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STATE IMMUNITY Sec. 7. Execution. No execution shall issue upon any judgment
rendered by any court against the Government of the Philippine
Islands under the provisions of this Act; but a copy thereof duly
ACT NO. 3083 certified by the clerk of the Court in which judgment is rendered shall
AN ACT DEFINING THE CONDITIONS UNDER WHICH be transmitted by such clerk to the Governor-General, 3 within five
THE GOVERNMENT OF THE PHILIPPINE ISLANDS MAY BE days after the same becomes final.
Sec. 8. Transmittal of Decision. The Governor-General, 4 at the
Section 1. Complaint against Government. Subject to the commencement of each regular session of the Legislature, 5 shall
provisions of this Act, the Government of the Philippine Islands hereby transmit to that body for appropriate action all decisions so received
consents and submits to be sued upon any moneyed claim involving by him, and if said body determine that payment should be made, it
liability arising from contract, expressed or implied, which could serve shall appropriate the sum which the Government has been sentenced
as a basis of civil action between private parties. to pay, including the same in the appropriations for the ensuing year.

Sec. 2. A person desiring to avail himself of the privilege herein Sec. 9. This Act shall take effect on its approval.
conferred must show that he has presented his claim to the Insular
Auditor 1 and that the latter did not decide the same within two Approved: March 16, 1923.
months from the date of its presentation.

Sec. 3. Venue. Original actions brought pursuant to the authority COMMONWEALTH ACT NO. 327
conferred in this Act shall be instituted in the Court of First Instance of AN ACT FIXING THE TIME WITHIN WHICH THE AUDITOR
the City of Manila or of the province were the claimant resides, at the GENERAL SHALL RENDER HIS DECISIONS AND
option of the latter, upon which court exclusive original jurisdiction is PRESCRIBING THE MANNER OF APPEAL THEREFROM
hereby conferred to hear and determine such actions.

Section 1. In all cases involving the settlement of accounts or claims,

Sec. 4. Actions instituted as aforesaid shall be governed by the same
other than those of accountable officers, the Auditor General shall act
rules of procedure, both original and appellate, as if the litigants were
and decide the same within sixty days, exclusive of Sundays and
private parties.
holidays, after their presentation. If said accounts or claims need

reference to other persons, office or offices, or to a party interested,

Sec. 5. When the Government of the Philippine Island is plaintiff in an
the period aforesaid shall be counted from the time the last comment
action instituted in any court of original jurisdiction, the defendant
necessary to a proper decision is received by him. With respect to the
shall have the right to assert therein, by way of set-off or counterclaim
accounts of accountable officers, the Auditor General shall act on the
in a similar action between private parties.
same within one hundred days after their submission, Sundays and

holidays excepted.
Sec. 6. Process in actions brought against the Government of the

Philippine Islands pursuant to the authority granted in this Act shall be
In case of accounts or claims already submitted to but still pending
served upon the Attorney-General 2 whose duty it shall be to appear
decision by the Auditor General on or before the approval of this Act,
and make defense, either himself or through delegates.

the periods provided in this section shall commence from the date of
such approval. PRESIDENTIAL DECREE No. 1807
Section 2. The party aggrieved by the final decision of the Auditor REPUBLIC OF THE PHILIPPINES MAY WAIVE SOVEREIGN
General in the settlement of an account for claim may, within thirty IMMUNITY FROM SUIT AND OTHER LEGAL PROCEEDING
days from receipt of the decision, take an appeal in writing: WITH RESPECT TO ITSELF OR ITS PROPERTY IN


(a) To the President of the United States, pending the final and
complete withdrawal of her sovereignty over the Philippines, or
WHEREAS, in the pursuit of economic growth and development, it has
become imperative for the Republic of the Philippines to enter into
(b) To the President of the Philippines, or contracts or transactions with international banking, financial and
other foreign enterprises;
(c) To the Supreme Court of the Philippines if the appellant is a WHEREAS, recognizing this need, existing legislation expressly
private person or entity. authorize the Republic of the Philippines to contract foreign
obligations, including borrowings in foreign currency, and to guarantee
If there are more than one appellant, all appeals shall be taken to the foreign obligations of corporations and other entities owned or
same authority resorted to by the first appellant. controlled by the Government of the Philippines;
WHEREAS, circumstances in the international market may require that
From a decision adversely affecting the interests of the Government, sovereign states entering into contracts or transactions make express
the appeal may be taken by the proper head of the department or in waivers of sovereign immunity in connection with such contracts or
case of local governments by the head of the office or branch of the
Government immediately concerned. WHEREAS, it is in the national interest that a procedure be prescribed
with respect to the waiver of sovereign immunity of the Republic of
the Philippines in respect of international contracts or transactions
The appeal shall specifically set forth the particular action of the
entered into by it;
Auditor General to which exception is taken with the reasons and
authorities relied on for reversing such decision. NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Republic of the Philippines, by virtue of the powers vested in me by

the Constitution, do hereby order and decree:

Section 3. This Act shall take effect upon its approval.
Section 1. Procedure for, and Conditions of, Waiver of Sovereign
Approved: June 18. 1938.
In instances where the law expressly authorizes the Republic of the
Philippines to contract or incur a foreign obligation, it may consent to
be sued in connection therewith. The President of the Philippines or his
duly designated representative may, in behalf of the Republic of the
Philippines, contractually agree to waive any claim to sovereign
immunity from suit or legal proceedings and from set-off, attachment
or executive with respect to its property, and to be sued in any
appropriate jurisdiction in regard to such foreign obligation.
For purposes of this decree, a foreign obligation means any direct,
indirect, or contingent obligation or liability capable of pecuniary
estimation and payable in a currency other than Philippine currency.

