary's request for hearing and heard
the same on March 16, 1972, but notwithstanding the official plea of
diplomatic immunity interposed by a duly authorized representative of the
Department of Foreign Affairs who furnished the respondent judge with a list
of the articles brought in by petitioner Verstuyft, respondent judge issued his
order of the same date maintaining the effectivity of the search warrant
issued by him, unless restrained by a higher court. 4
Petitioner Verstuyft's special appearance on March 24, 1972 for the limited
purpose of pleading his diplomatic immunity and motion to quash search
warrant of April 12, 1972 failed to move respondent judge.

It is a recognized principle of international law and under our system of

separation of powers that diplomatic immunity is essentially a political
question and courts should refuse to look beyond a determination by the
executive branch of the government, 8 and where the plea of diplomatic
immunity is recognized and affirmed by the executive branch of the
government as in the case at bar, it is then the duty of the courts to accept
the claim of immunity upon appropriate suggestion by the principal law
officer of the government, the Solicitor General in this case, or other officer
acting under his direction. 9 Hence, in adherence to the settled principle that
courts may not so exercise their jurisdiction by seizure and detention of
property, as to embarrass the executive arm of the government in
conducting foreign relations, it is accepted doctrine that "in such cases the
judicial department of (this) government follows the action of the political
branch and will not embarrass the latter by assuming an antagonistic
jurisdiction." 10

At the hearing thereof held on May 8, 1972, the Office of the Solicitor
General appeared and filed an extended comment stating the official
position of the executive branch of the Philippine Government that petitioner
Verstuyft is entitled to diplomatic immunity, he did not abuse his diplomatic
immunity, 5 and that court proceedings in the receiving or host State are not
the proper remedy in the case of abuse of diplomatic immunity. 6
The Solicitor General accordingly joined petitioner Verstuyft's prayer for the
quashal of the search warrant. Respondent judge nevertheless summarily
denied quashal of the search warrant per his order of May 9, 1972 "for the
same reasons already stated in (his) aforesaid order of March 16, 1972"
disregarding Foreign Secretary Romulo's plea of diplomatic immunity on
behalf of Dr. Verstuyft.

2. The unfortunate fact that respondent judge chose to rely on the suspicion
of respondents COSAC officers "that the other remaining crates unopened
contain contraband items" 11 rather than on the categorical assurance of the
Solicitor-General that petitioner Verstuyft did not abuse his diplomatic
immunity, 12 which was based in turn on the official positions taken by the
highest executive officials with competence and authority to act on the
matter, namely, the Secretaries of Foreign Affairs and of Finance, could not
justify respondent judge's denial of the quashal of the search warrant.

Hence, the petition at bar. Petitioner Verstuyft has in this Court been joined
by the World Health Organization (WHO) itself in full assertion of petitioner
Verstuyft's being entitled "to all privileges and immunities, exemptions and
facilities accorded to diplomatic envoys in accordance with international law"
under section 24 of the Host Agreement.
The writs of certiorari and prohibition should issue as prayed for.

10

As already stated above, and brought to respondent court's attention, 13 the

Philippine Government is bound by the procedure laid down in Article VII of
the Convention on the Privileges and Immunities of the Specialized
Agencies of the United Nations 14 for consultations between the Host State
and the United Nations agency concerned to determine, in the first instance
the fact of occurrence of the abuse alleged, and if so, to ensure that no
repetition occurs and for other recourses. This is a treaty commitment
voluntarily assumed by the Philippine Government and as such, has the
force and effect of law.

jurisdictional immunity of diplomatic officials in the Philippines are taken into

account. Said Act declares as null and void writs or processes sued out or
prosecuted whereby inter alia the person of an ambassador or public
minister is arrested or imprisoned or his goods or chattels are seized or
attached and makes it a penal offense for "every person by whom the same
is obtained or prosecuted, whether as party or as attorney, and every officer
concerned in executing it" to obtain or enforce such writ or process. 16
The Court, therefore, holds that respondent judge acted without jurisdiction
and with grave abuse of discretion in not ordering the quashal of the search
warrant issued by him in disregard of the diplomatic immunity of petitioner
Verstuyft.

Hence, even assuming arguendo as against the categorical assurance of the

executive branch of government that respondent judge had some ground to
prefer respondents COSAC officers' suspicion that there had been an abuse
of diplomatic immunity, the continuation of the search warrant proceedings
before him was not the proper remedy. He should, nevertheless, in
deference to the exclusive competence and jurisdiction of the executive
branch of government to act on the matter, have acceded to the quashal of
the search warrant, and forwarded his findings or grounds to believe that
there had been such abuse of diplomatic immunity to the Department of
Foreign Affairs for it to deal with, in accordance with the aforementioned
Convention, if so warranted.

ACCORDINGLY, the writs of certiorari and prohibition prayed for are hereby
granted, and the temporary restraining order heretofore issued against
execution or enforcement of the questioned search warrant, which is hereby
declared null and void, is hereby made permanent. The respondent court is
hereby commanded to desist from further proceedings in the matter. No
costs, none having been prayed for.
The clerk of court is hereby directed to furnish a copy of this decision to the
Secretary of Justice for such action as he may find appropriate with regard
to the matters mentioned in paragraph 3 hereof. So ordered.

3. Finally, the Court has noted with concern the apparent lack of coordination
between the various departments involved in the subject-matter of the case
at bar, which made it possible for a small unit, the COSAC, to which
respondents officers belong, seemingly to disregard and go against the
authoritative determination and pronouncements of both the Secretaries of
Foreign Affairs and of Finance that petitioner Verstuyft is entitled to
diplomatic immunity, as confirmed by the Solicitor-General as the principal
law officer of the Government. Such executive determination properly
implemented should have normally constrained respondents officers
themselves to obtain the quashal of the search warrant secured by them
rather than oppose such quashal up to this Court, to the embarrassment of
said department heads, if not of the Philippine Government itself vis a vis the
petitioners. 15

Concepcion, C.J., Makalintal, Zaldivar, Fernando, Barredo, Makasiar,

Antonio and Esguerra, JJ., concur.
Castro, J., reserves his vote.

The seriousness of the matter is underscored when the provisions of

Republic Act 75 enacted since October 21, 1946 to safeguard the

11

On June 1, 1972, the United states Naval Base authorities at Subic,

Zambales, conducted a public bidding for a five-year contract for the right to
operate and/or manage the transportation services inside the naval base.
This bidding was won by Santiago Guerrero, owner- operator of Guerrero's
Transport Services, Inc., herein petitioner, over Concepcion F. Blaylock, the
then incumbent concessionaire doing business under the name of "Blaylock
Transport Services", whose 395 employees are members of respondent
union BTEA-KILUSAN. When petitioner, after the commencement of its
operation on January 1, 1973, refused to employ the members of the
respondent union, the latter. On January, 12, 1975, filed a complaint 1 with
the National Labor Relations Commission 2 docketed as NLRC Case No.
214, against Guerrero's Transport Services, Inc. and Santiago Guerrero, to
compel them to employ its members pursuant to Article 1, Section 2 of the
RP-US Base Agreement dated May 27, 1968. 3 This case was dismissed by
the National Labor Relations Commission on March 13, 1973, upon
petitioner's motion to dismiss on jurisdictional grounds, there being no
employer-employee relationship between the
parties. 4

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

Respondent union then appealed said Order on March 26,1973 to the

Secretary of the Department of Labor, who, instead of deciding the appeal,
remanded the case for review to the NLRC which, subsequently, summoned
both parties to a series of conferences. Thereafter, or on October .11, 1973,
the NLRC issue a Resolution 5ordering petitioner, among others, "to absorb
all the complainants who filed their applications on or before the deadline"
set by petitioner "on 15 November 1972 except those who may have
derogatory records with the U.S. Naval Authorities in Subic, Zambales" and
directing the Officer-in-charge of the provincial office of the Department of
Labor in Olongapo City to "oversee the preparation of the list of those
qualified for absorption in accordance with this resolution."

G.R. No. L-41518 June 30, 1976

GUERRERO'S TRANSPORT SERVICES, INC., petitioner,
vs.
BLAYLOCK TRANSPORTATION SERVICES EMPLOYEES ASSOCIATIONKILUSAN (BTEA-KILUSAN), LABOR ARBITER FRANCISCO M. DE LOS
REYES and JOSE CRUZ, respondents.
Eladio B. Samson petitioner.

Petitioner appealed to Secretary of Labor Blas F. Ople who, in turn, rendered

a Decision on December 27, 1973, affirming said Resolution. 6 On January
22, 1974, Santiago A. Guerrero) appealed the decision to the President of
the Philippines, 7 but on July 9, 1974, the President, through Assistant
Executive Secretary Ronaldo B. Zamora, returned the case to the Secretary
of Labor for appropriate action on the appeal, it appearing, that the same
does not involve national interest. 8

Francisco Angeles for private respondents.

ANTONIO, J.:
Certiorari and prohibition with preliminary injunction to annul the Orders of
the National Labor Relations Commission, of March 26, June 20 and
September 25, 1975, as well as the Writ of Execution of September 26,
1975, issued in NLRC Case No. 214, and to restrain respondent Deputy
Sheriff of Manila from implementing said writ.

In the meantime, the Provincial Director of the Labor Office in Zambales

furnished, on August 2, 1974, petitioner 9a list of forty-six (46) members of
respondent union BTEA-KILUSAN and former drivers of the Blaylock
Transport Service,10 who are within the coverage of the decision of the
Secretary of Labor, and requesting petitioner to report its action on the

12

matter directly to the Chairman, NLRC, Manila. Subsequently, Santiago A.

Guerrero received a letter dated September 24, 1974 11 from Col. Levi L.
Basilla, PC (GSC) Camp Olivas, San Fernando, Pampanga, requesting
compliance with the Order dated July 19, 1974 of the NLRC in NLRC Case
No. 214. In his reply letter dated October 4, 1974, Guerrero informed Col.
Basilia that he had substantially complied with the decision of the Secretary
of Labor affirming the NLRC Resolution of October 31, 1974 in NLRC Case
No. 214, and that any apparent non-compliance therewith was attributable to
the individual complainants who failed to submit themselves for processing
and examination as requested by the authorities of the U.S. Naval Base in
Subic, Zambales, preparatory to their absorption by petitioner.

On September 1, 1975, the Provincial Director of the Zambales Labor Office,

pursuant to the directive of the Secretary of Labor, 19 and the NLRC
Resolution dated October 21, 1975 20 submitted a detailed information to the
Assistant Secretary of the Department of Labor on petitioner's compliance,
"to enable the Department of Labor to formally close" NLRC Case No.
214. 21
On September 25, 1975, respondent Labor Arbiter, acting on the motion for
execution filed by respondent union BTEA-KILUSAN, and finding that both
the Orders, dated March 26 and June 20, 1975, have not been appealed
pursuant to Article 223 of the Labor Code, declared said Orders final and
executory and directed petitioner Guerrero's Transport Services, Inc. to
reinstate the 129 complainants and to pay them the amount of P4,290.00
each, or a total of P592,110.00 as back wages covering the period from
August 22, 1974 to September 20, 1975.22

On January 18, 1975, Acting Executive Secretary Roberto V. Reyes,

pursuant to Section 10 of Presidential Decree No. 21, directed the Chief of
Constabulary to arrest the executive officers of petitioner. 12 On February 20,
1975, petitioner informed Secretary Reyes that it has substantially complied
with the NLRC Resolution of October 31, 1975 as out of those listed by the
Regional Labor Director, only a few passed the examination given and some
of those who passed failed to comply with the final requirements of the U.S.
Naval Base Authority; that only those who passed and complied with the
requirements of the U.S. Naval Base Authority were extended appointments
as early as December 16, 1974, but none of them, for evident lack of
interest, has reported for work. 13 In his 1st endorsement dated March 26,
1975, Secretary Zamora required the Secretary of Labor to verify petitioner's
allegations. 14 On the same date, respondent Labor Arbiter Francisco M. de
los Reyes, upon a motion for execution filed by respondent union, issued an
Order stating that "upon the finality thereof and by way of implementing any
writ of execution that might be issued in this case, further hearings shall be
held to determine the members of respondent union who are entitled to
reinstatement in accordance with the basic guidelines finally determined in
this case." 15

On September 26, 1975, respondent Labor Arbiter issued a writ directing the
respondent Deputy Sheriff of Manila levy on the moneys and/or properties of
petitioner, 23 and on the same date respondent Sheriff immediately serve
said writ on petitioner who was given a period of five (5) days within which to
comply therewith.
It was on this factual environment that petitioner instituted the present
petition for certiorari and prohibition with preliminary injunction on October 6,
1975. Petitioner asserts that the afore-mentioned Orders were issued by
respondent Labor Arbiter without jurisdiction.
As prayed for, this Court, on October 6, 1975, issued a temporary restraining
order and required the respondents to file an answer within ten (10) days
from notice.

On June 20, 1975, respondent Labor Arbiter De los Reyes ordered the
reinstatement of 129 individuals "to their former or substantially equivalent
positions without loss of seniority and other rights and privileges". 16

On October 11, 1975, respondent Labor Arbiter De los Reyes and Sheriff
Jose Cruz filed their Comment by way of answer to the petition, explaining
the legal justifications of their action on the premises.

On July 16,1975, respondent BTEA-KILUSAN filed a Motion for Issuance of

Writ of Execution with respondent Labor Arbiter, 17 but this was objected to
by petitioner contending that the Labor Arbiter has no jurisdiction over NLRC
Case No. 214 and, therefore, his proceedings and orders resulting therefrom
are null and void. 18

Upon motion filed on October 11, 1975 by respondent union BTEA-KILUSAN

for reconsideration and to lift the temporary restraining order of October 6,
1975, this Court, on October 15, 1975, lifted said restraining order and set
the case for hearing on Monday, October 20, 1975 at 3:00 p.m.
At the hearing of this case on October 20, 1975, a Compromise Agreement
was arrived at by the parties wherein they agreed to submit to the Office of t

13

he Secretary of Labor the determination of members of the respondent union

BTEA-KILUSAN who shall be reinstated or absorbed by the herein petitioner
in the transportation service inside the naval base, which determination shall
be considered final. This Court approved this agreement and enjoined "all
the parties to strictly observe the terms thereof." This agreement is deemed
to have superseded the Resolution of the National Labor Relations
Commission of October 31, 1973, as affirmed by the Secretary of Labor on
December 27, 1973.

Arbiter de los Reyes as embodied in the Writ of Execution

issued on 25 September 1975.
The Regional Director of Regional Office No. II, San
Fernando, Pampanga, shall make available to the parties
the facilities of that Office in the implementation of the
aforesaid absorption process. 24
On November 24, 1975, in compliance with the aforesaid directive of the
Secretary of Labor, Labor Arbiter Francisco M. delos Reyes conducted a
hearing to receive evidence as to who were the bona fide employees of the
former concessionaire at the "time of its concession expire". Thereafter,
Labor Arbiter De los Reyes issued an Order, dated November 25, 1975,
listing in Annex "A" thereof, 174 employees who were bona fide employees
of the private respondent, and transmitting a copy of said Order to the Base
Commander, U.S. Naval Base, Olongapo City, with the request for the
immediate screening and approval of their applications in accordance with
applicable rules of said command. The pertinent portion of said Order reads
as follows:

Pursuant to this agreement which was embodied in the Resolution of this

Court of October 24, 1975, Secretary of Labor Blas F. Ople issued an Order
dated November 13, 1975, the pertinent portion of which reads as follows:
The issue submitted for resolution hinges on the credibility
of the alleged applications. Considering that the
employees are economically dependent on their jobs, they
have all the reasons and zealousness to pursue their jobs
within the legitimate framework of our laws. The applicant
are no strangers to the pains and difficulties of
unemployment. Because of these factors we cannot
ignore the affidavits of proof presented by the employees
concerned as against the declaration of the herein
respondent. Firmly entrenched is the rule in this
jurisdiction that doubts arising from labor disputes must be
construed and interpreted in favor of the workers.

As far as this Labor Arbiter is concerned, his only

participation in this case refers to that portion of the
Secretary of Labor's Order directing him to implement "* *
* the absorption of the 175 members of the Blaylock
Transport Employees Association (BTEA-KILUSAN) into
the Guerrero Transport Services," subject to certain terms
and conditions. Hence, any question of "prematurity" as
espoused by respondent's counsel may not he entertained
by this Labor Arbiter.

RESPONSIVE TO THE FOREGOING, the National Labor

Relations Commission through Arbiter Francisco delos
Reyes is hereby directed to implement the absorption of
the 175 members of the Blaylock Transport Employees
Association (BTEA-KILUSAN) into the Guerrero Transport
Services, subject to the following terms and conditions:

Going now to the applicants who should be entitled to

absorption, the Honorable Secretary of Labor specified
that the same should be composed of the 46 submitted by
OIC Liberator Carino on 2 August 1974 and the 129
applicants determined by this Labor Arbiter. Of the latter,
only 128 will be named. A perusal of said list show that the
name "Renato Carriaga" has been doubly listed. For
convenience, these two listings have now been
consolidated and alphabetically arranged and as an
integral part of this Order has been made as Annex "A"
(pp 1 to 6).

1) that they were bona fide employees of the Blaybock

Transportation Service at the time its concession expired:
2) that the appellants shall pass final screening and
approval by the appropriate authorities of the U.S. Base
concerned.
The applicants to be processed for absorption shall be
those in the list of 46 submitted by OIC Liberator (Carino
on 2 August 1974, and the list of 129 determined by

14

For purposes of implementation, the initial step to be

undertaken is for the submission of the name of the
applicants to the U.S. Navy authorities concerned, which
means the U. S. Naval Base at Olongapo City for the
screening and approval by the appropriate authorities.

members of the respondent union BTEA-KILUSAN shall be absorbed or

employed by the herein petitioner Guerrero's Transport Services, Inc., and
that such determination shall be considered as final. In connection therewith,
the Secretary of Labor issued an Order dated November 13, 1975, directing
the National Labor Relations Commission, through Labor Arbiter Francisco
de los Reyes, to implement the absorption of the 175 members 26into the
Guerrero's Transport Services, subject to the following conditions, viz.: (a)
that they were bona fide employees of the Blaylock Transport Service at the
time its concession expired; and (b) that they should pass final screening
and approval by the appropriate authorities of the U.S. Naval Base
concerned. According to private respondent, however, Commander
Vertplaetse of the U.S. Navy Exchange declined to implement the order of
the Labor Arbiter, as it is the petitioner who should request for the screening
and approval of the applicants.

Regarding the determination of whether the applicants

are bona fide employees of the Blaylock Transportation
Service at the time its concession expired, the parties
appear to be in agreement that the records of this case will
eventually show whether the applicants are such
employees. Further, we feel that such employment will
likewise appear in the records of the U. S. Naval Base at
Olongapo City since persons connected with the Base like
the applicants, have to undergo processing by naval
authority.

Considering that the afore-mentioned Compromise-Agreement of the

parties, as approved by this Court, is more than a mere contract and has the
force and effect of any other judgment, it is, therefore, conclusive upon the
[parties and their privies. 27 For it is settled that a compromise has, upon the
parties, the effect and authority of res judicata and is enforceable by
execution upon approval by the court. 28 Since the resolution of the NLRC of
October 31, 1973 required the absorption of the applicants subject to the
conditions therein contained, and there being no showing that such
conditions were complied with, the Labor Arbiter exceeded his authority in
awarding back wages to the 129 complainants.

WHEREFORE, in view of the foregoing considerations,

copies of this Order together with Annex "A" hereof are
hereby transmitted to the Base Commander, U. S. Naval
Base , Olongapo City with the request for the immediate
screening and approval of said applicants, in accordance
with applicable rules of that command. 25
Pursuant to Section 6 of Article I of the Philippine-U S. Labor Agreement of
May 27, 1968, the United States Armed Forces undertook, consistent with
military requirements, "to provide security for employment, and, in the event
certain services are contracted out, the United States Armed Forces
shall require the contractor or concessioner to give priority consideration to
affected employees for employment. (Emphasis supplied.)

ACCORDINGLY, judgment is hereby rendered ordering petitioner to employ

members of respondent labor union BTEA-KILUSAN referred to in the Order
of the Secretary of Labor dated November 13, 1975 who satisfy the criteria
enunciated viz.: (a) those who were bona fide employees of the Blaylock
Transport Services at the time its concession expired; and (b) those who
pass the final screening and approval by the appropriate authorities of the
U.S. Naval Base. For this purpose, petitioner is hereby ordered to submit to
and secure from the appropriate authorities of the U.S. naval Base at Subic,
Zambales the requisite screening and approval, the names of the aforementioned members of respondent union.

A treaty has two (2) aspects as an international agreement between

states, and as municipal law for the people of each state to observe. As part
of the municipal law, the aforesaid provision of the treaty enters into and
forms part of the contract between petitioner and the U.S. Naval Base
authorities. In view of said stipulation, the new contractor is, therefore, bound
to give "priority" to the employment of the qualified employees of the
previous contractor. It is obviously in recognition of such obligation that
petitioner entered into the afore-mentioned Compromise Agreement.

The Order dated September 25, 1975 of respondent Labor Arbiter Francisco
M. de los Reyes, awarding back wages to the 129 complainants in the total
amount of P592,110.00, is hereby set aside. No pronouncement as to costs.

As above indicated, under the Compromise Agreement as embodied in the

Resolution of this Court dated October 24, 1975, the parties agreed to
submit to the Secretary of Labor the determination as to who of the

Barredo, Aquino and Martin, JJ., concur.

15

Concepcion, Jr., J., is on leave.

Court has correctly stressed how far the present Constitution has gone in
seeing to it that the welfare of the economically underprivileged receive full
attention. All that has to be done is to refer to the expanded scope of social
justice 1 and the specific guarantees intended to vitalize the rights of
labor. 2Security of tenure is one of the basic features. Had that provision
been lived up to, the members of respondent Labor Union would not be in
the sad plight they are in at present.

Separate Opinions
It is to be admitted that what complicated matters is that the service to be
rendered is inside the U.S. Naval Base of Olongapo City. Accordingly, the
intervention of the authorities therein cannot be avoided. That is quite
understandable. At the same time, in line with what was held in Reagan v.
Commissioner of Internal Revenue 3and People v. Gozo, 4 the jurisdiction
vested in this government over every inch of soil of its territory compels the
conclusion that its laws are operative even inside a military base or naval
reservation except as limited by the Military Bases Agreement. Moreover, the
interpretation of such a provision should be most restrictive to assure that
there be the least derogation of the rights of the territorial sovereign. 5 The
thought cannot be entertained that the naval authorities concerned would be
insensible to the fundamental public policy of according the utmost
consideration to the claims of labor. This observation is made with the hope
that if paid attention to, respondent Labor Union, through the efforts of the
administrative officials, could still reasonably hope that the financial burden
long sustained by its members could be eased all in accordance with law.

FERNANDO, J., concurring:

The opinion of the Court penned by Justice Antonio in his usual
comprehensive and lucid manner manifests fealty to the mandates of the
law. It is entitled to full concurrence. The parties, duly represented by
counsel, entered on a compromise. Its terms are thus binding on them. They
should be adhered to. Accordingly, there must be compliance with what was
ordained by the Secretary of Labor in his order of November 13, 1975. So it
has been decided by us. We have no choice on the matter. Unfortunately for
respondent Labor Union, no provision was made for backpay. That was an
omission that ought to have been remedied before the compromise was
entered into. This Court, however sympathetic it may be to the claims of
labor, cannot go further than what was assented to by the parties
themselves. So the law prescribes.
Nontheless, the writer is impelled to write this brief concurrence because of
his belief that while this Court is precluded from granting additional relief to
the members of respondent Labor Union who, in the meanwhile, had been
laid off, still their situation is not necessarily devoid of any hope for
improvement. The present Labor Code stresses administrative rather than
judicial redress. It has the advantage of greater flexibility, of more discretion
on the part of the Secretary of Labor. That could be utilized on their behalf.
Certainly, from what appears of record, the course of conduct pursued by
petitioner left much to be desired, and not only from their standpoint. It yields
the impression, to me at least, that there was no fidelity to the basic policy
on labor as prescribed by the present Constitution. Petitioner commenced its
operation on January 1, 1973. It refused to employ the members of
respondent Union, prompting the latter to file a complaint with the National
Labor Relations Court against it and one Santiago Guerrero to compel them
to employ its members pursuant to Article 1, Section 2 of the RP-US Bases
Agreement dated May 27, 1968. Five days thereafter, or on January 17,
1973, the present Constitution came into effect. Time and time again, this

Separate Opinions
FERNANDO, J., concurring:
The opinion of the Court penned by Justice Antonio in his usual
comprehensive and lucid manner manifests fealty to the mandates of the
law. It is entitled to full concurrence. The parties, duly represented by
counsel, entered on a compromise. Its terms are thus binding on them. They
should be adhered to. Accordingly, there must be compliance with what was
ordained by the Secretary of Labor in his order of November 13, 1975. So it
has been decided by us. We have no choice on the matter. Unfortunately for
respondent Labor Union, no provision was made for backpay. That was an
omission that ought to have been remedied before the compromise was
entered into. This Court, however sympathetic it may be to the claims of

16

labor, cannot go further than what was assented to by the parties

themselves. So the law prescribes.
Nontheless, the writer is impelled to write this brief concurrence because of
his belief that while this Court is precluded from granting additional relief to
the members of respondent Labor Union who, in the meanwhile, had been
laid off, still their situation is not necessarily devoid of any hope for
improvement. The present Labor Code stresses administrative rather than
judicial redress. It has the advantage of greater flexibility, of more discretion
on the part of the Secretary of Labor. That could be utilized on their behalf.
Certainly, from what appears of record, the course of conduct pursued by
petitioner left much to be desired, and not only from their standpoint. It yields
the impression, to me at least, that there was no fidelity to the basic policy
on labor as prescribed by the present Constitution. Petitioner commenced its
operation on January 1, 1973. It refused to employ the members of
respondent Union, prompting the latter to file a complaint with the National
Labor Relations Court against it and one Santiago Guerrero to compel them
to employ its members pursuant to Article 1, Section 2 of the RP-US Bases
Agreement dated May 27, 1968. Five days thereafter, or on January 17,
1973, the present Constitution came into effect. Time and time again, this
Court has correctly stressed how far the present Constitution has gone in
seeing to it that the welfare of the economically underprivileged receive full
attention. All that has to be done is to refer to the expanded scope of social
justice 1 and the specific guarantees intended to vitalize the rights of
labor. 2Security of tenure is one of the basic features. Had that provision
been lived up to, the members of respondent Labor Union would not be in
the sad plight they are in at present.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-65366 November 9, 1983
JOSE B.L. REYES, in behalf of the ANTI-BASES COALITION
(ABC), petitioner,
vs.
RAMON BAGATSING, as Mayor of the City of Manila, respondent.
Lorenzo M. Taada Jose W. Diokno and Haydee B. Yorac for petitioner.
The Solicitor General for respondent.

It is to be admitted that what complicated matters is that the service to be

rendered is inside the U.S. Naval Base of Olongapo City. Accordingly, the
intervention of the authorities therein cannot be avoided. That is quite
understandable. At the same time, in line with what was held in Reagan v.
Commissioner of nternal Revenue 3and People v. Gozo, 4 the jurisdiction
vested in this government over every inch of soil of its territory compels the
conclusion that its laws are operative even inside a military base or naval
reservation except as limited by the Military Bases Agreement. Moreover, the
interpretation of such a provision should be most restrictive to assure that
there be the least derogation of the rights of the territorial sovereign. 5 The
thought cannot be entertained that the naval authorities concerned would be
insensible to the fundamental public policy of according the utmost
consideration to the claims of labor. This observation is made with the hope
that if paid attention to, respondent Labor Union, through the efforts of the
administrative officials, could still reasonably hope that the financial burden
long sustained by its members could be eased all in accordance with law.

FERNANDO, C.J.:+.wph!1
This Court, in this case of first impression, at least as to some aspects, is
called upon to delineate the boundaries of the protected area of the cognate
rights to free speech and peaceable assembly, 1 against an alleged intrusion
by respondent Mayor Ramon Bagatsing. Petitioner, retired Justice JB L.
Reyes, on behalf of the Anti-Bases Coalition sought a permit from the City of
Manila to hold a peaceful march and rally on October 26, 1983 from 2:00 to
5:00 in the afternoon, starting from the Luneta, a public park, to the gates of
the United States Embassy, hardly two blocks away. Once there, and in an

17

open space of public property, a short program would be held. 2 During the
course of the oral argument, 3 it was stated that after the delivery of two brief
speeches, a petition based on the resolution adopted on the last day by the
International Conference for General Disbarmament, World Peace and the
Removal of All Foreign Military Bases held in Manila, would be presented to
a representative of the Embassy or any of its personnel who may be there
so that it may be delivered to the United States Ambassador. The march
would be attended by the local and foreign participants of such conference.
There was likewise an assurance in the petition that in the exercise of the
constitutional rights to free speech and assembly, all the necessary steps
would be taken by it "to ensure a peaceful march and rally." 4

the City of Manila. The last sentence of such minute resolution reads: "This
resolution is without prejudice to a more extended opinion." 9 Hence this
detailed exposition of the Court's stand on the matter.
1. It is thus clear that the Court is called upon to protect the exercise of the
cognate rights to free speech and peaceful assembly, arising from the denial
of a permit. The Constitution is quite explicit: "No law shall be passed
abridging the freedom of speech, or of the press, or the right of the people
peaceably to assemble and petition the Government for redress of
grievances." 10 Free speech, like free press, may be Identified with the liberty
to discuss publicly and truthfully any matter of public concern without
censorship or punishment. 11 There is to be then no previous restraint on the
communication of views or subsequent liability whether in libel
suits, 12 prosecution for sedition, 13 or action for damages, 14 or contempt
proceedings 15 unless there be a clear and present danger of a substantive
evil that [the State] has a right to prevent." 16 Freedom of assembly connotes
the right people to meet peaceably for consultation and discussion of
matters Of public concern. 17 It is entitled to be accorded the utmost
deference and respect. It is hot to be limited, much less denied, except on a
showing, as 's the case with freedom of expression, of a clear and present
danger of a substantive evil that the state has a right to prevent. 18 Even prior
to the 1935 Constitution, Justice Maicolm had occasion to stress that it is a
necessary consequence of our republican institutions and complements the
right of free speech. 19 To paraphrase opinion of Justice Rutledge speaking
for the majority of the American Supreme Court Thomas v. Collins, 20 it was
not by accident or coincidence that the right to freedom of speech and of the
press were toupled in a single guarantee with the and to petition the rights of
the people peaceably to assemble and to petition the government for
redress of grievances. All these rights, while not Identical, are inseparable.
the every case, therefo re there is a limitation placed on the exercise of this
right, the judiciary is called upon to examine the effects of the challenged
governmental actuation. The sole justification for a limitation on the exercise
of this right, so fundamental to the maintenance of democratic institutions, is
the danger, of a character both grave and imminent, of a serious evil to
public safety, public morals, public health, or any other legitimate public
interest. 21

The filing of this suit for mandamus with alternative prayer for writ of
preliminary mandatory injunction on October 20, 1983 was due to the fact
that as of that date, petitioner had not been informed of any action taken on
his request on behalf of the organization to hold a rally. On October 25,
1983, the answer of respondent Mayor was filed on his behalf by Assistant
Solicitor General Eduardo G. Montenegro. 5 It turned out that on October 19,
such permit was denied. Petitioner was unaware of such a fact as the denial
was sent by ordinary mail. The reason for refusing a permit was due to
police intelligence reports which strongly militate against the advisability of
issuing such permit at this time and at the place applied for." 6 To be more
specific, reference was made to persistent intelligence reports affirm[ing] the
plans of subversive/criminal elements to infiltrate and/or disrupt any
assembly or congregations where a large number of people is expected to
attend." 7 Respondent Mayor suggested, however, in accordance with the
recommendation of the police authorities, that "a permit may be issued for
the rally if it is to be held at the Rizal Coliseum or any other enclosed area
where the safety of the participants themselves and the general public may
be ensured." 8
The oral argument was heard on October 25, 1983, the very same day the
answer was filed. The Court then deliberated on the matter. That same
afternoon, a minute resolution was issued by the Court granting the
mandatory injunction prayed for on the ground that there was no showing of
the existence of a clear and present danger of a substantive evil that could
justify the denial of a permit. On this point, the Court was unanimous, but
there was a dissent by Justice Aquino on the ground that the holding of a
rally in front of the US Embassy would be violative of Ordinance No. 7295 of

2. Nowhere is the rationale that underlies the freedom of expression and

peaceable assembly better expressed than in this excerpt from an opinion of

18

Justice Frankfurter: "It must never be forgotten, however, that the Bill of
Rights was the child of the Enlightenment. Back of the guaranty of free
speech lay faith in the power of an appeal to reason by all the peaceful
means for gaining access to the mind. It was in order to avert force and
explosions due to restrictions upon rational modes of communication that the
guaranty of free speech was given a generous scope. But utterance in a
context of violence can lose its significance as an appeal to reason and
become part of an instrument of force. Such utterance was not meant to be
sheltered by the Constitution." 22 What was rightfully stressed is the
abandonment of reason, the utterance, whether verbal or printed, being in a
context of violence. It must always be remembered that this right likewise
provides for a safety valve, allowing parties the opportunity to give vent to
their-views, even if contrary to the prevailing climate of opinion. For if the
peaceful means of communication cannot be availed of, resort to nonpeaceful means may be the only alternative. Nor is this the sole reason for
the expression of dissent. It means more than just the right to be heard of
the person who feels aggrieved or who is dissatisfied with things as they are.
Its value may lie in the fact that there may be something worth hearing from
the dissenter. That is to ensure a true ferment of Ideas. There are, of course,
well-defined limits. What is guaranteed is peaceable assembly. One may not
advocate disorder in the name of protest, much less preach rebellion under
the cloak of dissent. The Constitution frowns on disorder or tumult attending
a rally or assembly. resort to force is ruled out and outbreaks of violence to
be avoided. The utmost calm though is not required. As pointed out in an
early Philippine case, penned in 1907 to be precise, United States v.
Apurado: 23 "It is rather to be expected that more or less disorder will mark
the public assembly of the people to protest against grievances whether real
or imaginary, because on such occasions feeling is always wrought to a high
pitch of excitement, and the greater the grievance and the more intense the
feeling, the less perfect, as a rule, will be the disciplinary control of the
leaders over their irresponsible followers." 24 It bears repeating that for the
constitutional right to be invoked, riotous conduct, injury to property, and acts
of vandalism must be avoided, To give free rein to one's destructive urges is
to call for condemnation. It is to make a mockery of the high estate occupied
by intellectual liberty in our scheme of values.

expressed in the plurality opinion, of 1939 vintage, of Justice Roberts

in Hague v. CIO: 25 Whenever the title of streets and parks may rest, they
have immemorially been held in trust for the use of the public and, time out
of mind, have been used for purposes of assembly, communicating thoughts
between citizens, and discussing public questions. Such use of the streets
and public places has, from ancient times, been a part of the privileges,
immunities, rights, and liberties of citizens. The privilege of a citizen of the
United States to use the streets and parks for communication of views on
national questions may be regulated in the interest of all; it is not absolute,
but relative, and must be exercised in subordination to the general comfort
and convenience, and in consonance with peace and good order; but it must
not, in the guise of regulation, be abridged or denied. 26 The above excerpt
was quoted with approval in Primicias v. Fugoso. 27 Primicias made explicit
what was implicit in Municipality of Cavite v. Rojas," 28 a 1915 decision,
where this Court categorically affirmed that plazas or parks and streets are
outside the commerce of man and thus nullified a contract that leased Plaza
Soledad of plaintiff-municipality. Reference was made to such plaza "being a
promenade for public use," 29 which certainly is not the only purpose that it
could serve. To repeat, there can be no valid reason why a permit should not
be granted for the or oposed march and rally starting from a public dark that
is the Luneta.
4. Neither can there be any valid objection to the use of the streets, to the
gates of the US Embassy, hardly two block-away at the Roxas
Boulevard. Primicias v. Fugoso has resolved any lurking doubt on the matter.
In holding that the then Mayor Fugoso of the City of Manila should grant a
permit for a public meeting at Plaza Miranda in Quiapo, this Court
categorically declared: "Our conclusion finds support in the decision in the
case of Willis Cox vs. State of New Hampshire, 312 U.S., 569. In that case,
the statute of New Hampshire P. L. chap. 145, section 2, providing that 'no
parade or procession upon any ground abutting thereon, shall 'De permitted
unless a special license therefor shall first be explained from the selectmen
of the town or from licensing committee,' was construed by the Supreme
Court of New Hampshire as not conferring upon the licensing board
unfettered discretion to refuse to grant the license, and held valid. And the
Supreme Court of the United States, in its decision (1941) penned by Chief
Justice Hughes affirming the judgment of the State Supreme Court, held that
'a statute requiring persons using the public streets for a parade or
procession to procure a special license therefor from the local authorities is

3. There can be no legal objection, absent the existence of a clear and

present danger of a substantive evil, on the choice of Luneta as the place
where the peace rally would start. The Philippines is committed to the view

19

not an unconstitutional abridgment of the rights of assembly or of freedom of

speech and press, where, as the statute is construed by the state courts, the
licensing authorities are strictly limited, in the issuance of licenses, to a
consideration of the time, place, and manner of the parade or procession,
with a view to conserving the public convenience and of affording an
opportunity to provide proper policing, and are not invested with arbitrary
discretion to issue or refuse license, ... " 30 Nor should the point made by
Chief Justice Hughes in a subsequent portion of the opinion be ignored,
"Civil liberties, as guaranteed by the Constitution, imply the existence of an
organized society maintaining public order without which liberty itself would
be lost in the excesses of unrestricted abuses. The authority of a
municipality to impose regulations in order to assure the safety and
convenience of the people in the use of public highways has never been
regarded as inconsistent with civil liberties but rather as one of the means of
safeguarding the good order upon which they ultimately depend. The control
of travel on the streets of cities is the most familiar illustration of this
recognition of social need. Where a restriction of the use of highways in that
relation is designed to promote the public convenience in the interest of all, it
cannot be disregarded by the attempted exercise of some civil right which in
other circumstances would be entitled to protection." 31

a restatement of the generally accepted principles of international law, it

should be a part of the law of the land. 34 That being the case, if there were a
clear and present danger of any intrusion or damage, or disturbance of the
peace of the mission, or impairment of its dignity, there would be a
justification for the denial of the permit insofar as the terminal point would be
the Embassy. Moreover, respondent Mayor relied on Ordinance No. 7295 of
the City of Manila prohibiting the holding or staging of rallies or
demonstrations within a radius of five hundred (500) feet from any foreign
mission or chancery and for other purposes. Unless the ordinance is
nullified, or declared ultra vires, its invocation as a defense is
understandable but not decisive, in view of the primacy accorded the
constitutional rights of free speech and peaceable assembly. Even if shown
then to be applicable, that question the confronts this Court.
6. There is merit to the observation that except as to the novel aspects of a
litigation, the judgment must be confined within the limits of previous
decisions. The law declared on past occasions is, on the whole, a safe
guide, So it has been here. Hence, as noted, on the afternoon of the
hearing, October 25, 1983, this Court issued the minute resolution granting
the mandatory injunction allowing the proposed march and rally scheduled
for the next day. That conclusion was inevitable ill the absence of a clear and
present danger of a substantive, evil to a legitimate public interest. There
was no justification then to deny the exercise of the constitutional rights of
tree speech and peaceable assembly. These rights are assured by our
Constitution and the Universal Declaration of Human Rights. 35 The
participants to such assembly, composed primarily of those in attendance at
the International Conference for General Disbarmament, World Peace and
the Removal of All Foreign Military Bases would start from the Luneta.
proceeding through Roxas Boulevard to the gates of the United States
Embassy located at the same street. To repeat, it is settled law that as to
public places, especially so as to parks and streets, there is freedom of
access. Nor is their use dependent on who is the applicant for the permit,
whether an individual or a group. If it were, then the freedom of access
becomes discriminatory access, giving rise to an equal protection question.
The principle under American doctrines was given utterance by Chief Justice
Hughes in these words: "The question, if the rights of free speech and
peaceable assembly are to be preserved, is not as to the auspices under
which the meeting is held but as to its purpose; not as to The relations of the
speakers, but whether their utterances transcend the bounds of the freedom

5. There is a novel aspect to this case, If the rally were confined to Luneta,
no question, as noted, would have arisen. So, too, if the march would end at
another park. As previously mentioned though, there would be a short
program upon reaching the public space between the two gates of the
United States Embassy at Roxas Boulevard. That would be followed by the
handing over of a petition based on the resolution adopted at the closing
session of the Anti-Bases Coalition. The Philippines is a signatory of the
Vienna Convention on Diplomatic Relations adopted in 1961. It was
concurred in by the then Philippine Senate on May 3, 1965 and the
instrument of ratification was signed by the President on October 11, 1965,
and was thereafter deposited with the Secretary General of the United
Nations on November 15. As of that date then, it was binding on the
Philippines. The second paragraph of the Article 22 reads: "2. The receiving
State is under a special duty to take appropriate steps to protect the
premises of the mission against any intrusion or damage and to prevent any
disturbance of the peace of the mission or impairment of its dignity. " 32 The
Constitution "adopts the generally accepted principles of international law as
part of the law of the land. ..." 33 To the extent that the Vienna Convention is

20

of speech which the Constitution protects." 36 There could be danger to

public peace and safety if such a gathering were marked by turbulence. That
would deprive it of its peaceful character. Even then, only the guilty parties
should be held accountable. It is true that the licensing official, here
respondent Mayor, is not devoid of discretion in determining whether or not a
permit would be granted. It is not, however, unfettered discretion. While
prudence requires that there be a realistic appraisal not of what may
possibly occur but of what may probably occur, given all the relevant
circumstances, still the assumption especially so where the assembly is
scheduled for a specific public place is that the permit must be for the
assembly being held there. The exercise of such a right, in the language of
Justice Roberts, speaking for the American Supreme Court, is not to be
"abridged on the plea that it may be exercised in some other place." 37

at a discreet distance, but ever ready and alert to cope with any contingency.
There is no need to repeat what was pointed out by Chief Justice Hughes in
Cox that precisely, it is the duty of the city authorities to provide the proper
police protection to those exercising their right to peaceable assembly and
freedom of expression.
8. By way of a summary The applicants for a permit to hold an assembly
should inform the licensing authority of the date, the public place where and
the time when it will take place. If it were a private place, only the consent of
the owner or the one entitled to its legal possession is required. Such
application should be filed well ahead in time to enable the public official
concerned to appraise whether there may be valid objections to the grant of
the permit or to its grant but at another public place. It is an indispensable
condition to such refusal or modification that the clear and present danger
test be the standard for the decision reached. If he is of the view that there is
such an imminent and grave danger of a substantive evil, the applicants
must be heard on the matter. Thereafter, his decision, whether favorable or
adverse, must be transmitted to them at the earliest opportunity. Thus if so
minded, then, can have recourse to the proper judicial authority. Free
speech and peaceable assembly, along with the other intellectual freedoms,
are highly ranked in our scheme of constitutional values. It cannot be too
strongly stressed that on the judiciary, even more so than on the other
departments rests the grave and delicate responsibility of assuring
respect for and deference to such preferred rights. No verbal formula, no
sanctifying phrase can, of course, dispense with what has been so
felicitiously termed by Justice Holmes "as the sovereign prerogative of
judgment." Nonetheless, the presumption must be to incline the weight of
the scales of justice on the side of such rights, enjoying as they do
precedence and primacy. Clearly then, to the extent that there may be
inconsistencies between this resolution and that of Navarro v. Villegas, that
case is pro tantomodified. So it was made clear in the original resolution of
October 25, 1983.

7. In fairness to respondent Mayor, he acted on the belief that Navarro v.

Villegas 38 and Pagkakaisa ng Manggagawang Pilipino (PMP.) v.
Bagatsing, 39 called for application. While the General rule is that a permit
should recognize the right of the applicants to hold their assembly at a public
place of their choice, another place may be designated by the licensing
authority if it be shown that there is a clear and present danger of a
substantive evil if no such change were made. In the Navarro and the
Pagkakaisa decisions, this Court was persuaded that the clear and present
danger test was satisfied. The present situation is quite different. Hence the
decision reached by the Court. The mere assertion that subversives may
infiltrate the ranks of the demonstrators does not suffice. Not that it should
be overlooked. There was in this case, however, the assurance of General
Narciso Cabrera, Superintendent, Western Police District, Metropolitan
Police Force, that the police force is in a position to cope with such
emergency should it arise That is to comply with its duty to extend protection
to the participants of such peaceable assembly. Also from him came the
commendable admission that there were the least five previous
demonstrations at the Bayview hotel Area and Plaza Ferguson in front of the
United States Embassy where no untoward event occurred. It was made
clear by petitioner, through counsel, that no act offensive to the dignity of the
United States Mission in the Philippines would take place and that, as
mentioned at the outset of this opinion, "all the necessary steps would be
taken by it 'to ensure a peaceful march and rally.' " 40 Assistant Solicitor
General Montenegro expressed the view that the presence of policemen
may in itself be a provocation. It is a sufficient answer that they should stay

9. Respondent Mayor posed the issue of the applicability of Ordinance No.

7295 of the City of Manila prohibiting the holding or staging of rallies or
demonstrations within a radius of five hundred (500) feet from any foreign
mission or chancery and for other purposes. It is to be admitted that it finds
support In the previously quoted Article 22 of the Vienna Convention on
Diplomatic Relations. There was no showing, however, that the distance

21

between the chancery and the embassy gate is less than 500 feet. Even if it
could be shown that such a condition is satisfied. it does not follow that
respondent Mayor could legally act the way he did. The validity of his denial
of the permit sought could still be challenged. It could be argued that a case
of unconstitutional application of such ordinance to the exercise of the right
of peaceable assembly presents itself. As in this case there was no proof
that the distance is less than 500 feet, the need to pass on that issue was
obviated, Should it come, then the qualification and observation of Justices
Makasiar and Plana certainly cannot be summarily brushed aside. The high
estate accorded the rights to free speech and peaceable assembly demands
nothing less.

TEEHANKEE, J., concurring:

The Chief Justice's opinion of the Court reaffirms the doctrine of Primicias
vs. Fugoso 1 that "the right to freedom of speech and to peacefully assemble
and petition the government for redress of grievances are fundamental
personal rights of the people recognized and guaranteed by the
constitutions of democratic countries" and that the city or town mayors are
not conferred "the power to refuse to grant the permit, but only the
discretion, in issuing the permit, to determine or specify the streets or public
places where the parade or procession may pass or the meeting may be
held." The most recent graphic demonstration of what this great right of
peaceful assembly and petition for redress of grievances could accomplish
was the civil rights march on Washington twenty years ago under the late
assassinated black leader Martin Luther King, Jr. (whose birthday has now
been declared an American national holiday) which subpoenaed the
conscience of the nation," and awakened the conscience of millions of
previously indifferent Americans and eventually (after many disorders and
riots yet to come) was to put an end to segregation and discrimination
against the American Negro.

10. Ordinarily, the remedy in cases of this character is to set aside the denial
or the modification of the permit sought and order the respondent official, to
grant it. Nonetheless, as there was urgency in this case, the proposed march
and rally being scheduled for the next day after the hearing, this Court. in the
exercise of its conceded authority, granted the mandatory injunction in the
resolution of October 25, 1983. It may be noted that the peaceful character
of the peace march and rally on October 26 was not marred by any
untoward incident. So it has been in other assemblies held elsewhere. It is
quite reassuring such that both on the part of the national government and
the citizens, reason and moderation have prevailed. That is as it should be.

The procedure for the securing of such permits for peaceable assembly is
succintly set forth in the summary given by the Court Justice in paragraph 8
of the Court's opinion, with the injunction that "the presumption must be to
incline the weight of the scales of justice on the side of such rights, enjoying
as they do, precedence and primacy," The exception of the clear and
present danger rule, which alone would warrant a limitation of these
fundamental rights, is therein restated in paragraph 1, thus: "The sole
justification for a limitation on the exercise of this right, so fundamental to the
maintenance of democratic institutions, is the danger, of a character both
grave and imminent, of a serious evil to public safety, public morals, public
health, or any other legitimate public interest. "

WHEREFORE, the mandatory injunction prayed for is granted. No costs.

Concepcion, Jr., Guerrero, Melencio-Herrera, Escolin, Relova and Gutierrez,
, Jr.,JJ., concur.
De Castro, J, is on leave.

It bears emphasis that the burden to show the existence of grave and
imminent danger that would justify adverse action on the application lies on
the mayor as licensing authority. There must be objective and convincing,
not subjective or conjectural proof of the existence of such clear and present

Separate Opinions

22

danger. As stated in our Resolution of October 25, 1983, which granted the
mandatory injunction as prayed for, "It is essential for the validity of a denial
of a permit which amounts to a previous restraint or censorship that the
licensing authority does not rely solely on his own appraisal of what public
welfare, peace or safety may require. To justify such a limitation there must
be proof of such weight and sufficiency to satisfy the clear and present
danger test. The possibility that subversives may infiltrate the ranks of the
demonstrators is not enough." As stated by Justice Brandeis in his
concurring opinion in Whitney vs. California. 2 t.hqw

the rights of free speech and assembly. (Emphasis

supplied)
The Court's opinion underscores that the exercise of the right is not to
be "abridged on the plea that it may be exercised in some other
place" (paragraph 6), and that "it is the duty of the city authorities to provide
the proper police protection to those exercising their right to peaceable
assembly and freedom of expression," (at page 14) The U.S. Supreme
Court's pronouncement in Hague vs. Committee for Industrial
Organization 3 cited in Fugoso is worth repeating: t.hqw

Fear of serious injury cannot alone justify suppression of

free speech and assembly. Men feared witches and
burned women. It is the function of speech to free men
from the bondage of irrational fears. To justify suppression
of free speech there must be reasonable ground to fear
that serious evil will result if free speech is practiced.
There must be reasonable ground to believe that the
danger apprehended is imminent. There must be
reasonable ground to believe that the evil to be prevented
is a serious one * * *.

* * * Wherever the title of streets and parks may rest, they

have immemorially been held in trust for the use of the
public and, time out of mind, have been used for purposes
of assembly, communicating thoughts between citizens,
and discussing public questions. Such use of the streets
and public places has, from ancient times, been a part of
the privileges, immunities, rights, and liberties of citizens.
The privilege of a citizen * * * to use the streets and parks
for communication of views on national questions may be
regulated in the interest of all; it is not absolute, but
relative, and must be exercised in subordination to the
general comfort and convenience, and in consonance with
peace and good order; but it must not, in the guise of
regulation, be abridged or denied.

Those who won our independence by revolution were not

cowards. They did not fear political change. They did not
exalt order at the cost of liberty. * * *
Moreover, even imminent danger cannot justify resort to
prohibition of these functions essential (for) effective
democracy, unless the evil apprehended is relatively
serious. Prohibition of free speech and assembly is a
measure so stringent that it would be inappropriate as the
means for averting a relatively trivial harm to a society. * *
* The fact that speech is likely to result in some violence or
in destruction of property is not enough to justify its
suppression. There must be the probability of serious
injury to the state. Among freemen the deterrents
ordinarily to be applied to prevent crimes are education
and punishment for violations of the law, not abridgment of

We think the court below was right in holding the

ordinance quoted in Note I void upon its face. It does not
make comfort or convenience in the use of streets or
parks the standard of official action. It enables the Director
of Safety to refuse a permit on his mere opinion that such
refusal will prevent 'riots, disturbances or disorderly
assemblage. It can thus, as the record discloses, be made
theinstrument of arbitrary suppression of free expression
of views on national affairs for the prohibition of all
speaking will undoubtedly 'prevent' such eventualities. But
uncontrolled official suppression of the privilege cannot be
made a substitute for the duty to maintain order in

23

connection with the exercise of the right. (Emphasis

supplied)

As it turned out, the demonstration was held on October 26, 1983 peaceably
and without any untoward event or evil result, as pledged by the organizers
(like at least five previous peaceful demonstrations in the area). However,
even if there had been any incidents of disorder, this would in no way show
the Court's mandatory injunction to have been wrongfully issued. The
salutary desire on the part of respondent to prevent disorder cannot be
pursued by the unjustified denial and suppression of the people's basic
rights, which would thereby turn out to be mere paper rights.

Needless to say, the leaders of the peaceable assembly should take all the
necessary measures to ensure a peaceful march and assembly and to avoid
the possibility of infiltrators and troublemakers disrupting the same,
concommitantly with the duty of the police to extend protection to the
participants "staying at a discreet distance, but ever ready and alert to
perform their duty." But should any disorderly conduct or incidents occur,
whether provoked or otherwise, it is well to recall former Chief Justice
Ricardo Paras' injunction in his concurring opinion inFugoso, citing the 1907
case of U.S. vs. Apurado, 4 that such instances of "disorderly conduct by
individual members of a crowd (be not seized) as an excuse to characterize
the assembly as a seditious and tumultuous rising against the authorities"
and render illusory the right of peaceable assembly, thus: t.hqw

MAKASIAR, J., concurring:

With the justification that in case of conflict, the Philippine Constitution
particularly the Bill of Rights should prevail over the Vienna Convention.

It is rather to be expected that more or less disorder will

mark the public assembly of the people to protest against
grievances whether real or imaginary, because on such
occasions feeling is always wrought to a high pitch of
excitement, and the greater the grievance and the more
intense the feeling, the less perfect, as a rule, will the
disciplinary control of the leaders over their irresponsible
followers. But if the prosecution be permitted to seize
upon every instance of such disorderly conduct by
individual members of a crowd as an excuse to
characterize the assembly as a seditious and tumultous
rising against the authorities, 'then the right to assemble
and to petition for redress of grievances would become a
delusion and snare and the attempt to exercise it on the
most righteous occasion and in the most peaceable
manner would expose all those who took part therein to
the severest and most unmerited punishment, if the
purposes which they sought to attain did not happen to be
pleasing to the prosecuting authorities. If instances of
disorderly conduct occur on such occasions, the guilty
individuals should be sought out and punished therefor.
(Emphasis supplied).

ABAD SANTOS, J., concurring:

To add anything to the learned opinion of the Chief Justice is like bringing
coal to Newcastle, I just want to state for the record that I voted for the
issuance ex-parte of a preliminary mandatory injunction.

PLANA, J., concurring:

On the whole, I concur in the learned views of the distinguished Chief
Justice. I would like however to voice a reservation regarding Ordinance No.
7295 of the City of Manila which has been invoked by the respondent.
The main opinion yields the implication that a rally or demonstration made
within 500 feet from the chancery of a foreign embassy would be banned for
coming within the terms of the prohibition of the cited Ordinance which was
adopted, so it is said, precisely to implement a treaty obligation of the
Philippines under the 1961 Vienna Convention on Diplomatic Relations.

24

In my view, without saying that the Ordinance is obnoxious per se to the

constitution, it cannot be validly invoked whenever its application would
collide with a constitutionally guaranteed right such as freedom of assembly
and/or expression, as in the case at bar, regardless of whether the chancery
of any foreign embassy is beyond or within 500 feet from the situs of the rally
or demonstration.

riots yet to come) was to put an end to segregation and discrimination

against the American Negro.
The procedure for the securing of such permits for peaceable assembly is
succintly set forth in the summary given by the Court Justice in paragraph 8
of the Court's opinion, with the injunction that "the presumption must be to
incline the weight of the scales of justice on the side of such rights, enjoying
as they do, precedence and primacy," The exception of the clear and
present danger rule, which alone would warrant a limitation of these
fundamental rights, is therein restated in paragraph 1, thus: "The sole
justification for a limitation on the exercise of this right, so fundamental to the
maintenance of democratic institutions, is the danger, of a character both
grave and imminent, of a serious evil to public safety, public morals, public
health, or any other legitimate public interest. "

AQUINO, J., dissenting:

Voted to dismiss the petition on the ground that the holding of the rally in
front of the US Embassy violates Ordinance No. 7295 of the City of Manila.

It bears emphasis that the burden to show the existence of grave and
imminent danger that would justify adverse action on the application lies on
the mayor as licensing authority. There must be objective and convincing,
not subjective or conjectural proof of the existence of such clear and present
danger. As stated in our Resolution of October 25, 1983, which granted the
mandatory injunction as prayed for, "It is essential for the validity of a denial
of a permit which amounts to a previous restraint or censorship that the
licensing authority does not rely solely on his own appraisal of what public
welfare, peace or safety may require. To justify such a limitation there must
be proof of such weight and sufficiency to satisfy the clear and present
danger test. The possibility that subversives may infiltrate the ranks of the
demonstrators is not enough." As stated by Justice Brandeis in his
concurring opinion in Whitney vs. California. 2 t.hqw

Separate Opinions

TEEHANKEE, J., concurring:

The Chief Justice's opinion of the Court reaffirms the doctrine of Primicias
vs. Fugoso 1 that "the right to freedom of speech and to peacefully assemble
and petition the government for redress of grievances are fundamental
personal rights of the people recognized and guaranteed by the
constitutions of democratic countries" and that the city or town mayors are
not conferred "the power to refuse to grant the permit, but only the
discretion, in issuing the permit, to determine or specify the streets or public
places where the parade or procession may pass or the meeting may be
held." The most recent graphic demonstration of what this great right of
peaceful assembly and petition for redress of grievances could accomplish
was the civil rights march on Washington twenty years ago under the late
assassinated black leader Martin Luther King, Jr. (whose birthday has now
been declared an American national holiday) which subpoenaed the
conscience of the nation," and awakened the conscience of millions of
previously indifferent Americans and eventually (after many disorders and

Fear of serious injury cannot alone justify suppression of

free speech and assembly. Men feared witches and
burned women. It is the function of speech to free men
from the bondage of irrational fears. To justify suppression
of free speech there must be reasonable ground to fear
that serious evil will result if free speech is practiced.
There must be reasonable ground to believe that the
danger apprehended is imminent. There must be

25

reasonable ground to believe that the evil to be prevented

is a serious one * * *.
Those who won our independence by revolution were not
cowards. They did not fear political change. They did not
exalt order at the cost of liberty. * * *

for communication of views on national questions may be

regulated in the interest of all; it is not absolute, but
relative, and must be exercised in subordination to the
general comfort and convenience, and in consonance with
peace and good order; but it must not, in the guise of
regulation, be abridged or denied.

Moreover, even imminent danger cannot justify resort to

prohibition of these functions essential (for) effective
democracy, unless the evil apprehended is relatively
serious. Prohibition of free speech and assembly is a
measure so stringent that it would be inappropriate as the
means for averting a relatively trivial harm to a society. * *
* The fact that speech is likely to result in some violence or
in destruction of property is not enough to justify its
suppression. There must be the probability of serious
injury to the state. Among freemen the deterrents
ordinarily to be applied to prevent crimes are education
and punishment for violations of the law, not abridgment of
the rights of free speech and assembly. (Emphasis
supplied)

We think the court below was right in holding the

ordinance quoted in Note I void upon its face. It does not
make comfort or convenience in the use of streets or
parks the standard of official action. It enables the Director
of Safety to refuse a permit on his mere opinion that such
refusal will prevent 'riots, disturbances or disorderly
assemblage. It can thus, as the record discloses, be made
theinstrument of arbitrary suppression of free expression
of views on national affairs for the prohibition of all
speaking will undoubtedly 'prevent' such eventualities. But
uncontrolled official suppression of the privilege cannot be
made a substitute for the duty to maintain order in
connection with the exercise of the right. (Emphasis
supplied)
Needless to say, the leaders of the peaceable assembly should take all the
necessary measures to ensure a peaceful march and assembly and to avoid
the possibility of infiltrators and troublemakers disrupting the same,
concommitantly with the duty of the police to extend protection to the
participants "staying at a discreet distance, but ever ready and alert to
perform their duty." But should any disorderly conduct or incidents occur,
whether provoked or otherwise, it is well to recall former Chief Justice
Ricardo Paras' injunction in his concurring opinion inFugoso, citing the 1907
case of U.S. vs. Apurado, 4 that such instances of "disorderly conduct by
individual members of a crowd (be not seized) as an excuse to characterize
the assembly as a seditious and tumultuous rising against the authorities"
and render illusory the right of peaceable assembly, thus: t.hqw

The Court's opinion underscores that the exercise of the right is not to
be "abridged on the plea that it may be exercised in some other
place" (paragraph 6), and that "it is the duty of the city authorities to provide
the proper police protection to those exercising their right to peaceable
assembly and freedom of expression," (at page 14) The U.S. Supreme
Court's pronouncement in Hague vs. Committee for Industrial
Organization 3 cited in Fugoso is worth repeating: t.hqw
* * * Wherever the title of streets and parks may rest, they
have immemorially been held in trust for the use of the
public and, time out of mind, have been used for purposes
of assembly, communicating thoughts between citizens,
and discussing public questions. Such use of the streets
and public places has, from ancient times, been a part of
the privileges, immunities, rights, and liberties of citizens.
The privilege of a citizen * * * to use the streets and parks

It is rather to be expected that more or less disorder will

mark the public assembly of the people to protest against
grievances whether real or imaginary, because on such

26

occasions feeling is always wrought to a high pitch of

excitement, and the greater the grievance and the more
intense the feeling, the less perfect, as a rule, will the
disciplinary control of the leaders over their irresponsible
followers. But if the prosecution be permitted to seize
upon every instance of such disorderly conduct by
individual members of a crowd as an excuse to
characterize the assembly as a seditious and tumultous
rising against the authorities, 'then the right to assemble
and to petition for redress of grievances would become a
delusion and snare and the attempt to exercise it on the
most righteous occasion and in the most peaceable
manner would expose all those who took part therein to
the severest and most unmerited punishment, if the
purposes which they sought to attain did not happen to be
pleasing to the prosecuting authorities. If instances of
disorderly conduct occur on such occasions, the guilty
individuals should be sought out and punished therefor.
(Emphasis supplied).

ABAD SANTOS, J., concurring:

To add anything to the learned opinion of the Chief Justice is like bringing
coal to Newcastle, I just want to state for the record that I voted for the
issuance ex-parte of a preliminary mandatory injunction.

PLANA, J., concurring:

On the whole, I concur in the learned views of the distinguished Chief
Justice. I would like however to voice a reservation regarding Ordinance No.
7295 of the City of Manila which has been invoked by the respondent.
The main opinion yields the implication that a rally or demonstration made
within 500 feet from the chancery of a foreign embassy would be banned for
coming within the terms of the prohibition of the cited Ordinance which was
adopted, so it is said, precisely to implement a treaty obligation of the
Philippines under the 1961 Vienna Convention on Diplomatic Relations.

As it turned out, the demonstration was held on October 26, 1983 peaceably
and without any untoward event or evil result, as pledged by the organizers
(like at least five previous peaceful demonstrations in the area). However,
even if there had been any incidents of disorder, this would in no way show
the Court's mandatory injunction to have been wrongfully issued. The
salutary desire on the part of respondent to prevent disorder cannot be
pursued by the unjustified denial and suppression of the people's basic
rights, which would thereby turn out to be mere paper rights.

In my view, without saying that the Ordinance is obnoxious per se to the

constitution, it cannot be validly invoked whenever its application would
collide with a constitutionally guaranteed right such as freedom of assembly
and/or expression, as in the case at bar, regardless of whether the chancery
of any foreign embassy is beyond or within 500 feet from the situs of the rally
or demonstration.

AQUINO, J., dissenting:

MAKASIAR, J., concurring:
Voted to dismiss the petition on the ground that the holding of the rally in
front of the US Embassy violates Ordinance No. 7295 of the City of Manila.

With the justification that in case of conflict, the Philippine Constitution

particularly the Bill of Rights should prevail over the Vienna Convention.

27

Sycip, Salazar, Luna & Manalo & Feliciano Law for petitioners.
Albert, Vergara, Benares, Perias & Dominguez Law Office for respondents.

ABAD SANTOS, J.:

This is a petition to review, set aside certain orders and restrain the
respondent judge from trying Civil Case No. 779M of the defunct Court of
First Instance of Rizal.
The factual background is as follows:
At times material to this case, the United States of America had a naval base
in Subic, Zambales. The base was one of those provided in the Military
Bases Agreement between the Philippines and the United States.
Sometime in May, 1972, the United States invited the submission of bids for
the following projects
1. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay,
Philippines.

Republic of the Philippines

SUPREME COURT
Manila

2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to

shoreline revetment, NAVBASE Subic; and repair to Leyte Wharf approach,
NAVBASE Subic Bay, Philippines.

EN BANC

Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids.
Subsequent thereto, the company received from the United States two
telegrams requesting it to confirm its price proposals and for the name of its
bonding company. The company complied with the requests. [In its
complaint, the company alleges that the United States had accepted its bids
because "A request to confirm a price proposal confirms the acceptance of a
bid pursuant to defendant United States' bidding practices." (Rollo, p. 30.)
The truth of this allegation has not been tested because the case has not
reached the trial stage.]

G.R. No. L-35645 May 22, 1985

UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I.
COLLINS and ROBERT GOHIER,petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of
Rizal and ELIGIO DE GUZMAN & CO., INC., respondents.

28

In June, 1972, the company received a letter which was signed by Wilham I.
Collins, Director, Contracts Division, Naval Facilities Engineering Command,
Southwest Pacific, Department of the Navy of the United States, who is one
of the petitioners herein. The letter said that the company did not qualify to
receive an award for the projects because of its previous unsatisfactory
performance rating on a repair contract for the sea wall at the boat landings
of the U.S. Naval Station in Subic Bay. The letter further said that the
projects had been awarded to third parties. In the abovementioned Civil
Case No. 779-M, the company sued the United States of America and
Messrs. James E. Galloway, William I. Collins and Robert Gohier all
members of the Engineering Command of the U.S. Navy. The complaint is to
order the defendants to allow the plaintiff to perform the work on the projects
and, in the event that specific performance was no longer possible, to order
the defendants to pay damages. The company also asked for the issuance
of a writ of preliminary injunction to restrain the defendants from entering into
contracts with third parties for work on the projects.

However, the rules of International Law are not petrified; they are constantly
developing and evolving. And because the activities of states have
multiplied, it has been necessary to distinguish them-between sovereign and
governmental acts (jure imperii) and private, commercial and proprietary
acts (jure gestionis). The result is that State immunity now extends only to
acts jure imperil The restrictive application of State immunity is now the rule
in the United States, the United Kingdom and other states in western
Europe. (See Coquia and Defensor Santiago, Public International Law, pp.
207-209 [1984].)
The respondent judge recognized the restrictive doctrine of State immunity
when he said in his Order denying the defendants' (now petitioners) motion:
" A distinction should be made between a strictly governmental function of
the sovereign state from its private, proprietary or non- governmental acts
(Rollo, p. 20.) However, the respondent judge also said: "It is the Court's
considered opinion that entering into a contract for the repair of wharves or
shoreline is certainly not a governmental function altho it may partake of a
public nature or character. As aptly pointed out by plaintiff's counsel in his
reply citing the ruling in the case of Lyons, Inc., [104 Phil. 594 (1958)], and
which this Court quotes with approval, viz.:

The defendants entered their special appearance for the purpose only of
questioning the jurisdiction of this court over the subject matter of the
complaint and the persons of defendants, the subject matter of the complaint
being acts and omissions of the individual defendants as agents of
defendant United States of America, a foreign sovereign which has not given
her consent to this suit or any other suit for the causes of action asserted in
the complaint." (Rollo, p. 50.)

It is however contended that when a sovereign state

enters into a contract with a private person, the state can
be sued upon the theory that it has descended to the level
of an individual from which it can be implied that it has
given its consent to be sued under the contract. ...

Subsequently the defendants filed a motion to dismiss the complaint which

included an opposition to the issuance of the writ of preliminary injunction.
The company opposed the motion. The trial court denied the motion and
issued the writ. The defendants moved twice to reconsider but to no avail.
Hence the instant petition which seeks to restrain perpetually the
proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the
trial court.

xxx xxx xxx

We agree to the above contention, and considering that
the United States government, through its agency at Subic
Bay, entered into a contract with appellant for stevedoring
and miscellaneous labor services within the Subic Bay
Area, a U.S. Naval Reservation, it is evident that it can
bring an action before our courts for any contractual
liability that that political entity may assume under the
contract. The trial court, therefore, has jurisdiction to
entertain this case ... (Rollo, pp. 20-21.)

The petition is highly impressed with merit.

The traditional rule of State immunity exempts a State from being sued in the
courts of another State without its consent or waiver. This rule is a necessary
consequence of the principles of independence and equality of States.

29

The reliance placed on Lyons by the respondent judge is misplaced for the
following reasons:

That the correct test for the application of State immunity is not the
conclusion of a contract by a State but the legal nature of the act is shown
in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased
three apartment buildings to the United States of America for the use of its
military officials. The plaintiffs sued to recover possession of the premises on
the ground that the term of the leases had expired. They also asked for
increased rentals until the apartments shall have been vacated.

In Harry Lyons, Inc. vs. The United States of America, supra, plaintiff brought
suit in the Court of First Instance of Manila to collect several sums of money
on account of a contract between plaintiff and defendant. The defendant filed
a motion to dismiss on the ground that the court had no jurisdiction over
defendant and over the subject matter of the action. The court granted the
motion on the grounds that: (a) it had no jurisdiction over the defendant who
did not give its consent to the suit; and (b) plaintiff failed to exhaust the
administrative remedies provided in the contract. The order of dismissal was
elevated to this Court for review.

The defendants who were armed forces officers of the United States moved
to dismiss the suit for lack of jurisdiction in the part of the court. The
Municipal Court of Manila granted the motion to dismiss; sustained by the
Court of First Instance, the plaintiffs went to this Court for review on
certiorari. In denying the petition, this Court said:

In sustaining the action of the lower court, this Court said:

On the basis of the foregoing considerations we are of the
belief and we hold that the real party defendant in interest
is the Government of the United States of America; that
any judgment for back or Increased rentals or damages
will have to be paid not by defendants Moore and Tillman
and their 64 co-defendants but by the said U.S.
Government. On the basis of the ruling in the case of Land
vs. Dollar already cited, and on what we have already
stated, the present action must be considered as one
against the U.S. Government. It is clear hat the courts of
the Philippines including the Municipal Court of Manila
have no jurisdiction over the present case for unlawful
detainer. The question of lack of jurisdiction was raised
and interposed at the very beginning of the action. The
U.S. Government has not , given its consent to the filing of
this suit which is essentially against her, though not in
name. Moreover, this is not only a case of a citizen filing a
suit against his own Government without the latter's
consent but it is of a citizen filing an action against a
foreign government without said government's consent,
which renders more obvious the lack of jurisdiction of the
courts of his country. The principles of law behind this rule
are so elementary and of such general acceptance that we
deem it unnecessary to cite authorities in support thereof.
(At p. 323.)

It appearing in the complaint that appellant has not

complied with the procedure laid down in Article XXI of the
contract regarding the prosecution of its claim against the
United States Government, or, stated differently, it has
failed to first exhaust its administrative remedies against
said Government, the lower court acted properly in
dismissing this case.(At p. 598.)
It can thus be seen that the statement in respect of the waiver of State
immunity from suit was purely gratuitous and, therefore, obiter so that it has
no value as an imperative authority.
The restrictive application of State immunity is proper only when the
proceedings arise out of commercial transactions of the foreign sovereign,
its commercial activities or economic affairs. Stated differently, a State may
be said to have descended to the level of an individual and can thus be
deemed to have tacitly given its consent to be sued only when it enters into
business contracts. It does not apply where the contract relates to the
exercise of its sovereign functions. In this case the projects are an integral
part of the naval base which is devoted to the defense of both the United
States and the Philippines, indisputably a function of the government of the
highest order; they are not utilized for nor dedicated to commercial or
business purposes.

30

In Syquia,the United States concluded contracts with private individuals but

the contracts notwithstanding the States was not deemed to have given or
waived its consent to be sued for the reason that the contracts were forjure
imperii and not for jure gestionis.

When the U.S. Government, through its agency at Subic Bay, confirmed the
acceptance of a bid of a private company for the repair of wharves or
shoreline in the Subic Bay area, it is deemed to have entered into a contract
and thus waived the mantle of sovereign immunity from suit and descended
to the level of the ordinary citizen. Its consent to be sued, therefore, is
implied from its act of entering into a contract (Santos vs. Santos, 92 Phil.
281, 284).

WHEREFORE, the petition is granted; the questioned orders of the

respondent judge are set aside and Civil Case No. is dismissed. Costs
against the private respondent.

Fernando, C.J., took no part.

Justice and fairness dictate that a foreign government that commits a breach
of its contractual obligation in the case at bar by the unilateral cancellation of
the award for the project by the United States government, through its
agency at Subic Bay should not be allowed to take undue advantage of a
party who may have legitimate claims against it by seeking refuge behind
the shield of non-suability. A contrary view would render a Filipino citizen, as
in the instant case, helpless and without redress in his own country for
violation of his rights committed by the agents of the foreign government
professing to act in its name.

Separate Opinions

Appropriate are the words of Justice Perfecto in his dissenting opinion

in Syquia vs. Almeda Lopez, 84 Phil. 312, 325:

Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana, * Escolin,

Relova, Gutierrez, Jr., De la Fuente, Cuevas and Alampay, JJ., concur.

Although, generally, foreign governments are beyond the

jurisdiction of domestic courts of justice, such rule is
inapplicable to cases in which the foreign government
enters into private contracts with the citizens of the court's
jurisdiction. A contrary view would simply run against all
principles of decency and violative of all tenets of morals.

MAKASIAR, J., dissenting:

The petition should be dismissed and the proceedings in Civil Case No. 779M in the defunct CFI (now RTC) of Rizal be allowed to continue therein.

Moral principles and principles of justice are as valid and

applicable as well with regard to private individuals as with
regard to governments either domestic or foreign. Once a
foreign government enters into a private contract with the
private citizens of another country, such foreign
government cannot shield its non-performance or
contravention of the terms of the contract under the cloak
of non-jurisdiction. To place such foreign government
beyond the jurisdiction of the domestic courts is to give
approval to the execution of unilateral contracts,

In the case of Lyons vs. the United States of America (104 Phil. 593), where
the contract entered into between the plaintiff (Harry Lyons, Inc.) and the
defendant (U.S. Government) involved stevedoring and labor services within
the Subic Bay area, this Court further stated that inasmuch as ". . . the
United States Government. through its agency at Subic Bay, entered into a
contract with appellant for stevedoring and miscellaneous labor services
within the Subic Bay area, a U.S. Navy Reservation, it is evident that it can
bring an action before our courts for any contractual liability that that political
entity may assume under the contract."

31

graphically described in Spanish as 'contratos leoninos',

because one party gets the lion's share to the detriment of
the other. To give validity to such contract is to sanctify
bad faith, deceit, fraud. We prefer to adhere to the thesis
that all parties in a private contract, including governments
and the most powerful of them, are amenable to law, and
that such contracts are enforceable through the help of the
courts of justice with jurisdiction to take cognizance of any
violation of such contracts if the same had been entered
into only by private individuals.

In the case at bar, the efficacy of the contract between the U.S. Naval
authorities at Subic Bay on one hand, and herein private respondent on the
other, was honored more in the breach than in the compliance The opinion
of the majority will certainly open the floodgates of more violations of
contractual obligations. American authorities or any foreign government in
the Philippines for that matter, dealing with the citizens of this country, can
conveniently seek protective cover under the majority opinion. The result is
disastrous to the Philippines.
This opinion of the majority manifests a neo-colonial mentality. It fosters
economic imperialism and foreign political ascendancy in our Republic.

Constant resort by a foreign state or its agents to the doctrine of State

immunity in this jurisdiction impinges unduly upon our sovereignty and
dignity as a nation. Its application will particularly discourage Filipino or
domestic contractors from transacting business and entering into contracts
with United States authorities or facilities in the Philippines whether naval, air
or ground forces-because the difficulty, if not impossibility, of enforcing a
validly executed contract and of seeking judicial remedy in our own courts
for breaches of contractual obligation committed by agents of the United
States government, always, looms large, thereby hampering the growth of
Filipino enterprises and creating a virtual monopoly in our own country by
United States contractors of contracts for services or supplies with the
various U.S. offices and agencies operating in the Philippines.

The doctrine of government immunity from suit cannot and should not serve
as an instrument for perpetrating an injustice on a citizen (Amigable vs.
Cuenca, L-26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of
First Instance, L-31635, August 31, 1971, 40 SCRA 464).
Under the doctrine of implied waiver of its non-suability, the United States
government, through its naval authorities at Subic Bay, should be held
amenable to lawsuits in our country like any other juristic person.
The invocation by the petitioner United States of America is not in accord
with paragraph 3 of Article III of the original RP-US Military Bases Agreement
of March 14, 1947, which states that "in the exercise of the above-mentioned
rights, powers and authority, the United States agrees that the powers
granted to it will not be used unreasonably. . ." (Emphasis supplied).

The sanctity of upholding agreements freely entered into by the parties

cannot be over emphasized. Whether the parties are nations or private
individuals, it is to be reasonably assumed and expected that the
undertakings in the contract will be complied with in good faith.

Nor is such posture of the petitioners herein in harmony with the amendment
dated May 27, 1968 to the aforesaid RP-US Military Bases Agreement,
which recognizes "the need to promote and maintain sound employment
practices which will assure equality of treatment of all employees ... and
continuing favorable employer-employee relations ..." and "(B)elieving that
an agreement will be mutually beneficial and will strengthen the democratic
institutions cherished by both Governments, ... the United States
Government agrees to accord preferential employment of Filipino citizens in
the Bases, thus (1) the U.S. Forces in the Philippines shall fill the needs for
civilian employment by employing Filipino citizens, etc." (Par. 1, Art. I of the
Amendment of May 27, 1968).

One glaring fact of modern day civilization is that a big and powerful nation,
like the United States of America, can always overwhelm small and weak
nations. The declaration in the United Nations Charter that its member states
are equal and sovereign, becomes hollow and meaningless because big
nations wielding economic and military superiority impose upon and dictate
to small nations, subverting their sovereignty and dignity as nations. Thus,
more often than not, when U.S. interest clashes with the interest of small
nations, the American governmental agencies or its citizens invoke principles
of international law for their own benefit.

32

Neither does the invocation by petitioners of state immunity from suit

express fidelity to paragraph 1 of Article IV of the aforesaid amendment of
May 2 7, 1968 which directs that " contractors and concessionaires
performing work for the U.S. Armed Forces shall be required by their
contract or concession agreements to comply with all applicable Philippine
labor laws and regulations, " even though paragraph 2 thereof affirms that
"nothing in this Agreement shall imply any waiver by either of the two
Governments of such immunity under international law."

underscore the joint Communique of President Marcos and U.S. President

Ford of December 7, 1975, under which "they affirm that sovereign equality,
territorial integrity and political independence of all States are fundamental
principles which both countries scrupulously respect; and that "they confirm
that mutual respect for the dignity of each nation shall characterize their
friendship as well as the alliance between their two countries. "
The majority opinion negates the statement on the delineation of the powers,
duties and responsibilities of both the Philippine and American Base
Commanders that "in the performance of their duties, the Philippine Base
Commander and the American Base Commander shall be guided by full
respect for Philippine sovereignty on the one hand and the assurance of
unhampered U.S. military operations on the other hand and that "they shall
promote cooperation understanding and harmonious relations within the
Base and with the general public in the proximate vicinity thereof" (par. 2 &
par. 3 of the Annex covered by the exchange of notes, January 7, 1979,
between Ambassador Richard W. Murphy and Minister of Foreign Affairs
Carlos P. Romulo, Emphasis supplied).

Reliance by petitioners on the non-suability of the United States Government

before the local courts, actually clashes with No. III on respect for Philippine
law of the Memorandum of Agreement signed on January 7, 1979, also
amending RP-US Military Bases Agreement, which stresses that "it is the
duty of members of the United States Forces, the civilian component and
their dependents, to respect the laws of the Republic of the Philippines and
to abstain from any activity inconsistent with the spirit of the Military Bases
Agreement and, in particular, from any political activity in the Philippines.
The United States shag take all measures within its authority to insure that
they adhere to them (Emphasis supplied).
The foregoing duty imposed by the amendment to the Agreement is further
emphasized by No. IV on the economic and social improvement of areas
surrounding the bases, which directs that "moreover, the United States
Forces shall procure goods and services in the Philippines to the maximum
extent feasible" (Emphasis supplied).

Separate Opinions
MAKASIAR, J., dissenting:

Under No. VI on labor and taxation of the said amendment of January 6,

1979 in connection with the discussions on possible revisions or alterations
of the Agreement of May 27, 1968, "the discussions shall be conducted on
the basis of the principles of equality of treatment, the right to organize, and
bargain collectively, and respect for the sovereignty of the Republic of the
Philippines" (Emphasis supplied)

The petition should be dismissed and the proceedings in Civil Case No. 779M in the defunct CFI (now RTC) of Rizal be allowed to continue therein.
In the case of Lyons vs. the United States of America (104 Phil. 593), where
the contract entered into between the plaintiff (Harry Lyons, Inc.) and the
defendant (U.S. Government) involved stevedoring and labor services within
the Subic Bay area, this Court further stated that inasmuch as ". . . the
United States Government. through its agency at Subic Bay, entered into a
contract with appellant for stevedoring and miscellaneous labor services
within the Subic Bay area, a U.S. Navy Reservation, it is evident that it can

The majority opinion seems to mock the provision of paragraph 1 of the joint
statement of President Marcos and Vice-President Mondale of the United
States dated May 4, 1978 that "the United States re-affirms that Philippine
sovereignty extends over the bases and that Its base shall be under the
command of a Philippine Base Commander, " which is supposed to

33

bring an action before our courts for any contractual liability that that political
entity may assume under the contract."

of non-jurisdiction. To place such foreign government

beyond the jurisdiction of the domestic courts is to give
approval to the execution of unilateral contracts,
graphically described in Spanish as 'contratos leoninos',
because one party gets the lion's share to the detriment of
the other. To give validity to such contract is to sanctify
bad faith, deceit, fraud. We prefer to adhere to the thesis
that all parties in a private contract, including governments
and the most powerful of them, are amenable to law, and
that such contracts are enforceable through the help of the
courts of justice with jurisdiction to take cognizance of any
violation of such contracts if the same had been entered
into only by private individuals.

When the U.S. Government, through its agency at Subic Bay, confirmed the
acceptance of a bid of a private company for the repair of wharves or
shoreline in the Subic Bay area, it is deemed to have entered into a contract
and thus waived the mantle of sovereign immunity from suit and descended
to the level of the ordinary citizen. Its consent to be sued, therefore, is
implied from its act of entering into a contract (Santos vs. Santos, 92 Phil.
281, 284).
Justice and fairness dictate that a foreign government that commits a breach
of its contractual obligation in the case at bar by the unilateral cancellation of
the award for the project by the United States government, through its
agency at Subic Bay should not be allowed to take undue advantage of a
party who may have legitimate claims against it by seeking refuge behind
the shield of non-suability. A contrary view would render a Filipino citizen, as
in the instant case, helpless and without redress in his own country for
violation of his rights committed by the agents of the foreign government
professing to act in its name.

Constant resort by a foreign state or its agents to the doctrine of State

immunity in this jurisdiction impinges unduly upon our sovereignty and
dignity as a nation. Its application will particularly discourage Filipino or
domestic contractors from transacting business and entering into contracts
with United States authorities or facilities in the Philippines whether naval, air
or ground forces-because the difficulty, if not impossibility, of enforcing a
validly executed contract and of seeking judicial remedy in our own courts
for breaches of contractual obligation committed by agents of the United
States government, always, looms large, thereby hampering the growth of
Filipino enterprises and creating a virtual monopoly in our own country by
United States contractors of contracts for services or supplies with the
various U.S. offices and agencies operating in the Philippines.

Appropriate are the words of Justice Perfecto in his dissenting opinion

in Syquia vs. Almeda Lopez, 84 Phil. 312, 325:
Although, generally, foreign governments are beyond the
jurisdiction of domestic courts of justice, such rule is
inapplicable to cases in which the foreign government
enters into private contracts with the citizens of the court's
jurisdiction. A contrary view would simply run against all
principles of decency and violative of all tenets of morals.

The sanctity of upholding agreements freely entered into by the parties

cannot be over emphasized. Whether the parties are nations or private
individuals, it is to be reasonably assumed and expected that the
undertakings in the contract will be complied with in good faith.

Moral principles and principles of justice are as valid and

applicable as well with regard to private individuals as with
regard to governments either domestic or foreign. Once a
foreign government enters into a private contract with the
private citizens of another country, such foreign
government cannot shield its non-performance or
contravention of the terms of the contract under the cloak

One glaring fact of modern day civilization is that a big and powerful nation,
like the United States of America, can always overwhelm small and weak
nations. The declaration in the United Nations Charter that its member states
are equal and sovereign, becomes hollow and meaningless because big
nations wielding economic and military superiority impose upon and dictate
to small nations, subverting their sovereignty and dignity as nations. Thus,

34

more often than not, when U.S. interest clashes with the interest of small
nations, the American governmental agencies or its citizens invoke principles
of international law for their own benefit.

Government agrees to accord preferential employment of Filipino citizens in

the Bases, thus (1) the U.S. Forces in the Philippines shall fill the needs for
civilian employment by employing Filipino citizens, etc." (Par. 1, Art. I of the
Amendment of May 27, 1968).

In the case at bar, the efficacy of the contract between the U.S. Naval
authorities at Subic Bay on one hand, and herein private respondent on the
other, was honored more in the breach than in the compliance The opinion
of the majority will certainly open the floodgates of more violations of
contractual obligations. American authorities or any foreign government in
the Philippines for that matter, dealing with the citizens of this country, can
conveniently seek protective cover under the majority opinion. The result is
disastrous to the Philippines.

Neither does the invocation by petitioners of state immunity from suit

express fidelity to paragraph 1 of Article IV of the aforesaid amendment of
May 2 7, 1968 which directs that " contractors and concessionaires
performing work for the U.S. Armed Forces shall be required by their
contract or concession agreements to comply with all applicable Philippine
labor laws and regulations, " even though paragraph 2 thereof affirms that
"nothing in this Agreement shall imply any waiver by either of the two
Governments of such immunity under international law."

This opinion of the majority manifests a neo-colonial mentality. It fosters

economic imperialism and foreign political ascendancy in our Republic.

Under the doctrine of implied waiver of its non-suability, the United States
government, through its naval authorities at Subic Bay, should be held
amenable to lawsuits in our country like any other juristic person.

Reliance by petitioners on the non-suability of the United States Government

before the local courts, actually clashes with No. III on respect for Philippine
law of the Memorandum of Agreement signed on January 7, 1979, also
amending RP-US Military Bases Agreement, which stresses that "it is the
duty of members of the United States Forces, the civilian component and
their dependents, to respect the laws of the Republic of the Philippines and
to abstain from any activity inconsistent with the spirit of the Military Bases
Agreement and, in particular, from any political activity in the Philippines.
The United States shag take all measures within its authority to insure that
they adhere to them (Emphasis supplied).

The invocation by the petitioner United States of America is not in accord

with paragraph 3 of Article III of the original RP-US Military Bases Agreement
of March 14, 1947, which states that "in the exercise of the above-mentioned
rights, powers and authority, the United States agrees that the powers
granted to it will not be used unreasonably. . ." (Emphasis supplied).

The foregoing duty imposed by the amendment to the Agreement is further

emphasized by No. IV on the economic and social improvement of areas
surrounding the bases, which directs that "moreover, the United States
Forces shall procure goods and services in the Philippines to the maximum
extent feasible" (Emphasis supplied).

Nor is such posture of the petitioners herein in harmony with the amendment
dated May 27, 1968 to the aforesaid RP-US Military Bases Agreement,
which recognizes "the need to promote and maintain sound employment
practices which will assure equality of treatment of all employees ... and
continuing favorable employer-employee relations ..." and "(B)elieving that
an agreement will be mutually beneficial and will strengthen the democratic
institutions cherished by both Governments, ... the United States

Under No. VI on labor and taxation of the said amendment of January 6,

1979 in connection with the discussions on possible revisions or alterations
of the Agreement of May 27, 1968, "the discussions shall be conducted on
the basis of the principles of equality of treatment, the right to organize, and
bargain collectively, and respect for the sovereignty of the Republic of the
Philippines" (Emphasis supplied)

The doctrine of government immunity from suit cannot and should not serve
as an instrument for perpetrating an injustice on a citizen (Amigable vs.
Cuenca, L-26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of
First Instance, L-31635, August 31, 1971, 40 SCRA 464).

35

The majority opinion seems to mock the provision of paragraph 1 of the joint
statement of President Marcos and Vice-President Mondale of the United
States dated May 4, 1978 that "the United States re-affirms that Philippine
sovereignty extends over the bases and that Its base shall be under the
command of a Philippine Base Commander, " which is supposed to
underscore the joint Communique of President Marcos and U.S. President
Ford of December 7, 1975, under which "they affirm that sovereign equality,
territorial integrity and political independence of all States are fundamental
principles which both countries scrupulously respect; and that "they confirm
that mutual respect for the dignity of each nation shall characterize their
friendship as well as the alliance between their two countries. "

Republic of the Philippines

SUPREME COURT
Manila

The majority opinion negates the statement on the delineation of the powers,
duties and responsibilities of both the Philippine and American Base
Commanders that "in the performance of their duties, the Philippine Base
Commander and the American Base Commander shall be guided by full
respect for Philippine sovereignty on the one hand and the assurance of
unhampered U.S. military operations on the other hand and that "they shall
promote cooperation understanding and harmonious relations within the
Base and with the general public in the proximate vicinity thereof" (par. 2 &
par. 3 of the Annex covered by the exchange of notes, January 7, 1979,
between Ambassador Richard W. Murphy and Minister of Foreign Affairs
Carlos P. Romulo, Emphasis supplied).

FIRST DIVISION
G.R. No. L-46930 June 10, 1988
DALE SANDERS, AND A.S. MOREAU, JR, petitioners,
vs.
HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of
First Instance of Zambales, Olongapo City, ANTHONY M. ROSSI and
RALPH L. WYERS, respondents.

CRUZ, J.:
The basic issue to be resolved in this case is whether or not the petitioners
were performing their official duties when they did the acts for which they
have been sued for damages by the private respondents. Once this question
is decided, the other answers will fall into place and this petition need not
detain us any longer than it already has.
Petitioner Sanders was, at the time the incident in question occurred, the
special services director of the U.S. Naval Station (NAVSTA) in Olongapo
City. 1 Petitioner Moreau was the commanding officer of the Subic Naval
Base, which includes the said station. 2 Private respondent Rossi is an
American citizen with permanent residence in the Philippines, 3 as so was

36

private respondent Wyer, who died two years ago. 4 They were both
employed as gameroom attendants in the special services department of the
NAVSTA, the former having been hired in 1971 and the latter in 1969. 5

them mental anguish and that the prejudgment of the grievance proceedings
was an invasion of their personal and proprietary rights.
The private respondents made it clear that the petitioners were being sued in
their private or personal capacity. However, in a motion to dismiss filed under
a special appearance, the petitioners argued that the acts complained of
were performed by them in the discharge of their official duties and that,
consequently, the court had no jurisdiction over them under the doctrine of
state immunity.

On October 3, 1975, the private respondents were advised that their

employment had been converted from permanent full-time to permanent
part-time, effective October 18, 1975. 6 Their reaction was to protest this
conversion and to institute grievance proceedings conformably to the
pertinent rules and regulations of the U.S. Department of Defense. The
result was a recommendation from the hearing officer who conducted the
proceedings for the reinstatement of the private respondents to permanent
full-time status plus backwages. The report on the hearing contained the
observation that "Special Services management practices an autocratic form
of supervision." 7

After extensive written arguments between the parties, the motion was
denied in an order dated March 8, 1977, 9on the main ground that the
petitioners had not presented any evidence that their acts were official in
nature and not personal torts, moreover, the allegation in the complaint was
that the defendants had acted maliciously and in bad faith. The same order
issued a writ of preliminary attachment, conditioned upon the filing of a
P10,000.00 bond by the plaintiffs, against the properties of petitioner
Moreau, who allegedly was then about to leave the Philippines.
Subsequently, to make matters worse for the defendants, petitioner Moreau
was declared in a default by the trial court in its order dated August 9, 1977.
The motion to lift the default order on the ground that Moreau's failure to
appear at the pre-trial conference was the result of some misunderstanding,
and the motion for reconsideration of the denial of the motion to dismiss,
which was filed by the petitioner's new lawyers, were denied by the
respondent court on September 7, 1977.

In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the
complaint), Sanders disagreed with the hearing officer's report and asked for
the rejection of the abovestated recommendation. The letter contained the
statements that: a ) "Mr. Rossi tends to alienate most co-workers and
supervisors;" b) "Messrs. Rossi and Wyers have proven, according to their
immediate supervisors, to be difficult employees to supervise;" and c) "even
though the grievants were under oath not to discuss the case with anyone,
(they) placed the records in public places where others not involved in the
case could hear."
On November 7, 1975, before the start of the grievance hearings, a-letter
(Annex "B" of the complaint) purportedly corning from petitioner Moreau as
the commanding general of the U.S. Naval Station in Subic Bay was sent to
the Chief of Naval Personnel explaining the change of the private
respondent's employment status and requesting concurrence therewith. The
letter did not carry his signature but was signed by W.B. Moore, Jr. "by
direction," presumably of Moreau.

This petition for certiorari, prohibition and preliminary injunction was

thereafter filed before this Court, on the contention that the above-narrated
acts of the respondent court are tainted with grave abuse of discretion
amounting to lack of jurisdiction.
We return now to the basic question of whether the petitioners were acting
officially or only in their private capacities when they did the acts for which
the private respondents have sued them for damages.

On the basis of these antecedent facts, the private respondent filed in the
Court of First Instance of Olongapo City a for damages against the herein
petitioners on November 8, 1976. 8 The plaintiffs claimed that the letters
contained libelous imputations that had exposed them to ridicule and caused

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

functionary is being sued in his personal capacity will not automatically
remove him from the protection of the law of public officers and, if

37

appropriate, the doctrine of state immunity. By the same token, the mere
invocation of official character will not suffice to insulate him from suability
and liability for an act imputed to him as a personal tort committed without or
in excess of his authority. These well-settled principles are applicable not
only to the officers of the local state but also where the person sued in its
courts pertains to the government of a foreign state, as in the present case.

case proceedings after it had become clear that the suit could not prosper
because the acts complained of were covered by the doctrine of state
immunity.
It is abundantly clear in the present case that the acts for which the
petitioners are being called to account were performed by them in the
discharge of their official duties. Sanders, as director of the special services
department of NAVSTA, undoubtedly had supervision over its personnel,
including the private respondents, and had a hand in their employment, work
assignments, discipline, dismissal and other related matters. It is not
disputed that the letter he had written was in fact a reply to a request from
his superior, the other petitioner, for more information regarding the case of
the private respondents. 14 Moreover, even in the absence of such request,
he still was within his rights in reacting to the hearing officer's criticismin
effect a direct attack against him-that Special Services was practicing "an
autocratic form of supervision."

The respondent judge, apparently finding that the complained acts

were prima facie personal and tortious, decided to proceed to trial to
determine inter alia their precise character on the strength of the evidence to
be submitted by the parties. The petitioners have objected, arguing that no
such evidence was needed to substantiate their claim of jurisdictional
immunity. Pending resolution of this question, we issued a temporary
restraining order on September 26, 1977, that has since then suspended the
proceedings in this case in the courta quo.
In past cases, this Court has held that where the character of the act
complained of can be determined from the pleadings exchanged between
the parties before the trial, it is not necessary for the court to require them to
belabor the point at a trial still to be conducted. Such a proceeding would be
superfluous, not to say unfair to the defendant who is subjected to
unnecessary and avoidable inconvenience.

As for Moreau,what he is claimed to have done was write the Chief of Naval
Personnel for concurrence with the conversion of the private respondents'
type of employment even before the grievance proceedings had even
commenced. Disregarding for the nonce the question of its timeliness, this
act is clearly official in nature, performed by Moreau as the immediate
superior of Sanders and directly answerable to Naval Personnel in matters
involving the special services department of NAVSTA In fact, the letter dealt
with the financial and budgetary problems of the department and contained
recommendations for their solution, including the re-designation of the
private respondents. There was nothing personal or private about it.

Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint

against the commanding general of the Olongapo Naval Base should not
have been denied because it had been sufficiently shown that the act for
which he was being sued was done in his official capacity on behalf of the
American government. The United States had not given its consent to be
sued. It was the reverse situation in Syquia v. Almeda Lopez," where we
sustained the order of the lower court granting a where we motion to dismiss
a complaint against certain officers of the U.S. armed forces also shown to
be acting officially in the name of the American government. The United
States had also not waived its immunity from suit. Only three years ago,
in United States of America v. Ruiz, 12 we set aside the denial by the lower
court of a motion to dismiss a complaint for damages filed against the United
States and several of its officials, it appearing that the act complained of was
governmental rather than proprietary, and certainly not personal. In these
and several other cases 13 the Court found it redundant to prolong the other

Given the official character of the above-described letters, we have to

conclude that the petitioners were, legally speaking, being sued as officers
of the United States government. As they have acted on behalf of that
government, and within the scope of their authority, it is that government,
and not the petitioners personally, that is responsible for their acts. Assuming
that the trial can proceed and it is proved that the claimants have a right to
the payment of damages, such award will have to be satisfied not by the
petitioners in their personal capacities but by the United States government
as their principal. This will require that government to perform an affirmative
act to satisfy the judgment, viz, the appropriation of the necessary amount to

38

cover the damages awarded, thus making the action a suit against that
government without its consent.

This case must also be distinguished from such decisions as Festejo v.

Fernando, 23 where the Court held that a bureau director could be sued for
damages on a personal tort committed by him when he acted without or in
excess of authority in forcibly taking private property without paying just
compensation therefor although he did convert it into a public irrigation
canal. It was not necessary to secure the previous consent of the state, nor
could it be validly impleaded as a party defendant, as it was not responsible
for the defendant's unauthorized act.

There should be no question by now that such complaint cannot prosper

unless the government sought to be held ultimately liable has given its
consent to' be sued. So we have ruled not only in Baer but in many other
decisions where we upheld the doctrine of state immunity as applicable not
only to our own government but also to foreign states sought to be subjected
to the jurisdiction of our courts. 15

The case at bar, to repeat, comes under the rule and not under any of the
recognized exceptions. The government of the United States has not given
its consent to be sued for the official acts of the petitioners, who cannot
satisfy any judgment that may be rendered against them. As it is the
American government itself that will have to perform the affirmative act of
appropriating the amount that may be adjudged for the private respondents,
the complaint must be dismissed for lack of jurisdiction.

The practical justification for the doctrine, as Holmes put it, is that "there can
be no legal right against the authority which makes the law on which the
right depends. 16 In the case of foreign states, the rule is derived from the
principle of the sovereign equality of states which wisely admonishes
that par in parem non habet imperium and that a contrary attitude would
"unduly vex the peace of nations." 17 Our adherence to this precept is
formally expressed in Article II, Section 2, of our Constitution, where we
reiterate from our previous charters that the Philippines "adopts the generally
accepted principles of international law as part of the law of the land.

The Court finds that, even under the law of public officers, the acts of the
petitioners are protected by the presumption of good faith, which has not
been overturned by the private respondents. Even mistakes concededly
committed by such public officers are not actionable as long as it is not
shown that they were motivated by malice or gross negligence amounting to
bad faith. 24 This, to, is well settled . 25 Furthermore, applying now our own
penal laws, the letters come under the concept of privileged communications
and are not punishable, 26 let alone the fact that the resented remarks are
not defamatory by our standards. It seems the private respondents have
overstated their case.

All this is not to say that in no case may a public officer be sued as such
without the previous consent of the state. To be sure, there are a number of
well-recognized exceptions. It is clear that a public officer may be sued as
such to compel him to do an act required by law, as where, say, a register of
deeds refuses to record a deed of sale; 18or to restrain a Cabinet member,
for example, from enforcing a law claimed to be unconstitutional; 19 or to
compel the national treasurer to pay damages from an already appropriated
assurance fund; 20 or the commissioner of internal revenue to refund tax
over-payments from a fund already available for the purpose; 21 or, in
general, to secure a judgment that the officer impleaded may satisfy by
himself without the government itself having to do a positive act to assist
him. We have also held that where the government itself has violated its own
laws, the aggrieved party may directly implead the government even without
first filing his claim with the Commission on Audit as normally required, as
the doctrine of state immunity "cannot be used as an instrument for
perpetrating an injustice." 22

A final consideration is that since the questioned acts were done in the
Olongapo Naval Base by the petitioners in the performance of their official
duties and the private respondents are themselves American citizens, it
would seem only proper for the courts of this country to refrain from taking
cognizance of this matter and to treat it as coming under the internal
administration of the said base.
The petitioners' counsel have submitted a memorandum replete with
citations of American cases, as if they were arguing before a court of the
United States. The Court is bemused by such attitude. While these decisions

39

do have persuasive effect upon us, they can at best be invoked only to
support our own jurisprudence, which we have developed and enriched on
the basis of our own persuasions as a people, particularly since we became
independent in 1946.
G.R. No. 76607 February 26, 1990

We appreciate the assistance foreign decisions offer us, and not only from
the United States but also from Spain and other countries from which we
have derived some if not most of our own laws. But we should not place
undue and fawning reliance upon them and regard them as indispensable
mental crutches without which we cannot come to our own decisions through
the employment of our own endowments We live in a different ambience and
must decide our own problems in the light of our own interests and needs,
and of our qualities and even idiosyncrasies as a people, and always with
our own concept of law and justice.

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE

REEVES, petitioners,
vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial
Court, Angeles City, ROBERTO T. VALENCIA, EMERENCIANA C.
TANGLAO, AND PABLO C. DEL PILAR, respondents.
CRUZ, J.:

The private respondents must, if they are still sominded, pursue their claim
against the petitioners in accordance with the laws of the United States, of
which they are all citizens and under whose jurisdiction the alleged offenses
were committed. Even assuming that our own laws are applicable, the
United States government has not decided to give its consent to be sued in
our courts, which therefore has not acquired the competence to act on the
said claim,.

These cases have been consolidated because they all involve the doctrine
of state immunity. The United States of America was not impleaded in the
complaints below but has moved to dismiss on the ground that they are in
effect suits against it to which it has not consented. It is now contesting the
denial of its motions by the respondent judges.
In G.R. No. 76607, the private respondents are suing several officers of the
U.S. Air Force stationed in Clark Air Base in connection with the bidding
conducted by them for contracts for barber services in the said base.

WHEREFORE, the petition is GRANTED. The challenged orders dated

March 8,1977, August 9,1977, and September 7, 1977, are SET ASIDE. The
respondent court is directed to DISMISS Civil Case No. 2077-O. Our
Temporary restraining order of September 26,1977, is made PERMANENT.
No costs.

On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area
Exchange, U.S. Air Force, solicited bids for such contracts through its
contracting officer, James F. Shaw. Among those who submitted their bids
were private respondents Roberto T. Valencia, Emerenciana C. Tanglao, and
Pablo C. del Pilar. Valencia had been a concessionaire inside Clark for 34
years; del Pilar for 12 years; and Tanglao for 50 years.

SO ORDERED.
Narvasa, Gancayco, Grino-Aquio and Medialdea, JJ., Concur.

The bidding was won by Ramon Dizon, over the objection of the private
respondents, who claimed that he had made a bid for four facilities, including
the Civil Engineering Area, which was not included in the invitation to bid.

40

The private respondents complained to the Philippine Area Exchange

(PHAX). The latter, through its representatives, petitioners Yvonne Reeves
and Frederic M. Smouse explained that the Civil Engineering concession
had not been awarded to Dizon as a result of the February 24, 1986
solicitation. Dizon was already operating this concession, then known as the
NCO club concession, and the expiration of the contract had been extended
from June 30, 1986 to August 31, 1986. They further explained that the
solicitation of the CE barbershop would be available only by the end of June
and the private respondents would be notified.

concession it is the Court's understanding that neither the

US Government nor the herein principal defendants would
become the employer/s of the plaintiffs but that the latter
are the employers themselves of the barbers, etc. with the
employer, the plaintiffs herein, remitting the stipulated
percentage of commissions to the Philippine Area
Exchange. The same circumstance would become in
effect when the Philippine Area Exchange opened for
bidding or solicitation the questioned barber shop
concessions. To this extent, therefore, indeed a
commercial transaction has been entered, and for
purposes of the said solicitation, would necessarily be
entered between the plaintiffs as well as the defendants.

On June 30, 1986, the private respondents filed a complaint in the court
below to compel PHAX and the individual petitioners to cancel the award to
defendant Dizon, to conduct a rebidding for the barbershop concessions and
to allow the private respondents by a writ of preliminary injunction to
continue operating the concessions pending litigation. 1

The Court, further, is of the view that Article XVIII of the

RP-US Bases Agreement does not cover such kind of
services falling under the concessionaireship, such as a
barber shop concession. 2

Upon the filing of the complaint, the respondent court issued an ex

parte order directing the individual petitioners to maintain the status quo.

On December 11, 1986, following the filing of the herein petition

for certiorari and prohibition with preliminary injunction, we issued a
temporary restraining order against further proceedings in the court below. 3

On July 22, 1986, the petitioners filed a motion to dismiss and opposition to
the petition for preliminary injunction on the ground that the action was in
effect a suit against the United States of America, which had not waived its
non-suability. The individual defendants, as official employees of the U.S. Air
Force, were also immune from suit.

In G.R. No. 79470, Fabian Genove filed a complaint for damages against
petitioners Anthony Lamachia, Wilfredo Belsa, Rose Cartalla and Peter
Orascion for his dismissal as cook in the U.S. Air Force Recreation Center at
the John Hay Air Station in Baguio City. It had been ascertained after
investigation, from the testimony of Belsa Cartalla and Orascion, that
Genove had poured urine into the soup stock used in cooking the vegetables
served to the club customers. Lamachia, as club manager, suspended him
and thereafter referred the case to a board of arbitrators conformably to the
collective bargaining agreement between the Center and its employees. The
board unanimously found him guilty and recommended his dismissal. This
was effected on March 5, 1986, by Col. David C. Kimball, Commander of the
3rd Combat Support Group, PACAF Clark Air Force Base. Genove's reaction
was to file Ms complaint in the Regional Trial Court of Baguio City against
the individual petitioners. 4

On the same date, July 22, 1986, the trial court denied the application for a
writ of preliminary injunction.
On October 10, 1988, the trial court denied the petitioners' motion to
dismiss, holding in part as follows:
From the pleadings thus far presented to this Court by the
parties, the Court's attention is called by the relationship
between the plaintiffs as well as the defendants, including
the US Government, in that prior to the bidding or
solicitation in question, there was a binding contract
between the plaintiffs as well as the defendants, including
the US Government. By virtue of said contract of

41

On March 13, 1987, the defendants, joined by the United States of America,
moved to dismiss the complaint, alleging that Lamachia, as an officer of the
U.S. Air Force stationed at John Hay Air Station, was immune from suit for
the acts done by him in his official capacity. They argued that the suit was in
effect against the United States, which had not given its consent to be sued.

During the period for filing of the answer, Mariano Y. Navarro a special
counsel assigned to the International Law Division, Office of the Staff Judge
Advocate of Clark Air Base, entered a special appearance for the defendants
and moved for an extension within which to file an "answer and/or other
pleadings." His reason was that the Attorney General of the United States
had not yet designated counsel to represent the defendants, who were being
sued for their official acts. Within the extended period, the defendants,
without the assistance of counsel or authority from the U.S. Department of
Justice, filed their answer. They alleged therein as affirmative defenses that
they had only done their duty in the enforcement of the laws of the
Philippines inside the American bases pursuant to the RP-US Military Bases
Agreement.

This motion was denied by the respondent judge on June 4, 1987, in an

order which read in part:
It is the understanding of the Court, based on the
allegations of the complaint which have been
hypothetically admitted by defendants upon the filing of
their motion to dismiss that although defendants acted
initially in their official capacities, their going beyond what
their functions called for brought them out of the protective
mantle of whatever immunities they may have had in the
beginning. Thus, the allegation that the acts complained of
were illegal, done. with extreme bad faith and with preconceived sinister plan to harass and finally dismiss the
plaintiff, gains significance. 5

On May 7, 1987, the law firm of Luna, Sison and Manas, having been
retained to represent the defendants, filed with leave of court a motion to
withdraw the answer and dismiss the complaint. The ground invoked was
that the defendants were acting in their official capacity when they did the
acts complained of and that the complaint against them was in effect a suit
against the United States without its consent.
The motion was denied by the respondent judge in his order dated
September 11, 1987, which held that the claimed immunity under the Military
Bases Agreement covered only criminal and not civil cases. Moreover, the
defendants had come under the jurisdiction of the court when they submitted
their answer. 7

The petitioners then came to this Court seeking certiorari and prohibition
with preliminary injunction.
In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in
Camp O' Donnell, an extension of Clark Air Base, was arrested following a
buy-bust operation conducted by the individual petitioners herein, namely,
Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S. Air
Force and special agents of the Air Force Office of Special Investigators
(AFOSI). On the basis of the sworn statements made by them, an
information for violation of R.A. 6425, otherwise known as the Dangerous
Drugs Act, was filed against Bautista in the Regional Trial Court of Tarlac.
The above-named officers testified against him at his trial. As a result of the
filing of the charge, Bautista was dismissed from his employment. He then
filed a complaint for damages against the individual petitioners herein
claiming that it was because of their acts that he was removed. 6

Following the filing of the herein petition for certiorari and prohibition with
preliminary injunction, we issued on October 14, 1987, a temporary
restraining order. 8
In G.R. No. 80258, a complaint for damages was filed by the private
respondents against the herein petitioners (except the United States of
America), for injuries allegedly sustained by the plaintiffs as a result of the
acts of the defendants. 9 There is a conflict of factual allegations here.
According to the plaintiffs, the defendants beat them up, handcuffed them
and unleashed dogs on them which bit them in several parts of their bodies
and caused extensive injuries to them. The defendants deny this and claim
the plaintiffs were arrested for theft and were bitten by the dogs because

42

they were struggling and resisting arrest, The defendants stress that the
dogs were called off and the plaintiffs were immediately taken to the medical
center for treatment of their wounds.

law of our land under Article II, Section 2. This latter provision merely
reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and
also intended to manifest our resolve to abide by the rules of the
international community.

In a motion to dismiss the complaint, the United States of America and the
individually named defendants argued that the suit was in effect a suit
against the United States, which had not given its consent to be sued. The
defendants were also immune from suit under the RP-US Bases Treaty for
acts done by them in the performance of their official functions.

Even without such affirmation, we would still be bound by the generally

accepted principles of international law under the doctrine of incorporation.
Under this doctrine, as accepted by the majority of states, such principles
are deemed incorporated in the law of every civilized state as a condition
and consequence of its membership in the society of nations. Upon its
admission to such society, the state is automatically obligated to comply with
these principles in its relations with other states.

The motion to dismiss was denied by the trial court in its order dated August
10, 1987, reading in part as follows:

As applied to the local state, the doctrine of state immunity is based on the
justification given by Justice Holmes that "there can be no legal right against
the authority which makes the law on which the right depends." 12 There are
other practical reasons for the enforcement of the doctrine. In the case of the
foreign state sought to be impleaded in the local jurisdiction, the added
inhibition is expressed in the maxim par in parem, non habet imperium. All
states are sovereign equals and cannot assert jurisdiction over one another.
A contrary disposition would, in the language of a celebrated case, "unduly
vex the peace of nations." 13

The defendants certainly cannot correctly argue that they

are immune from suit. The allegations, of the complaint
which is sought to be dismissed, had to be hypothetically
admitted and whatever ground the defendants may have,
had to be ventilated during the trial of the case on the
merits. The complaint alleged criminal acts against the
individually-named defendants and from the nature of said
acts it could not be said that they are Acts of State, for
which immunity should be invoked. If the Filipinos
themselves are duty bound to respect, obey and submit
themselves to the laws of the country, with more reason,
the members of the United States Armed Forces who are
being treated as guests of this country should respect,
obey and submit themselves to its laws. 10

While the doctrine appears to prohibit only suits against the state without its
consent, it is also applicable to complaints filed against officials of the state
for acts allegedly performed by them in the discharge of their duties. The
rule is that if the judgment against such officials will require the state itself to
perform an affirmative act to satisfy the same, such as the appropriation of
the amount needed to pay the damages awarded against them, the suit
must be regarded as against the state itself although it has not been formally
impleaded. 14 In such a situation, the state may move to dismiss the
complaint on the ground that it has been filed without its consent.

and so was the motion for reconsideration. The defendants submitted their
answer as required but subsequently filed their petition for certiorari and
prohibition with preliminary injunction with this Court. We issued a temporary
restraining order on October 27, 1987. 11

The doctrine is sometimes derisively called "the royal prerogative of

dishonesty" because of the privilege it grants the state to defeat any
legitimate claim against it by simply invoking its non-suability. That is hardly
fair, at least in democratic societies, for the state is not an unfeeling tyrant
unmoved by the valid claims of its citizens. In fact, the doctrine is not

II
The rule that a state may not be sued without its consent, now expressed in
Article XVI, Section 3, of the 1987 Constitution, is one of the generally
accepted principles of international law that we have adopted as part of the

43

absolute and does not say the state may not be sued under any
circumstance. On the contrary, the rule says that the state may not be sued
without its consent, which clearly imports that it may be sued if it consents.

territorial waters and air space adjacent to, or in the

vicinity of, the bases which are necessary to provide
access to them or appropriate for their control.
The petitioners also rely heavily on Baer v. Tizon, 21 along with several other
decisions, to support their position that they are not suable in the cases
below, the United States not having waived its sovereign immunity from suit.
It is emphasized that in Baer, the Court held:

The consent of the state to be sued may be manifested expressly or

impliedly. Express consent may be embodied in a general law or a special
law. Consent is implied when the state enters into a contract or it itself
commences litigation.
The general law waiving the immunity of the state from suit is found in Act
No. 3083, under which the Philippine government "consents and submits to
be sued upon any moneyed claim involving liability arising from contract,
express or implied, which could serve as a basis of civil action between
private parties." In Merritt v. Government of the Philippine Islands, 15 a
special law was passed to enable a person to sue the government for an
alleged tort. When the government enters into a contract, it is deemed to
have descended to the level of the other contracting party and divested of its
sovereign immunity from suit with its implied consent.16 Waiver is also
implied when the government files a complaint, thus opening itself to a
counterclaim. 17

The invocation of the doctrine of immunity from suit of a

foreign state without its consent is appropriate. More
specifically, insofar as alien armed forces is concerned,
the starting point is Raquiza v. Bradford, a 1945 decision.
In dismissing a habeas corpus petition for the release of
petitioners confined by American army authorities, Justice
Hilado speaking for the Court, cited Coleman v.
Tennessee, where it was explicitly declared: 'It is well
settled that a foreign army, permitted to march through a
friendly country or to be stationed in it, by permission of its
government or sovereign, is exempt from the civil and
criminal jurisdiction of the place.' Two years later, in Tubb
and Tedrow v. Griess, this Court relied on the ruling in
Raquiza v. Bradford and cited in support thereof excerpts
from the works of the following authoritative writers: Vattel,
Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde,
and McNair and Lauterpacht. Accuracy demands the
clarification that after the conclusion of the PhilippineAmerican Military Bases Agreement, the treaty provisions
should control on such matter, the assumption being that
there was a manifestation of the submission to jurisdiction
on the part of the foreign power whenever appropriate.
More to the point is Syquia v. Almeda Lopez, where
plaintiffs as lessors sued the Commanding General of the
United States Army in the Philippines, seeking the
restoration to them of the apartment buildings they owned
leased to the United States armed forces stationed in the
Manila area. A motion to dismiss on the ground of nonsuability was filed and upheld by respondent Judge. The
matter was taken to this Court in a mandamus proceeding.

The above rules are subject to qualification. Express consent is effected only
by the will of the legislature through the medium of a duly enacted
statute. 18 We have held that not all contracts entered into by the government
will operate as a waiver of its non-suability; distinction must be made
between its sovereign and proprietary acts. 19 As for the filing of a complaint
by the government, suability will result only where the government is
claiming affirmative relief from the defendant. 20
In the case of the United States of America, the customary rule of
international law on state immunity is expressed with more specificity in the
RP-US Bases Treaty. Article III thereof provides as follows:
It is mutually agreed that the United States shall have the
rights, power and authority within the bases which are
necessary for the establishment, use, operation and
defense thereof or appropriate for the control thereof and
all the rights, power and authority within the limits of the

44

It failed. It was the ruling that respondent Judge acted

correctly considering that the 4 action must be considered
as one against the U.S. Government. The opinion of
Justice Montemayor continued: 'It is clear that the courts
of the Philippines including the Municipal Court of Manila
have no jurisdiction over the present case for unlawful
detainer. The question of lack of jurisdiction was raised
and interposed at the very beginning of the action. The
U.S. Government has not given its consent to the filing of
this suit which is essentially against her, though not in
name. Moreover, this is not only a case of a citizen filing a
suit against his own Government without the latter's
consent but it is of a citizen firing an action against a
foreign government without said government's consent,
which renders more obvious the lack of jurisdiction of the
courts of his country. The principles of law behind this rule
are so elementary and of such general acceptance that we
deem it unnecessary to cite authorities in support thereof
then came Marvel Building Corporation v. Philippine War
Damage Commission, where respondent, a United States
Agency established to compensate damages suffered by
the Philippines during World War II was held as falling
within the above doctrine as the suit against it would
eventually be a charge against or financial liability of the
United States Government because ... , the Commission
has no funds of its own for the purpose of paying money
judgments.' The Syquia ruling was again explicitly relied
upon in Marquez Lim v. Nelson, involving a complaint for
the recovery of a motor launch, plus damages, the special
defense interposed being 'that the vessel belonged to the
United States Government, that the defendants merely
acted as agents of said Government, and that the United
States Government is therefore the real party in interest.'
So it was in Philippine Alien Property Administration v.
Castelo, where it was held that a suit against Alien
Property Custodian and the Attorney General of the United
States involving vested property under the Trading with
the Enemy Act is in substance a suit against the United
States. To the same effect is Parreno v. McGranery, as the

following excerpt from the opinion of justice Tuazon clearly

shows: 'It is a widely accepted principle of international
law, which is made a part of the law of the land (Article II,
Section 3 of the Constitution), that a foreign state may not
be brought to suit before the courts of another state or its
own courts without its consent.' Finally, there is Johnson v.
Turner, an appeal by the defendant, then Commanding
General, Philippine Command (Air Force, with office at
Clark Field) from a decision ordering the return to plaintiff
of the confiscated military payment certificates known as
scrip money. In reversing the lower court decision, this
Tribunal, through Justice Montemayor, relied on Syquia v.
Almeda Lopez, explaining why it could not be sustained.
It bears stressing at this point that the above observations do not confer on
the United States of America a blanket immunity for all acts done by it or its
agents in the Philippines. Neither may the other petitioners claim that they
are also insulated from suit in this country merely because they have acted
as agents of the United States in the discharge of their official functions.
There is no question that the United States of America, like any other state,
will be deemed to have impliedly waived its non-suability if it has entered into
a contract in its proprietary or private capacity. It is only when the contract
involves its sovereign or governmental capacity that no such waiver may be
implied. This was our ruling in United States of America v. Ruiz, 22 where the
transaction in question dealt with the improvement of the wharves in the
naval installation at Subic Bay. As this was a clearly governmental function,
we held that the contract did not operate to divest the United States of its
sovereign immunity from suit. In the words of Justice Vicente Abad Santos:
The traditional rule of immunity exempts a State from
being sued in the courts of another State without its
consent or waiver. This rule is a necessary consequence
of the principles of independence and equality of States.
However, the rules of International Law are not petrified;
they are constantly developing and evolving. And because
the activities of states have multiplied, it has been
necessary to distinguish them between sovereign and

45

governmental acts (jure imperii) and private, commercial

and proprietary acts (jure gestionis). The result is that
State immunity now extends only to acts jure imperii The
restrictive application of State immunity is now the rule in
the United States, the United kingdom and other states in
Western Europe.

Court sustained the denial of the motion and held that the doctrine of state
immunity was not applicable. The director was being sued in his private
capacity for a personal tort.

xxx xxx xxx

III

The restrictive application of State immunity is proper only

when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State
may be said to have descended to the level of an
individual and can thus be deemed to have tacitly given its
consent to be sued only when it enters into business
contracts. It does not apply where the contract relates to
the exercise of its sovereign functions. In this case the
projects are an integral part of the naval base which is
devoted to the defense of both the United States and the
Philippines, indisputably a function of the government of
the highest order; they are not utilized for nor dedicated to
commercial or business purposes.

It is clear from a study of the records of G.R. No. 80018 that the individuallynamed petitioners therein were acting in the exercise of their official
functions when they conducted the buy-bust operation against the
complainant and thereafter testified against him at his trial. The said
petitioners were in fact connected with the Air Force Office of Special
Investigators and were charged precisely with the function of preventing the
distribution, possession and use of prohibited drugs and prosecuting those
guilty of such acts. It cannot for a moment be imagined that they were acting
in their private or unofficial capacity when they apprehended and later
testified against the complainant. It follows that for discharging their duties
as agents of the United States, they cannot be directly impleaded for acts
imputable to their principal, which has not given its consent to be sued. As
we observed in Sanders v. Veridiano: 24

With these considerations in mind, we now proceed to resolve the cases at

hand.

Given the official character of the above-described letters,

we have to conclude that the petitioners were, legally
speaking, being sued as officers of the United States
government. As they have acted on behalf of that
government, and within the scope of their authority, it is
that government, and not the petitioners personally, that is
responsible for their acts.

The other petitioners in the cases before us all aver they have acted in the
discharge of their official functions as officers or agents of the United States.
However, this is a matter of evidence. The charges against them may not be
summarily dismissed on their mere assertion that their acts are imputable to
the United States of America, which has not given its consent to be sued. In
fact, the defendants are sought to be held answerable for personal torts in
which the United States itself is not involved. If found liable, they and they
alone must satisfy the judgment.

The private respondent invokes Article 2180 of the Civil Code which holds
the government liable if it acts through a special agent. The argument, it
would seem, is premised on the ground that since the officers are
designated "special agents," the United States government should be liable
for their torts.

In Festejo v. Fernando, 23 a bureau director, acting without any authority

whatsoever, appropriated private land and converted it into public irrigation
ditches. Sued for the value of the lots invalidly taken by him, he moved to
dismiss the complaint on the ground that the suit was in effect against the
Philippine government, which had not given its consent to be sued. This

46

There seems to be a failure to distinguish between suability and liability and

a misconception that the two terms are synonymous. Suability depends on
the consent of the state to be sued, liability on the applicable law and the
established facts. The circumstance that a state is suable does not
necessarily mean that it is liable; on the other hand, it can never be held
liable if it does not first consent to be sued. Liability is not conceded by the
mere fact that the state has allowed itself to be sued. When the state does
waive its sovereign immunity, it is only giving the plaintiff the chance to
prove, if it can, that the defendant is liable.

Only after it shall have determined in what capacity the petitioners were
acting at the time of the incident in question will this Court determine, if still
necessary, if the doctrine of state immunity is applicable.
In G.R. No. 79470, private respondent Genove was employed as a cook in
the Main Club located at the U.S. Air Force Recreation Center, also known
as the Open Mess Complex, at John Hay Air Station. As manager of this
complex, petitioner Lamachia is responsible for eleven diversified activities
generating an annual income of $2 million. Under his executive management
are three service restaurants, a cafeteria, a bakery, a Class VI store, a coffee
and pantry shop, a main cashier cage, an administrative office, and a
decentralized warehouse which maintains a stock level of $200,000.00 per
month in resale items. He supervises 167 employees, one of whom was
Genove, with whom the United States government has concluded a
collective bargaining agreement.

The said article establishes a rule of liability, not suability. The government
may be held liable under this rule only if it first allows itself to be sued
through any of the accepted forms of consent.
Moreover, the agent performing his regular functions is not a special agent
even if he is so denominated, as in the case at bar. No less important, the
said provision appears to regulate only the relations of the local state with its
inhabitants and, hence, applies only to the Philippine government and not to
foreign governments impleaded in our courts.

From these circumstances, the Court can assume that the restaurant
services offered at the John Hay Air Station partake of the nature of a
business enterprise undertaken by the United States government in its
proprietary capacity. Such services are not extended to the American
servicemen for free as a perquisite of membership in the Armed Forces of
the United States. Neither does it appear that they are exclusively offered to
these servicemen; on the contrary, it is well known that they are available to
the general public as well, including the tourists in Baguio City, many of
whom make it a point to visit John Hay for this reason. All persons availing
themselves of this facility pay for the privilege like all other customers as in
ordinary restaurants. Although the prices are concededly reasonable and
relatively low, such services are undoubtedly operated for profit, as a
commercial and not a governmental activity.

We reject the conclusion of the trial court that the answer filed by the special
counsel of the Office of the Sheriff Judge Advocate of Clark Air Base was a
submission by the United States government to its jurisdiction. As we noted
in Republic v. Purisima, 25 express waiver of immunity cannot be made by a
mere counsel of the government but must be effected through a dulyenacted statute. Neither does such answer come under the implied forms of
consent as earlier discussed.
But even as we are certain that the individual petitioners in G.R. No. 80018
were acting in the discharge of their official functions, we hesitate to make
the same conclusion in G.R. No. 80258. The contradictory factual allegations
in this case deserve in our view a closer study of what actually happened to
the plaintiffs. The record is too meager to indicate if the defendants were
really discharging their official duties or had actually exceeded their authority
when the incident in question occurred. Lacking this information, this Court
cannot directly decide this case. The needed inquiry must first be made by
the lower court so it may assess and resolve the conflicting claims of the
parties on the basis of the evidence that has yet to be presented at the trial.

The consequence of this finding is that the petitioners cannot invoke the
doctrine of state immunity to justify the dismissal of the damage suit against
them by Genove. Such defense will not prosper even if it be established that
they were acting as agents of the United States when they investigated and
later dismissed Genove. For that matter, not even the United States
government itself can claim such immunity. The reason is that by entering
into the employment contract with Genove in the discharge of its proprietary
functions, it impliedly divested itself of its sovereign immunity from suit.

47

But these considerations notwithstanding, we hold that the complaint against

the petitioners in the court below must still be dismissed. While suable, the
petitioners are nevertheless not liable. It is obvious that the claim for
damages cannot be allowed on the strength of the evidence before us,
which we have carefully examined.

The Court would have directly resolved the claims against the defendants as
we have done in G.R. No. 79470, except for the paucity of the record in the
case at hand. The evidence of the alleged irregularity in the grant of the
barbershop concessions is not before us. This means that, as in G.R. No.
80258, the respondent court will have to receive that evidence first, so it can
later determine on the basis thereof if the plaintiffs are entitled to the relief
they seek. Accordingly, this case must also be remanded to the court below
for further proceedings.

The dismissal of the private respondent was decided upon only after a
thorough investigation where it was established beyond doubt that he had
polluted the soup stock with urine. The investigation, in fact, did not stop
there. Despite the definitive finding of Genove's guilt, the case was still
referred to the board of arbitrators provided for in the collective bargaining
agreement. This board unanimously affirmed the findings of the investigators
and recommended Genove's dismissal. There was nothing arbitrary about
the proceedings. The petitioners acted quite properly in terminating the
private respondent's employment for his unbelievably nauseating act. It is
surprising that he should still have the temerity to file his complaint for
damages after committing his utterly disgusting offense.

IV
There are a number of other cases now pending before us which also
involve the question of the immunity of the United States from the jurisdiction
of the Philippines. This is cause for regret, indeed, as they mar the traditional
friendship between two countries long allied in the cause of democracy. It is
hoped that the so-called "irritants" in their relations will be resolved in a spirit
of mutual accommodation and respect, without the inconvenience and
asperity of litigation and always with justice to both parties.

Concerning G.R. No. 76607, we also find that the barbershops subject of the
concessions granted by the United States government are commercial
enterprises operated by private person's. They are not agencies of the
United States Armed Forces nor are their facilities demandable as a matter
of right by the American servicemen. These establishments provide for the
grooming needs of their customers and offer not only the basic haircut and
shave (as required in most military organizations) but such other amenities
as shampoo, massage, manicure and other similar indulgences. And all for a
fee. Interestingly, one of the concessionaires, private respondent Valencia,
was even sent abroad to improve his tonsorial business, presumably for the
benefit of his customers. No less significantly, if not more so, all the
barbershop concessionaires are under the terms of their contracts, required
to remit to the United States government fixed commissions in consideration
of the exclusive concessions granted to them in their respective areas.

WHEREFORE, after considering all the above premises, the Court hereby
renders judgment as follows:
1. In G.R. No. 76607, the petition is DISMISSED and the
respondent judge is directed to proceed with the hearing
and decision of Civil Case No. 4772. The temporary
restraining order dated December 11, 1986, is LIFTED.
2. In G.R. No. 79470, the petition is GRANTED and Civil
Case No. 829-R(298) is DISMISSED.
3. In G.R. No. 80018, the petition is GRANTED and Civil
Case No. 115-C-87 is DISMISSED. The temporary
restraining order dated October 14, 1987, is made
permanent.

This being the case, the petitioners cannot plead any immunity from the
complaint filed by the private respondents in the court below. The contracts
in question being decidedly commercial, the conclusion reached in
the United States of America v. Ruiz case cannot be applied here.

4. In G.R. No. 80258, the petition is DISMISSED and the

respondent court is directed to proceed with the hearing

48

and decision of Civil Case No. 4996. The temporary

restraining order dated October 27, 1987, is LIFTED.

Republic of the Philippines

SUPREME COURT
Manila

All without any pronouncement as to costs.

SECOND DIVISION
SO ORDERED.
G.R. No. 90314
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and
Regalado, JJ., concur.

November 27, 1990

LOIDA Q. SHAUF and JACOB SHAUF, Petitioners,

vs.
HON. COURT OF APPEALS, DON E. DETWILER and ANTHONY
PERSI, Respondents.
REGALADO, J.:
In this petition for review on certiorari, petitioners would have us reverse and
set aside the decision rendered by respondent Court of Appeals on August
22, 1989, in CA-G.R. CV No. 17932, entitled "Loida Shauf and Jacob Shauf,
Plaintiffs-Appellants, versus Don Detwiler and Anthony Persi, DefendantsAppellants,"1 dismissing petitioners complaint for damages filed before the
Regional Trial Court, Branch LVI, Angeles City, in Civil Case No. 2783
thereof, and its subsequent resolution denying petitioners motion for the
reconsideration of its aforesaid decision.
As found by respondent court,2 Clark Air Base is one of the bases
established and maintained by the United States by authority of the
agreement between the Philippines and the United States concerning
military bases which entered into force on March 26, 1947.
The Third Combat Support Group, a unit of Clark Air Base, maintains a
Central Civilian Personnel Office (CCPO) charged with the responsibility for
civilian personnel management and administration. It is through its civilian
personnel officer that the base commander is responsible for direction and
administration of civilian personnel program, including advising management
and operating officials on civilian personnel matters. Acting for the
commander, the civilian personnel officer is the administrative official in
charge of the activities of the CCPO, and the commander relies on him to
carry out all aspects of the civilian personnel program. The CCPO personnel

49

program encompasses placement and staffing, position management and

classification.

On or about October 1976, the position of Guidance Counselor, GS 1710-9,

became vacant in the Base Education Office, Clark Air Base. A standard
Form 52 was submitted to the Civilian Personnel Office to fill said position.
The Civilian Personnel Division took immediate steps to fill the position by
advertisement in the Clark Air Base Daily Bulletin #205 dated October 21,
1976. As a result of the advertisement, one application was received by the
Civilian Personnel Office and two applications were retrieved from the
applicants supply file in the Civilian Personnel Office. These applications
were that of Mrs. Jean Hollenshead, an employee of the DOD Schools at
Clark Air Base, Mrs. Lydia B. Gaillard, an unemployed dependent, and Mrs.
Loida Q. Shauf. All three applications were reviewed and their experiences
were considered qualifying for the advertised position.

The Third Combat Support Group also maintains an Education Branch,

Personnel Division, which provides an education program for military
personnel, U.S. civilian employees, and adult dependents, assigned or
attached to Clark Air Base. Its head, the education director, is responsible
directly to the base director of personnel for administering the education
services program for Clark Air Base. In this capacity, and within broad
agency policies, is delegated to him the full responsibility and authority for
the technical, administrative and management functions of the program. As
part of his duties, the education director provides complete academic and
vocational guidance for military dependents, including counseling, testing
and test interpretation. During the time material to the complaint, private
respondent Don Detwiler was civilian personnel officer, while private
respondent Anthony Persi was education director.3

On November 11, 1976, the application of Loida Q. Shauf was referred to

Mr. Anthony Persi, with the applications of Mrs. Jean Hollenshead and Mrs.
Lydia Gaillard, to be considered for the position of Guidance Counselor, GS
1710-9, Mr. Persi, after review of the applications, stated that upon
screening the applications he concluded that two applicants had what he
considered minimum qualifications for the position. The two applicants were
Mrs. Hollenshead and Mrs. Gaillard. In the case of Loida Q. Shauf, Mr. Persi
felt that her application was quite complete except for a reply to an inquiry
form attached to the application. This inquiry form stated that the National
Personnel Records Center, St. Louis, Missouri, was unable to find an official
personnel folder for Loida Q. Shauf. Mr. Persi said that as a result of the
National Personnel Records Center, GSA, not being able to find any records
on Loida Q. Shauf, this raised some questions in his mind as to the validity
of her work experience. As a result of his reservations on Loida Q. Shaufs
work experience and his conclusions that the two other applications listed
minimum qualifications, Mr. Persi decided to solicit additional names for
consideration.

Petitioner Loida Q. Shauf, a Filipino by origin and married to an American

who is a member of the United States Air Force, applied for the vacant
position of Guidance Counselor, GS17109, in the Base Education Office at
Clark Air Base, for which she is eminently qualified. As found by the trial
court, she received a Master of Arts degree from the University of Sto.
Tomas, Manila, in 1971 and has completed 34 semester hours in
psychology-guidance and 25 quarter hours in human behavioral science;
she has also completed all course work in human behavior and counseling
psychology for a doctoral degree; she is a civil service eligible; and, more
importantly, she had functioned as a Guidance Counselor at the Clark Air
Base at the GS 1710-9 level for approximately four years at the time she
applied for the same position in 1976.4
By reason of her non-selection to the position, petitioner Loida Q. Shauf filed
an equal employment opportunity complaint against private respondents, for
alleged discrimination against the former by reason of her nationality and
sex. The controversy was investigated by one Rudolph Duncan, an appeals
and grievance examiner assigned to the Office of Civilian Personnel
Operations, Appellate Division, San Antonio, Texas, U.S.A. and what follows
are taken from his findings embodied in a report duly submitted by him to the
Equal Opportunity Officer on February 22, 1977.5

Subsequently in his correspondence dated November 12, 1976, Mr. Persi

returned the three applications to the Civilian Personnel Office without a
selection decision. Mr. Persi also requested in his correspondence that the
Civilian Personnel Office initiate immediate inquiry to the Central Oversea
Rotation and Recruiting Office (CORRO) for the submission of a list of highly
qualified candidates. He further stated in his correspondence that the three
applicants who had indicated an interest would be considered with the
CORRO input for selection.

50

As a result of Mr. Persis request, an AF Form 1188 "Oversea Civilian

Personnel Request" was submitted to CORRO on November 12, 1976. This
request in fact asked for one Guidance Counselor, GS 1710-9. The form
listed the fact that local candidates are available. However, instead of getting
a list of candidates for consideration, Mr. Persi was informed by CORRO,
through the Civilian Personnel Office in their December 15, 1976 message
that a Mr. Edward B. Isakson from Loring AFB, Maine, was selected for the
position. Mr. Persi stated, when informed of CORROs selection, that he had
heard of Mr. Isakson and, from what he had heard, Mr. Isakson was highly
qualified for the position; therefore, he wished to have the selection stand.
This statement was denied by Mr. Persi. Mr. Isakson was placed on the rolls
at Clark Air Base on January 24, 1977.6

Contrary to her expectations, petitioner Loida Q. Shauf was never appointed

to the position occupied by Mrs. Abalateo whose appointment was extended
indefinitely by private respondent Detwiler.9
Feeling aggrieved by what she considered a shabby treatment accorded her,
petitioner Loida Q. Shauf wrote the U.S. Civil Service Commission
questioning the qualifications of Edward Isakson. Thereafter, said
commission sent a communication addressed to private respondent
Detwiler,10 finding Edward Isakson not qualified to the position of Guidance
Counselor, GS 1710-9, and requesting that action be taken to remove him
from the position and that efforts be made to place him in a position for
which he qualifies. Petitioner Loida Q. Shauf avers that said
recommendation was ignored by private respondent Detwiler and that
Isakson continued to occupy said position of guidance counselor.

Said examiner, however, also stated in his findings that, by reason of

petitioner Loida Q. Shaufs credentials which he recited therein, she is and
was at the time of the vacancy,7 highly qualified for the position of Guidance
Counselor, GS 1710-9. In connection with said complaint, a Notice of
Proposed Disposition of Discrimination Complaint, dated May 16, 1977,8 was
served upon petitioner Loida Q. Shauf stating that because the individual
selected did not meet the criteria of the qualification requirements, it was
recommended "that an overhire GS 1710-9 Assistant Education Advisor
position be established for a 180 day period. x x x. The position should be
advertised for local procurement on a best qualified basis with the stipulation
that if a vacancy occurs in a permanent GS 1710-9 position the selectee
would automatically be selected to fill the vacancy. If a position is not
vacated in the 180 day period the temporary overhire would be released but
would be selected to fill a future vacancy if the selectee is available."

Petitioner Loida Q. Shauf likewise wrote the Base Commander of Clark Air
Base requesting a hearing on her complaint for discrimination.
Consequently, a hearing was held on March 29, 1978 before the U.S.
Department of Air Force in Clark Air Base.11
Before the Department of Air Force could render a decision, petitioner Loida
Q. Shauf filed a complaint for damages, dated April 27, 1978, against private
respondents Don Detwiler and Anthony Persi before the Regional Trial
Court, Branch LVI at Angeles City, docketed as Civil Case No. 2783, for the
alleged discriminatory acts of herein private respondents in maliciously
denying her application for the GS 1710-9 position.
Private respondents, as defendants in Civil Case No. 2783, filed a motion to
dismiss on the ground that as officers of the United States Armed Forces
performing official functions in accordance with the powers vested in them
under the Philippine-American Military Bases Agreement, they are immune
from suit. The motion to dismiss was denied by the trial court. A motion for
reconsideration was likewise denied.

During that time, private respondents already knew that a permanent GS

1710-9 position would shortly be vacant, that is, the position of Mrs. Mary
Abalateo whose appointment was to expire on August 6, 1977 and this was
exactly what private respondent Detwiler had in mind when he denied on
June 27, 1977 Mrs. Abalateos request for extension of March 31, 1977.
However, private respondents deny that Col. Charles J. Corey represented
to petitioner Loida Q. Shauf that she would be appointed to the overhire
position and to a permanent GS 1710-9 position as soon as it became
vacant, which allegedly prompted the latter to accept the proposed
disposition.

Consequently, private respondents filed an Answer reiterating the issue of

jurisdiction and alleging, inter alia, that defendant Persis request to Central
Oversea Rotation and Recruiting Office (CORRO) was not for appointment
of a person to the position of Guidance Counselor, GS 1710-9, but for

51

referrals whom defendant Persi would consider together with local

candidates for the position; that the extension of the employment of Mrs.
Abalato was in accordance with applicable regulation and was not related to
plaintiff Loida Q. Shaufs discrimination complaint; that the decision was a
joint decision of management and CCPO reached at a meeting on June 29,
1977 and based on a letter of the deputy director of civilian personnel,
Headquarters Pacific Air Forces, dated June 15, 1977; and that the ruling
was made known to and amplified by the director and the deputy director of
civilian personnel in letters to petitioner Loida Q. Shauf dated August 30,
1977 and September 19, 1977.

other agreements which provide for preferential treatment for local

nationals."
And Air Force Regulation 40-301 dated 12 May 1976 in par. 2 c (1) thereof
provides that"c. Selection or Referral of Eligible Applicants From the 50 States:
(1)CORRO makes selection, except as provided in (3) below, for
oversea positions of Grades GS-11 and below (and wage grade
equivalents) for which it has received an AF Form 1188, and for
higher grade positions if requested by the oversea activity."12

The parties submitted a Partial Stipulation of Facts in the court a

quo providing, in part, as follows:

Likewise, a Supplement to Partial Stipulation of Facts was filed by the

parties on October 6, 1978, which reads:

a) In October 1976, the position of guidance counselor, GS-1710-9,

at Clark Air Base was vacant;

1. Under date of 30 September 1978, plaintiff Loida Q. Shauf through her

counsel, Quasha Asperilla Ancheta Valmonte Pea & Marcos, lodged an
appeal before the Civil Service Commission, Appeals Review Board, from
the decision of the Secretary of the Air Force dated 1 September 1978
affirming the EEO Complaints Examiners Findings and Recommended
Decision in the Discrimination Complaint of Mrs. Loida Q. Shauf, No. SF
071380181 dated 3 July 1978, x x x;

b) Plaintiff Loida Q, Shauf, a qualified dependent locally available,

was among those who applied for said vacant position of guidance
counselor, GS-1710-9;
c) Plaintiff Loida Q. Shauf at the time she filed her aforesaid
application was qualified for the position of guidance counselor,
GS-1710-9;

2. The aforesaid appeal has not been decided up to now by the Civil Service
Commission, Appeals Review Board; and

d) Civilian Personnel Office accomplished and forwarded to

CORRO an AF Form 1188 covering the position of guidance
counselor, GS-1710-9, applied for by plaintiff Loida Q. Shauf;

3. Plaintiff Loida Q. Shauf has not instituted any action before any federal
district court of the United States impugning the validity of the decision of the
Secretary of the Air Force dated 1 September 1978 affirming the EEO
Complaints Examiners Findings and Recommended Decision in the
Discrimination Complaint of Mrs. Loida Q. Shauf, No. SF 071380181 dated 3
July 1978.13

e) U.S. Department of Defense Instructions (DODI) No. 1400.23

under Policy and Procedures provides that"Where qualified dependents of military or civilian personnel of the
Department of Defense are locally available for appointment to positions in
foreign areas which are designated for U.S. citizen occupancy and for which
recruitment outside the current work force is appropriate, appointment to the
position will be limited to such dependents unless precluded by treaties or

Thereafter, on March 8, 1988, the trial court rendered judgment in favor of

herein petitioner Loida Q. Shauf, the dispositive portion of which reads:

52

WHEREFORE, judgment is hereby rendered ordering the defendants jointly

and severally to pay the plaintiffs:

States Armed Forces, are immune from suit for acts done or
statements made by them in the performance of their official
governmental functions in accordance with the powers possessed
by them under the Philippine-American Military Bases Agreement of
1947, as amended;

1) The amount $39,662.49 as actual damages or its equivalent in

Philippine pesos in October 1976 as reported by the Central Bank
of the Philippines or any authorized agency of the Government;

2. The trial court erred in not dismissing the complaint for a) nonexhaustion of administrative remedies; and b) lack of jurisdiction of
the trial court over the subject matter of the case in view of the
exclusive jurisdiction of an appropriate U.S. District Court over an
appeal from an agency decision on a complaint of discrimination
under the U.S. Federal Law on Equality of opportunity for civilian
employees;

2) The amount of P100,000.00 as moral and exemplary damages;

3) Twenty (20%) percent of $39,662.49 or its equivalent in
Philippine Pesos in October 1976 as reported by the Central Bank
of the Philippines or any authorized agency of the Government, as
attorneys gees, and;

3. The trial court erred in holding that plaintiff-appellant Loida Q.

Shauf was refused appointment as guidance counselor by the
defendants-appellants on account of her six (female), color (brown),
and national origin (Filipino by birth) and that the trial court erred in
awarding damages to plaintiffs-appellants.16

4) Cost(s) of suit.
SO ORDERED.14
Both parties appealed from the aforecited decision to respondent Court of
Appeals.

As stated at the outset, respondent Court of Appeals reversed the decision

of the trial court, dismissed herein petitionerscomplaint and denied their
motion for reconsideration. Hence this petition, on the basis of he following
grounds:

In their appeal, plaintiffs-appellants (herein petitioners) raised the following

assignment of errors:
1. Lower court gravely erred in holding that the actual and
exemplary damages and attorneys fees may be paid in Philippine
Pesos based on the exchange rate prevailing during October 1976
as determined by the Central Bank;

The respondent Honorable Court of Appeals has decided a question of

substance not in accord with law and/or with applicable decisions of this
Honorable Court. Respondent court committed grave error in dismissing
plaintiffs-appellants complaint and-

2. Lower court gravely erred in limiting the amount of moral and

exemplary damages recoverable by plaintiff to P100,000.0015

(a) in holding that private respondents are immune from suit for
discriminatory acts performed without or in excess of, their authority
as officers of the U.S. Armed Forces;

On the other hand, defendants-appellants (private respondents herein)

argued that:

(b) for applying the doctrine of state immunity from suit when it is
clear that the suit is not against the U.S. Government or its Armed
Forces; and

1. The trial court erred in not dismissing the complaint on the

ground that defendants-appellants, as officers/officials of the United

53

(c) for failing to recognize the fact that the instant action is a pure
and simple case for damages based on the discriminatory and
malicious acts committed by private respondents in their individual
capacity who by force of circumstance and accident are officers of
the U.S. Armed Forces, against petitioner Loida Shauf solely on
account of the latters sex (female), color (brown), and national
origin (Filipino).17

While the doctrine appears to prohibit only suits against the state without its
consent, it is also applicable to complaints filed against officials of the state
for acts allegedly performed by them in the discharge of their duties. The
rule is that if the judgment against such officials will require the state itself to
perform an affirmative act to satisfy the same, such as the appropriation of
the amount needed to pay the damages awarded against them, the suit
must be regarded as against the state itself although it has been formally
impleaded.19 It must be noted, however, that the rule is not also allencompassing as to be applicable under all circumstances.

Petitioners aver that private respondents are being sued in their private
capacity for discriminatory acts performed beyond their authority, hence the
instant action is not a suit against the United States Government which
would require its consent.

It is a different matter where the public official is made to account in his

capacity as such for acts contrary to law and injurious to the rights of
plaintiff. As we clearly set forth by Justice Zaldivar in Director of the Bureau
of Telecommunications, et al. Vs. Aligaen, etc., et al.:20 "Inasmuch as the
State authorizes only legal acts by its officers, unauthorized acts of
government officials or officers are not acts of the State, and an action
against the officials or officers by one whose rights have been invaded or
violated by such acts, for the protection of his rights, is not a suit against the
State within the rule of immunity of the State from suit. In the same tenor, it
has been said that an action at law or suit in equity against a State officer or
the director of a State department on the ground that, while claiming to act
for the State, he violates or invades the personal and property rights of the
plaintiff, under an unconstitutional act or under an assumption of authority
which he does not have, is not a suit against the State within the
constitutional provision that the State may not be sued without its
consent."21 The rationale for this ruling is that the doctrine of state immunity
cannot be used as an instrument for perpetrating an injustice.22

Private respondents, on the other hand, claim that in filing the case,
petitioners sought a judicial review by a Philippine court of the official
actuations of respondents as officials of a military unit of the U.S. Air Force
stationed at Clark Air Base. The acts complained of were done by
respondents while administering the civil service laws of the United States.
The acts sued upon being a governmental activity of respondents, the
complaint is barred by the immunity of the United States, as a foreign
sovereign, from suit without its consent and by the immunity of the officials of
the United States armed forces for acts committed in the performance of
their official functions pursuant to the grant to the United States armed
forces of rights, power and authority within the bases under the Military
Bases Agreement. It is further contended that the rule allowing suits against
public officers and employees for unauthorized acts, torts and criminal acts
is a rule of domestic law, not of international law. It applies to cases involving
the relations between private suitors and their government or state, not the
relations between one government and another from which springs the
doctrine of immunity of a foreign sovereign.

In the case of Baer, etc. vs. Tizon, etc., et al.,23 it was ruled that:
There should be no misinterpretation of the scope of the decision reached by
this Court. Petitioner, as the Commander of the United States Naval Base in
Olongapo, does not possess diplomatic immunity. He may therefore be
proceeded against in his personal capacity, or when the action taken by him
cannot be imputed to the government which he represents.

I. The rule that a state may not be sued without its consent, now expressed
in Article XVI, Section 3, of the 1987 Constitution, is one of the generally
accepted principles of international law that we have adopted as part of the
law of our land under Article II, Section 2. This latter provision merely
reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and
also intended to manifest our resolve to abide by the rules of the
international community.18

Also, in animos, et al. Vs. Philippine Veterans Affairs Office, et al.,24 we held
that:

54

"x x x it is equally well-settled that where a litigation may have adverse

consequences on the public treasury, whether in the disbursements of funds
or loss of property, the public official proceeded against not being liable in his
personal capacity, then the doctrine of non-suability may appropriately be
invoked. It has no application, however, where the suit against such a
functionary had to be instituted because of his failure to comply with the duty
imposed by statute appropriating public funds for the benefit of plaintiff or
petitioner. x x x.

She is a female, brown in color and a Filipino by origin, although married to

an American who is a member of the United States Air Force. She is
qualified for the vacant position of Guidance Counselor in the office of the
education director at Clark Air Base. She received a Master of Arts Degree
from the University of Santo Tomas, Manila, in 1971 and has completed 34
semester hours in psychology-guidance and 25 quarter hours in human
behavioral science. She has also completed all course work in human
behavior and counseling psychology for a doctoral degree. She is a civil
service eligible. More important, she had functioned as a Guidance
Counselor at the Clark Air Base at the GS-1710-9 level for approximately
four years at the time she applied for the same position in 1976.

The aforecited authorities are clear on the matter. They state that the
doctrine of immunity from suit will not apply and may not be invoked where
the public official is being sued in his private and personal capacity as an
ordinary citizen. The cloak of protection afforded the officers and agents of
the government is removed the moment they are sued in their individual
capacity. This situation usually arises where the public official acts without
authority or in excess of the powers vested in him. It is a well-settled
principle of law that a public official may be liable in his personal private
capacity for whatever damage he may have caused by his act done with
malice and in bad faith, or beyond the scope of his authority or jurisdiction.25

In filling the vacant position of Guidance Counselor, defendant Persi did not
even consider the application of plaintiff Loida Q. Shauf, but referred the
vacancy to CORRO which appointed Edward B. Isakson who was not
eligible to the position.
In defending his act, defendant Persi gave as his excuse that there was a
question in his mind regarding validity of plaintiff Loida Q. Shaufs work
experience because of lack of record. But his assertion is belied by the fact
that plaintiff Loida Q. Shauf had previously been employed as Guidance
Counselor at the Clark Air Base in 1971 and this would have come out if
defendant Persi had taken the trouble of interviewing her. Nor can defendant
free himself from any blame for the non-appointment of plaintiff Loida Q.
Shauf by claiming that it was CORRO that appointed Edward B. Isakson.
This would not have happened if defendant Persi adhered to the regulation
that limits the appointment to the position of Guidance Counselor, GS-17109 to qualified dependents of military personnel of the Department of Defense
who are locally available like the plaintiff Loida Q. Shauf. He should not have
referred the matter to CORRO. Furthermore, defendant Persi should have
protested the appointment of Edward B. Isakson who was ineligible for the
position. He, however, remained silent because he was satisfied with the
appointment.

The agents and officials of the United States armed forces stationed in Clark
Air Base are no exception to this rule. In the case of United States of
America, et al. Vs. Guinto, etc., et al., ante,26 we declared:
It bears stressing at this point that the above observation do not confer on
the United States of America blanket immunity for all acts done by it or its
agents in the Philippines. Neither may the other petitioners claim that they
are also insulated from suit in this country merely because they have acted
as agents of the United States in the discharge of their official functions.
II. The court below, in finding that private respondents are guilty of
discriminating against petitioner Loida Q. Shauf on account of her sex, color
and origin, categorically emphasized that:

Likewise, the acts of the defendant Detwiler in rejecting the appointment of

plaintiff Loida Q. Shauf were undoubtedly discriminatory.

There is ample evidence to sustain plaintiffs complaint that plaintiff Loida Q.

Shauf was refused appointment as Guidance Counselor by the defendants
on account of her sex, color and origin.

55

Plaintiff Loida Q. Shauf twice applied for the position of Guidance Counselor
sometime in 1975 and in October 1978. Although she was qualified for the
postision, her appointment was rejected ny the defendant Detwiler. The two
who were appointed, a certain Petrucci and Edward B. Isakson, were
ordered removed by the U.S. Civil Service Commission. Instead of replacing
Petrucci with the plaintiff Loida Q. Shauf, the defendant Detwiler had the
position vacated by Petrucci abolished. And in the case of Edward Isakson,
the defendant Detwiler ignored the order of the U.S. Civil Service
Commission to have him removed according to the testimony of plaintiff
Loida Q. Shauf.

While Col. Corey characterized the act of defendant Persi as sloppy and
recommend that he be reprimanded. In any event their findings and
conclusions are not binding with this Court.
To blunt the accusation of discrimination against them, defendants
maintained that the extension of the appointment of Mrs. Mary Abalateo was
a joint decision of management and Central Civilian Personnel Office, Clark
Air Base. Nonetheless, having earlier rejected by himself the request for
extension of the services of Mrs. Mary Abalateo, defendant Detwiler should
not have concurred to such an extension as the reversal of his stand gave
added substance to the charge of discrimination against him.

In connection with her complaint against the defendants, plaintiff Loida Q.

Shauf was presented a Notice of Proposed Disposition of her Discrimination
Complaint by Col. Charles J. Corey, Vice Commander, Third Combat
Support Group, Clark Air Base, which would entitle her to a temporary
appointment as Guidance Counselor with the implied assurance that she
would be appointed in a permanent capacity in the event of a vacancy.

To further disprove the charge that the defendants discriminated against

plaintiff Loida Q. Shauf for her non-appointment as Guidance Counselor on
account of her being a Filipino and a female, counsel for the defendants
cited the following: (1) that Mrs. Mary Abalateo whose appointment was
extended by the defendant Detwiler is likewise a female and a Filipino by
origin; (2) that there are Filipinos employed in the office of the defendant
Persi; and (3) that there were two other women who applied in 1976 with the
plaintiff Loida Q. Shauf for the position of Guidance Counselor.

At the time of the issuance of said Notice, defendants knew that there would
be a vacancy in a permanent position as Guidance Counselor occupied by
Mrs. Mary Abalateo and it was understood between Col. Corey and plaintiff
Loida Q. Shauf that this position would be reserved for her. Knowing this
arrangement, defendant Detwiler rejected the request for extension of
services of Mrs. Mary Abalateo. However, after plaintiff Loida Q. Shauf
consented to the terms of the Notice of Proposed Disposition of her
Discrimination Complaint, defendant Detwiler extended the services of Mrs.
Mary Abalateo indefinitely. This act barred plaintiff Loida Q. Shauf from
applying for the position of Mrs. Mary Abalateo.

The contention of the defendants based on the allegations enumerated in

Nos. 1 and 2 of the preceding paragraph is without merit as there is no
evidence to show that Mrs. Mary Abalateo and the Filipinos in the office of
the defendant Persi were appointed by the defendants. Moreover, faced with
a choice between plaintiff Loida Q. Shauf or Mrs. Mary Abalateo, it was to be
expected that defendant Detwiler chose to retain Mrs. Mary Abalateo as
Guidance Counselor in retaliation for the complaint of discrimination filed
against him by plaintiff Loida Q. Shauf. Finally, as to the contention based on
the allegation in No. 3 of the preceding paragraph that there were two other
women applicants in 1976 with plaintiff Loida Q. Shauf, the record reveals
that they had minimum qualifications unlike plaintiff Loida Q. Shauf who was
highly qualified.27

To rebut the evidence of the plaintiffs, defendant cited the findings and
conclusions of Mr. Rudolph Duncan, who was appointed to investigate
plaintiff Loida Q. Shaufs complaint for discrimination and Col. Charles J.
Corey, Vice Commander, Third Combat Support Group that defendants were
not guilty of Discrimination.

Elementary is the rule that the conclusions and findings of fact of the trial
court are entitled to great weight on appeal and should not be disturbed
unless for strong and cogent reasons.28 Absent any substancial proof,
therefore, that the trial courts decision was grounded entirely on

It is pointed out, however, that Mr. Rudolph Duncan found plaintiff loida Q.
Shauf to be highly qualified for the position of Guidance Counselor at the
GS-1710-9 level and that management should have hired a local applicant.

56

speculations, surmises or conjectures, the same must be accorded full

consideration and respect. This should be so because the trial court is, after
all, in a much better position to observe and correctly appreciate the
respective parties evidence as they were presented.29

1. Notice of Proposed Disposition of Discrimination Complaint, dated May

16, 1977 (Exhibit "G").
B. Mr. Anthony Persi was totally inept in the recruitment practices employed
in attempting on fill the GS 1710-9 Assistant Education applicable DOD
regulations. In addition, he failed to conduct an interview of qualified
personnel in the local environment and when the qualifications of the
complainant (sic) were questioned by Mr. Persi he did not request a review
by the CCPO nor request an interview with the complainant (sic). Mr. Persi
failed to follow Department of Defense Instructions Number 1400.23, under
Policy and Procedures which states-"Where qualified dependents of military
or civilian personnel of the Department of Defense are locally available for
appointment to positions in foreign areas which are designated for US citizen
occupancy and for which recruitment outside the current work force is
appropriate, appointment to the positions will be limited to such dependents
unless precluded by treaties or other agreements which provide for
preferential treatment for local nationals." Attachment to Air Force
Supplement to FFM 213.2106 (b) (6) lists the positions of Guidance
Counsellor, GS 1710-9, as positions to be filled by locally available
dependents. An added point is the lack of qualifications of the individual
selected for the GS 1710-9 positions as outlined under X-118 Civil Service
Handbook. x x x31

In the case at bar, there is nothing in the record which suggests any
arbitrary, irregular or abusive conduct or motive on the part of the trial judge
in ruling that private respondents committed acts of discrimination for which
they should be held personally liable. His conclusion on the matter is
sufficiently borne out by the evidence on record. We are thus constrained to
uphold his findings of fact.
Respondent Court of Appeals, in its questioned decision, states that private
respondents did, in fact, discriminate against petitioner Loida Q. Shauf.
However, it deemed such acts insufficient to prevent an application of the
doctrine of state immunity, contrary to the findings made by the trial court. It
reasons out that "the parties invoked are all American citizens (although
plaintiff is a Filipina by origin) and the appointment of personnel inside the
base is clearly a sovereign act of the United States. This is an internal affair
in which we cannot interfere without having to touch some delicate
constitutional issues."30 In other words, it believes that the alleged
discriminatory acts are not so grave in character as would justify the award
of damages.

2. Letter of the Director of the U.S. Civil Service Commission, San Francisco
Region, dated October 27, 1977, addressed to Mr. Don Detwiler, concerning
Mr. Edward B. Isakson whose file was reviewed by the Commission (Exhibit
"K").

In view of the apparent discrepancy between the findings of fact of

respondent Court of Appeals and the trial court, we are tasked to review the
evidence in order to arrive at the correct findings based on the record. A
consideration of the evidence presented supports our view that the court a
quo was correct in holding herein private respondents personally liable and
in ordering the indemnification of petitioner Loida Q. Shauf. The records are
clear that even prior to the filing of the complaint in this case, there were
various reports and communications issued on the matter which, while they
make no categorical statement of the private respondents liability,
nevertheless admit of facts from which the intent of private respondents to
discriminate against Loida Q. Shauf is easily discernible. Witness the
following pertinent excerpts from the documents extant in the folder of
Plaintiffs Exhibits:

The position of Guidance Counsellor is one for which the Commission has
established a mandatory education requirement that may not be waived. An
individual may not be assigned to such a position without meeting the
minimum qualification requirements. The requirements, as given in
Handbook X-118, are completion of all academic requirements for a
bachelors degree from an accredited college or university and successful
completion of a teacher education program under an "approved program" or
successful completion of required kinds of courses.

57

On review of his record, we find that Mr. Isakson has a bachelors degree but
he does not show completion of a teacher education program. To qualify for
Guidance Counselor on the basis of coursework and semester hour credit,
he would need to have 24 semester hours in Education and 12 semester
hours in a combination of Psychology and Guidance subjects directly related
to education. We do not find that he meets these requirements.

4. It is my understanding that Mrs. Shauf has filed a formal EEO

complaint. While I am convinced that there was no discrimination in
this case, my experience with EEO complaints teaches me that, if
Civil Service Commission finds that nonselection resulted from any
kind of management malpractice, it is prone to brand it as a
"discriminatory practice." This usually results in a remedial order
which can often be distasteful to management. x x x.33

xxx
The initial burden is on the plaintiff to establish a prima facie case or
discrimination. Once the discriminatory act is proven, the burden shifts to the
defendant to articulate some legitimate, undiscriminatory reason for the
plaintiffs rejection.34 Any such justification is wanting in the case at bar,
despite the prima facie case for petitioner Loida Q. Shauf. Private
respondents defense is based purely on outright denials which are
insufficient to discharge theonus probandi imposed upon them. They equally
rely on the assertion that they are immune from suit by reason of their official
functions. As correctly pointed out by petitioners in their Memorandum, the
mere invocation by private respondents of the official character of their
duties cannot shield them from liability especially when the same were
clearly done beyond the scope of their authority, again citing
the Guinto, case, supra:

We can appreciate the fact that Mr. Isakson may be working toward meeting
the Guidance Counselor requirements. Nonetheless, he does not appear to
meet them at this time. We must, therefore, request that action be taken to
remove him from the position and that efforts be made to place him in a
position for which he qualifies.32
3. Letter of the Staff Judge Advocate of the Department of the Airforce
addressed to Mr. Detwiler, dated January 25, 1977 (Exhibit "L").
1. The attached memo from Captain John Vento of this office is
forwarded for your review and any action you deem appropriate. I
concur with his conclusion that there is no evidence of sex or ethnic
bias in this matter. I also concur, however, that there were certain
irregularities in the handling of this selection.

The other petitioners in the case before us all aver they have acted in the
discharge of their official functions as officers or agents of the United States.
However, this is a matter of evidence. The charges against them may not be
summarily dismissed on their mere assertion that their acts are imputable to
the United States of America, which has not given its consent to be sued. In
fact, the defendants are sought to be held answerable for personal torts in
which the United States itself is not involved. If found liable, they and they
alone must satisfy the judgment.

xxx
3. Considering the above, it is most unfortunate that the filing of this
latest Guidance Counselor vacancy was not handled wholly in
accordance with prescribed policies and regulations. This is not to
suggest that Mrs. Shauf should necessarily have been hired. But,
she and other qualified candidates should have been given the
consideration to which they were entitled. (At no time now or in the
past have Mrs. Shaufs qualifications ever been questioned.) Had
that happened and management chose to select some qualified
candidate other than Mrs. Shauf, there would be no basis for her
complaint.

III. Article XIII, Section 3, of the 1987 Constitution provides that the State
shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all. This is a carry-over from Article II, Section 9, of the 1973
Constitution ensuring equal work opportunities regardless of sex, race, or
creed.

58

Under the Constitution of the United States, the assurance of equality in

employment and work opportunities regardless of sex, race, or creed is also
given by the equal protection clause of the Bill of Rights. The 14th
Amendment, in declaring that no state shall deprive a person of his life,
liberty, or property without due process of law or deny to any person within
its jurisdiction the equal protection of the laws, undoubtedly intended not
only that there should be no arbitrary spoliation of property, but that equal
protection and security should be given to all under like circumstances in the
enjoyment of their personal and civil rights, and that all persons should be
equally entitled to pursue their happiness ands acquire and enjoy property. It
extends its protection to all persons without regard to race, color, or class. It
means equality of opportunity to all in like circumstances.35

was never so employed. Petitioner never acquired any vested right to the
salaries pertaining to the position of GS 1710-9 to which she was never
appointed. Damages which are merely possible are speculative.38 In
determining actual damages, the court cannot rely on speculation,
conjecture or guesswork. Without the actual proof of loss, the award of
actual damages is erroneous.39 Consequently, the award of actual damages
made by the trial court should be deleted. Attorneys fees, however, may be
granted and we believe that an award thereof in the sum of P20,000.00 is
reasonable under the circumstances.1wphi1
IV. Finally, private respondents postulate that petitioner Loida Q. Shauf failed
to avail herself of her remedy under the United States federal legislation on
equality of opportunity for civilian employees, which is allegedly exclusive of
any other remedy under American law, let alone remedies before a foreign
court and under a foreign law such as the Civil Code of the Philippines.

The words "life, liberty, and property" as used in constitutions are

representative terms and are intended to cover every right to which a
member of the body politic in entitled under the law. These terms include the
right of self-defense, freedom of speech, religious and political freedom,
exemption from arbitrary arrests, the right to freely buy and sell as others
may, the right to labor, to contract, to terminate contracts, to acquire
property, and the right to all our liberties, personal, civil and political-in short,
all that makes life worth living.36

In a letter of the Department of the Air Force in Washington, D.C., dated

September 1, 1978 and addressed to petitioner Loida Q. Shauf,40 the appeal
rights of the latter from the Air Force decision were enumerated as follows:
-You may appeal to the Civil Service Commission within 15
calendar days of receipt of the decision. Your appeal should be
addressed to the Civil Service Commission, Appeals Review Board,
1990 E Street, N.Q., Washington, D.C. 20415. The appeal and any
representation in support thereof must be submitted in duplicate.

There is no doubt that private respondents Persi and Detwiler, in committing

the acts complained of have, in effect, violated the basic constitutional right
of petitioner Loida Q. Shauf to earn a living which is very much an integral
aspect of the right to life. For this, they should be held accountable.

-In lieu of an appeal to the Commission you may file a civil action in
an appropriate U.S. District Court within 30 days of receipt of the
decision.

While we recognize petitioner Loida Q. Shaufs entitlement to an award of

moral damages, we however find no justification for the award of actual or
compensatory damages, based on her supposedly unearned income from
March, 1975 up to April, 1978 in the total amount of $39,662.49, as
erroneously granted by the trial court.

-If you elect to appeal to the Commissions Appeals Review Board,

you may file a civil action in a U.S. District Court within 30 days of
receipt of the Commissions final decision.

Evidence that the plaintiff could have bettered her position had it not been
for the defendants wrongful act cannot serve as basis for an award of
damages, because it is highly speculative.37 Petitioner Loida Q. Shaufs
claim is merely premised on the possibility that had she been employed, she
would have earned said amount. But, the undeniable fact remains that she

-A civil action may also be filed anytime after 180 days of the date
of initial appeal to the Commission, if a final decision has not been
rendered.

59

As earlier noted, in a Supplement to Partial Stipulation of Facts filed by the

parties on October 6, 1978, it was manifested to the trial court that an appeal
was lodged by counsel for petitioners on September 30, 1978 before the
Civil Service Commission. Appeals Review Board from the decision of the
Secretary of the Air Force in the discrimination case filed by petitioner Loida
Q. Shauf, No. SF 071380181. Said appeal has not been decided up to now.
Furthermore, it is basic that remedial statutes are to be construed liberally.
The term "may," as used in adjective rules, is only permissive and not
mandatory, and we see no reason why the so-called rules on the above
procedural options communicated to said petitioner should depart from this
fundamental . petitioner Loida Q. Shauf is not limited to these remedies, but
is entitled as a matter of plain and simple justice to choose that remedy, not
otherwise proscribed, which will best advance and protect her interests.
There is, thus, nothing to enjoin her from seeking redress in Philippine courts
which should not be ousted of jurisdiction on the dubious and inconclusive
representations of private respondents on that score.

THIRD DIVISION
[G.R. No. 97765. September 24, 1992.]

WHEREFORE, the challenged decision and resolution of respondent Court

of Appeals in CA-G.R. CV No. 17932 are hereby ANNULLED and SET
ASIDE. Private respondents are hereby ORDERED, jointly and severally, to
pay petitioners the sum of P100,000.00 as moral damages, P20,000.00 as
and for attorneys fees, and the costs of suit.

KHOSROW MINUCHER, Petitioner, v. THE HONORABLE COURT OF

APPEALS and ARTHUR W. SCALZO, JR., Respondents.
De Leon, De Leon, Casanova Associates for Petitioner.
Luna, Sison, & Manas for Private Respondent.

SO ORDERED.
SYLLABUS

Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, jj., concur.

Decision and resolution annulled and set aside

1. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI;

DISMISSAL OF ACTION BASED ON ERRONEOUS ASSUMPTION, A
GRAVE ABUSE OF DISCRETION. While the trial court correctly
denied the motion to dismiss, the public respondent gravely
abused its discretion in dismissing Civil Case No. 88-45691 on the
basis of an erroneous assumption that simply because of the
Diplomatic Note, the private respondent is clothed with diplomatic
immunity, thereby divesting the trial court of jurisdiction over his
person. Private respondent himself, in his Pre-trial Brief filed on 13
June 1990, unequivocally states that he would present
documentary evidence consisting of DEA records on his

60

investigation and surveillance of plaintiff and on his position and

duties as DEA special agent in Manila. Having thus reserved his
right to present evidence in support of his position, which is the
basis for the alleged diplomatic immunity, the barren self-serving
claim in the belated motion to dismiss cannot be relied upon for a
reasonable, intelligent and fair resolution of the issue of diplomatic
immunity. The public respondent then should have sustained the
trial courts denial of the motion to dismiss. Verily, such should
have been the most proper and appropriate recourse. It should not
have been overwhelmed by the self-serving Diplomatic Note whose
belated issuance is even suspect and whose authenticity has not
yet been proved. The undue haste with which respondent Court
yielded to the private respondents claim is arbitrary.

to the core issue the alleged diplomatic immunity of the

private Respondent. Setting aside for the moment the issue of
authenticity raised by the petitioner and the doubts that surround
such a claim, in view of the fact that it took private respondent one
(1) year, eight (8) months and seventeen (17) days from the time
his counsel filed on 12 September 1988 a Special Appearance and
Motion asking for a first extension of time to file the Answer
because the Departments of State and Justice of the United States
of America were studying the case for the purpose of determining
his defenses, before he could secure the Diplomatic Note from the
U.S. Embassy in Manila, and even granting for the sake of
argument that such note is authentic, the complaint for damages
filed by the petitioner still cannot be peremptorily dismissed. Said
complaint contains sufficient allegations which indicate that the
private respondent committed the imputed acts in his personal
capacity and outside the scope of his official duties and functions.
As described in the complaint, he committed criminal acts for
which he is also civilly liable. In the Special Appearance to Quash
Summons earlier alluded to, on the other hand, private respondent
maintains that the claim for damages arose "from an alleged tort."
Whether such claim arises from criminal acts or from tort, there
can be no question that private respondent was sued in his
personal capacity for acts committed outside his official functions
and duties. In the decision acquitting the petitioner in the criminal
case involving the violation of the Dangerous Drugs Act, copy of
which is attached to his complaint for damages and which must be
deemed as an integral part thereof, the trial court gave full credit
to petitioners theory that he was a victim of a frame-up instigated
by the private Respondent. Thus, there is a prima facie showing in
the complaint that indeed private respondent could be held
personally liable for the acts committed beyond his official
functions or duties.

2. ID.; ACTIONS; MOTION TO DISMISS; GROUNDS; LACK OF

CAUSE OF ACTION WHERE DEFENDANT IS A DIPLOMAT. It may
at once be stated that even if the private respondent enjoys
diplomatic immunity, a dismissal of the case cannot be ordered on
the ground of lack of jurisdiction over his person, but rather for
lack of a cause of action because even if he committed the
imputed act and could have been otherwise made liable therefor,
his immunity would bar any suit against him in connection
therewith and would prevent recovery of damages arising
therefrom.
3. ID.; ID.; JURISDICTION OVER THE PERSON, HOW ACQUIRED;
CASE AT BAR. Jurisdiction over the person of the defendant is
acquired either by his voluntary appearance or by the service of
summons upon him. While in the instant case, private
respondents counsel filed, on 26 October 1988, a motion to quash
summons because being outside the Philippines and being a nonresident alien, he is beyond the processes of the court, which was
properly denied by the trial court, he had in effect already waived
any defect in the service of the summons by earlier asking, on two
(2) occasions, for an extension of time to file an answer, and by
ultimately filing an Answer with Counterclaim. There is no question
that the trial court acquired jurisdiction over the person of the
private Respondent.

DECISION

DAVIDE, JR., J.:

4. ID.; ID.; MOTION TO DISMISS; CASE SHOULD NOT BE

DISMISSED WHERE THERE IS SUFFICIENT ALLEGATION OF
PERSONAL LIABILITY OF DEFENDANT; CASE AT BAR. And now

May a complaint for damages be dismissed on the sole basis of a

statement contained in a Diplomatic Note, belatedly issued after

61

an answer to the said complaint had already been filed, that the
defendant was a member of the diplomatic staff of the United
States Diplomatic Mission in the Philippines at the time the cause
of action accrued?

commission based on profits.chanrobles.com.ph : virtual law

library
In the evening of 26 May 1986, private respondent came to
petitioners residence and asked to be entrusted with a pair of
Persian silk carpets with a floor Price of $24,000.00 each, for which
he had a buyer. The following day, private respondent returned to
petitioners residence, took the carpets and gave the latter
$24,000.00; after about an hour, private respondent returned,
claimed that he had already made arrangements with his contacts
at the American Embassy concerning the visas and asked for
$2,000.00. He was given this amount. It turned out, however, that
private respondent had prepared an elaborate plan to frame-up the
petitioner and Abbas Torabian for alleged heroin trafficking; both
were falsely arrested by private respondent and some American
and Filipino police officers, and were taken to Camp Crame in their
underwear. Private respondent and his companions took
petitioners three (3) suitcases containing various documents, his
wallet containing money and the keys to his house and car, as well
as the $24,000.00 which private respondent had earlier delivered
to him. Petitioner and Torabian were handcuffed together for three
(3) days and were not given food and water; they were asked to
confess to the possession of heroin or else they would be jailed or
even executed by Iranian terrorists. Consequently, the two were
charged for the violation of Section 4 of R.A. No. 6425 (Dangerous
Drugs Act of 1972) before the Regional Trial Court of Pasig. They
were, however, acquitted by the said court on 8 January 1988.
Private respondent testified for the prosecution in the said case.

This is the issue in the instant petition.

On 3 August 1988, petitioner filed with the Regional Trial Court
(RTC) of Manila a complaint for damages against private
respondent Arthur Scalzo, Jr. The case was docketed as Civil Case
No. 88-45691 and was raffled off to Branch 19 of said court. 1
Petitioner alleges therein that he was the Labor Attache of the
Embassy of Iran in the Philippines "prior to the Ayatollah Khomeini
regime." On 13 May 1986, private respondent, then connected
with the American Embassy in Manila, was introduced to him by a
certain Jose Iigo, an informer belonging to the military
intelligence community, with whom petitioner had several business
transactions involving Iranian products like carpets, caviar and
others. Iigo had previously sought petitioners assistance in
connection with charges of illegal recruitment. According to Iigo,
private respondent was purportedly interested in buying Iranian
products, namely caviar and carpets. On this same occasion,
petitioner complained to the private respondent about the
problems the former was then encountering with the American
Embassy regarding the expired visas of his wife and fellow Iranian,
Abbas Torabian. Offering his help, private respondent gave the
petitioner a calling card showing that the former is an agent of the
Drug Enforcement Administration (DEA), Department of Justice, of
the United States of America assigned to the American Embassy in
Manila with official contacts with a certain Col. Dumlao; head of
the Anti-Narcotics Command, Philippine Constabulary. Private
respondent also expressed his intent to purchase two (2) kilos of
caviar worth P10,000.00 and informed the petitioner that he might
have prospective buyers for these goods; he further promised to
arrange for the renewal of the aforesaid visas for a $2,000.00 fee.
On 19 May 1986, private respondent invited petitioner to dinner at
Marios Restaurant in Makati, Metro Manila; the petitioner
accepted. During the said dinner held the very next day, both
discussed politics and business. Specifically, private respondent
told petitioner that he wanted to purchase an additional two
hundred (200) grams of caviar and inquired about his commission
for selling petitioners carpets; petitioner promised a 10%

Petitioner further alleges in his complaint that private respondent

falsely testified against him in the criminal case. The former also
avers that charges of unlawful arrest, robbery and estafa or
swindling have already been filed against the private Respondent.
He therefore prays for actual and compensatory damages of not
less than P480,000,00 ($24,000.00) representing the fair market
value of the Persian silk carpet and $2,000.00 representing the
refund of the amount he had given for the visas; moral damages in
the amount of P5 million; exemplary damages in the sum of
P100,000.00 and attorneys fees of at least P200,000.00 to answer
for litigation expenses incurred for his defense in the criminal case
and for the prosecution of the civil case.chanrobles law library

62

On 14 September 1988, private respondents counsel, the law firm

LUNA, SISON AND MANAS, filed a Special Appearance and Motion
alleging therein that since the private respondent is an agent of
the Drug Enforcement Administration of the United States of
America, and the acts and omissions complained of were
performed by him in the performance of official functions, the case
is now under study by the Departments of State and Justice in
Washington, D.C. for the purpose of determining what defenses
would be appropriate; said counsel also prayed that the period to
answer be extended to 13 October 1988. 2 This prayer was
granted in the 16 September 1988 order of the court.

"The Complaint fails to state a cause of action: in having plaintiff

and Abbas Torabian arrested on May 27, 1986 and detained at
Camp Crame; a quantity of heroin, seized from plaintiff by
Philippine police authorities and in seizing the money used in the
drug transaction, defendant acted in the discharge of his official
duties or otherwise in the performance of his official functions as
agent of the Drug Enforcement Administration, U.S. Department of
Justice." 9
and interposes a counterclaim for P100,000.00 to answer for
attorneys fees and the expenses of litigation.chanrobles law
library : red

On 12 October 1988, private respondents aforesaid counsel filed

another Special Appearance and Motion seeking a further
extension of the period to answer to 28 October 1988 because the
law firm had not yet received the decision of the Departments of
State and Justice. 3

On 13 June 1990, private respondent filed with the trial court the
Defendants Pre-Trial Brief, 10 the pertinent portions of which
read:chanrob1es virtual 1aw library
x

On 27 October 1988, private respondents counsel filed a Special

Appearance to Quash Summons 4 alleging therein that: "The
action being a personal action for damages arising from an alleged
tort, the defendant being outside the Philippines and not being a
resident of the Philippines, Defendant is beyond the processes of
this court," and praying that the summons issued be quashed. The
trial court denied the motion in its Order of 13 December 1988. 5
Unsatisfied with the said order, private respondent filed a petition
for certiorari with the Court of Appeals which was docketed as
C.A.-G R. SP No 17023. In its Decision promulgated on 6 October
1989, the Court of Appeals dismissed the petition for lack of merit.
6 Respondent thus sought a review of the said decision by filing a
petition with this Court which was docketed as G.R. No. 91173.
Said petition was however, dismissed by this Court in the
Resolution of 20 December 1989 for non-compliance with
paragraph 2 of Circular No. 1-88; moreover, respondent failed to
show that the Court of Appeals had committed any reversible error
in the questioned judgment. 7

"DEFENSES
1. Plaintiffs complaint is false and malicious;
2. In having a quantity of heroin and the money used in the drug
transaction between him and plaintiff seized from plaintiff by P.C.
NARCOM, plaintiff (sic) was acting in the discharge of his official
functions as special agent of the Drug Enforcement Administration,
U.S. Department of Justice and was then a member of the U.S.
diplomatic mission in the Philippines.
DEFENDANTS EVIDENCE
Defendant will present:chanrob1es virtual 1aw library
1. His testimony by deposition upon written interrogatories
because defendant lives and works outside the Philippines and is
not a resident of the Philippines.

On 9 March 1990, private respondent filed with the trial court his
Answer in Civil Case No. 88-46591 8 wherein he denies the
material allegations in the complaint, sets forth the following
Affirmative Defenses:jgc:chanrobles.com.ph

2. Documentary evidence, consisting of DEA records on his

investigation and surveillance of plaintiff and on his position and

63

duties as DEA special agent in May 1980 in Manila; these will be

identified by defendant and possibly by another DEA official." 11

Petitioners motion to reconsider the decision was denied in the

public respondents Resolution of 8 March 1991
because:jgc:chanrobles.com.ph

On 14 June 1990, private respondent filed a Motion to Dismiss 12

the case on the ground that as per the copy of Diplomatic Note No.
414 issued by the Embassy of the United States of America, 13
dated 29 May 1990 and certified to be a true and faithful copy of
the original by one Donald K. Woodward, Vice-Consul of the United
States of America on 11 June 1990, 14 the Embassy advised the
Department of Foreign Affairs of the Republic of the Philippines
that:jgc:chanrobles.com.ph

"When therefore Mr. Scalzo testified in the Criminal Case against

Khosrow Minucher it was in connection with his official functions as
an agent of the Drug Enforcement Administration of the United
States and member (sic) of the American Mission charged with
cooperating with the Philippine law enforcement agency. He
therefore, enjoys immunity from criminal and civil jurisdiction of
the receiving State under Article 31 of the Vienna Convention on
Diplomatic Relations." 17

". . . Arthur W. Scalzo, was a member of the diplomatic staff of the

United States diplomatic mission from his arrival in the Philippines
on October 14, 1985 until his departure on August 10, 1988. . . .

Hence, this petition for review under Rule 45 of the Rules of Court.
Petitioner declares that the public respondent
erred:jgc:chanrobles.com.ph

. . . in May 1986, with the cooperation of Philippine law

enforcement officials and in the exercise of his functions as a
member of the mission, Mr. Scalzo investigated Mr. Khosrow
Minucher, the plaintiff in the aforementioned case for allegedly
trafficking in a prohibited drug. It is this investigation which has
given rise to the plaintiffs complaint. The Embassy takes note of
the provisions of Article 39(2) of the Vienna Convention on
Diplomatic Relations, which provides that Mr. Scalzo retains
immunity from civil suit for acts performed in the exercise of his
functions, as is the case here, even though he has departed (sic)
the country." chanrobles virtual lawlibrary

"I. . . . IN NOT DISMISSING THE PETITION FOR CERTIORARI

FILED BY SCALZO.
II. . . . IN RULING THAT PRIVATE RESPONDENT SCALZO IS A
DIPLOMAT IMMUNE FROM CIVIL SUIT CONFORMABLY WITH THE
VIENNA CONVENTION ON DIPLOMATIC RELATIONS.
III. . . . IN NOT FINDING THAT SCALZOS PARTICIPATION IN THE
BUY-BUST OPERATION IS OUTSIDE OF HIS OFFICIAL FUNCTIONS,
HENCE, THAT HE IS NOT IMMUNE FROM SUIT UNDER THE VIENNA
CONVENTION ON DIPLOMATIC RELATIONS." 18

Petitioner opposed the motion.

After private respondent filed his Comment to the petition and the
petitioner submitted his Reply thereto, this Court gave due course
to the same and required the parties to submit their respective
Memoranda, which they subsequently did.

On 25 June 1990, the trial court issued an order denying the

motion for being "devoid of merit." 15
Private respondent then filed with the public respondent Court of
Appeals a petition for certiorari, docketed therein as C.A.-G.R. SP
No. 22505, to nullify the aforesaid Order of 25 June 1990.

We find merit in the petition.

While the trial court correctly denied the motion to dismiss, the
public respondent gravely abused its discretion in dismissing Civil
Case No 88-45691 on the basis of an erroneous assumption that
simply because of the Diplomatic Note, the private respondent is
clothed with diplomatic immunity, thereby divesting the trial court
of jurisdiction over his person. It may at once be stated that even

On 31 October 1990, public respondent promulgated a Decision 16

ordering the dismissal of Civil Case No. 88-45691 due to the trial
courts lack of jurisdiction over the person of the defendant
because the latter possessed diplomatic immunity.

64

if the private respondent enjoys diplomatic immunity, a dismissal

of the case cannot be ordered on the ground of lack of jurisdiction
over his person, but rather for lack of a cause of action because
even if he committed the imputed act and could have been
otherwise made liable therefor, his immunity would bar any suit
against him in connection therewith and would prevent recovery of
damages arising therefrom. Jurisdiction over the person of the
defendant is acquired either by his voluntary appearance or by the
service of summons upon him. While in the instant case, private
respondents counsel filed, on 26 October 1988, a motion to quash
summons because being outside the Philippines and being a nonresident alien, he is beyond the processes of the court, which was
properly denied by the trial court, he had in effect already waived
any defect in the service of the summons by earlier asking, on two
(2) occasions, for an extension of time to file an answer, and by
ultimately filing an Answer with Counterclaim. There is no question
that the trial court acquired jurisdiction over the person of the
private Respondent.cralawnad

and duties. In the decision acquitting the petitioner in the criminal

case involving the violation of the Dangerous Drugs Act, copy of
which is attached to his complaint for damages and which must be
deemed as an integral part thereof, the trial court gave full credit
to petitioners theory that he was a victim of a frame-up instigated
by the private Respondent. Thus, there is a prima facie showing in
the complaint that indeed private respondent could be held
personally liable for the acts committed beyond his official
functions or duties.
In Shauf v. Court of Appeals, 19 after citing pertinent authorities,
20 this Court ruled:chanrobles lawlibrary : rednad
"The aforecited authorities are clear on the matter. They state that
the doctrine of immunity from suit will not apply and may not be
involved where the public official is being sued in his private and
personal capacity as an ordinary citizen. The cloak of protection
afforded the officers and agents of the government is removed the
moment they are sued in their individual capacity. This situation
usually arises where the public official acts without authority or in
excess of the powers vested in him. It is a well-settled principle of
law that a public official may be liable in his personal private
capacity for whatever damage he may have caused by his act done
with malice and in bad faith, or beyond the scope of his authority
or jurisdiction (Dumlao v. Court of Appeals, Et Al., 114 SCRA 247
[1982])."cralaw virtua1aw library

And now to the core issue the alleged diplomatic immunity of

the private Respondent. Setting aside for the moment the issue of
authenticity raised by the petitioner and the doubts that surround
such a claim, in view of the fact that it took private respondent one
(1) year, eight (8) months and seventeen (17) days from the time
his counsel filed on 12 September 1988 a Special Appearance and
Motion asking for a first extension of time to file the Answer
because the Departments of State and Justice of the United States
of America were studying the case for the purpose of determining
his defenses, before he could secure the Diplomatic Note from the
U.S. Embassy in Manila, and even granting for the sake of
argument that such note is authentic, the complaint for damages
filed by the petitioner still cannot be peremptorily dismissed. Said
complaint contains sufficient allegations which indicate that the
private respondent committed the imputed acts in his personal
capacity and outside the scope of his official duties and functions.
As described in the complaint, he committed criminal acts for
which he is also civilly liable. In the Special Appearance to Quash
Summons earlier alluded to, on the other hand, private respondent
maintains that the claim for damages arose "from an alleged tort."
Whether such claim arises from criminal acts or from tort, there
can be no question that private respondent was sued in his
personal capacity for acts committed outside his official functions

Even Article 31 of the Vienna Convention on Diplomatic Relations

admits of exceptions. It reads:jgc:chanrobles.com.ph
"1. A diplomatic agent shall enjoy immunity from the criminal
jurisdiction of the receiving State. He shall also enjoy immunity
from its civil and administrative jurisdiction except in the case
of:chanrob1es virtual 1aw library
x

(c) an action relating to any professional or commercial activity

exercised by the diplomatic agent in the receiving State outside his
official functions. (Emphasis supplied).

65

There is of course the claim of private respondent that the acts

imputed to him were done in his official capacity. Nothing supports
this self-serving claim other than the so-called Diplomatic Note. In
short, insofar as the records are concerned, private respondent did
not come forward with evidence to prove that indeed, he had acted
in his official capacity. It does not appear that an actual hearing on
the motion to dismiss was conducted and that private respondent
offered evidence in support thereof. Thus, it is apropos to quote
what this Court stated in United States of America v. Guinto: 21

states that he would present documentary evidence consisting of

DEA records on his investigation and surveillance of plaintiff and on
his position and duties as DEA special agent in Manila. Having thus
reserved his right to present evidence in support of his position,
which is the basis for the alleged diplomatic immunity, the barren
self-serving claim in the belated motion to dismiss cannot be relied
upon for a reasonable, intelligent and fair resolution of the issue of
diplomatic immunity.
The public respondent then should have sustained the trial courts
denial of the motion to dismiss. Verily, such should have been the
most proper and appropriate recourse. It should not have been
overwhelmed by the self-serving Diplomatic Note whose belated
issuance is even suspect and whose authenticity has not yet been
proved. The undue haste with which respondent Court yielded to
the private respondents claim is arbitrary.

"But even as we are certain that the individual petitioners in G.R.

No. 80018 were acting in the discharge of their official functions,
we hesitate to make the same conclusion in G.R. No. 80258. The
contradictory factual allegations in this case deserve in our view a
closer study of what actually happened to the plaintiffs. The record
is too meager to indicate if the defendants were really discharging
their official duties or had actually exceeded their authority when
the incident in question occurred. Lacking this information, this
Court cannot directly decide this case. The needed inquiry must
first be made by the lower court so it may assess and resolve the
conflicting claims of the parties on the basis of the evidence that
has yet to be presented at the trial. Only after it shall have
determined in what capacity the petitioners were acting at the
time of the incident in question will this Court determine, if still
necessary, if the doctrine of state immunity is applicable."cralaw
virtua1aw library

WHEREFORE, the challenged decision of public respondent of 31

October 1990 in C.A.-G.R. SP No. 22505 is SET ASIDE and the
Order of 25 June 1990 of Branch 19 of the Regional Trial Court of
Manila in Civil Case No. 88-45691 denying private respondents
Motion to Dismiss is hereby REINSTATED.
Costs against private Respondent.
SO ORDERED.

It may be mentioned in this regard that private respondent

himself, in his Pre-trial Brief filed on 13 June 1990, unequivocally

Bidin, Romero and Melo, JJ., concur

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