Consequently, the Government issued an act allowing the

Section 2. Validity of existing Waivers. plaintiff to commence a lawsuit against it.
Nothing in this Decree shall be construed to revoke or repeal any
waiver of sovereign immunity from suit or legal proceedings or from
set-off, attachment or execution granted under or pursuant to other
1) WON the Government conceded its liability to the plaintiff by
provisions of law.
allowing a lawsuit to commence against it.
Section 3. Effectivity. This Decree shall take effect immediately. 2) WON the chauffeur is a government employee or agent.

ARTICLE 2180 (NCC) 1) NO.
xxx By consenting to be sued a state simply waives its immunity from
The State is responsible in like manner when it acts through a special suit. It does not thereby concede its liability to plaintiff, or create any
agent; but not when the damage has been caused by the official to cause of action in his favor, or extend its liability to any cause not
whom the task done properly pertains, in which case what is provided previously recognized. It merely gives a remedy to enforce a
in Article 2176 shall be applicable. preexisting liability and submits itself to the jurisdiction of the court,
xxx subject to its right to interpose any lawful defense.
2) NO.
We will now examine the substantive law touching the defendant's
liability for the negligent acts of its officers, agents, and employees.
1. G.R. No. L-11154 March 21, 1916 Paragraph 5 of article 1903 of the Civil Code reads: The state is liable
E. MERRITTvs. in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it
pertained to do the act performed, in which case the provisions of the
preceding article shall be applicable. The responsibility of the state is
limited to that which it contracts through a special agent, duly
Counsel for the plaintiff insists that the trial court erred (1) "in
empowered by a definite order or commission to perform some act or
limiting the general damages which the plaintiff suffered to P5,000,
charged with some definite purpose which gives rise to the claim.
instead of P25,000 as claimed in the complaint," and (2) "in limiting
The chauffeur of the ambulance of the General Hospital was not
the time when plaintiff was entirely disabled to two months and
such an agent.
twenty-one days and fixing the damage accordingly in the sum of
P2,666, instead of P6,000 as claimed by plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that
the trial court erred: (a) in finding that the collision between the
plaintiff's motorcycle and the ambulance of the General Hospital was
due to the negligence of the chauffeur, who is an alleged agent or
employee of the Government; (b) in holding that the Government of
the Philippine Islands is liable for the damages sustained by the
plaintiff as a result of the collision, even if it be true that the collision
was due to the negligence of the chauffeur; and (c) in rendering
judgment against the defendant for the sum of P14,741.

GRN L-35645 May 22, 1985.

3. G.R. No. 129406 March 6, 2006
RUIZ, Presiding Judge of Branch XV, Court of First Instance of REPUBLIC OF THE PHILIPPINES represented by the
(PCGG) vs.
The United States of America had a naval base in Subic, BENEDICTO.
Zambales. The base was one of those provided in the Military Bases
Agreement between the Philippines and the United States. FACTS:
Sometime in May, 1972, the United States invited the The PCGG issued writs placing under sequestration all
submission of bids for a couple of repair projects. Eligio de Guzman business enterprises, entities and other properties, real and personal,
land Co., Inc. responded to the invitation and submitted bids. owned or registered in the name of private respondent Benedicto, or
Subsequent thereto, the company received from the US two telegrams of corporations in which he appeared to have controlling or majority
requesting it to confirm its price proposals and for the name of its interest due to his involvement in cases of ill-gotten wealth. Among
bonding company. The company construed this as an acceptance of its the properties thus sequestered and taken over by PCGG fiscal agents
offer so they complied with the requests. The company received a were the 227 shares in NOGCCI owned by and registered under the
letter which was signed by William I. Collins of Department of the name of private respondent. As sequester of the 227 shares formerly
Navy of the United States, also one of the petitioners herein informing owned by Benedicto, PCGG did not pay the monthly membership fee.
that the company did not qualify to receive an award for the projects Later on, the shares were declared to be delinquent to be put into an
because of its previous unsatisfactory performance rating in repairs, auction sale. Despite filing a writ of injunction, it was nevertheless
and that the projects were awarded to third parties. The company filed dismissed. So petitioner Republic and private respondent Benedicto
a complaint against the defendants herein demanding specific entered into a Compromise Agreement which contains a general
performance that the company be allowed to perform the work on the release clause where petitioner agreed and bound itself to lift the
projects and, in the event that specific performance was no longer sequestration on the 227 NOGCCI shares acknowledging that it was
possible, to order the defendants to pay damages. within private respondents capacity to acquire the same shares out of
his income from business and the exercise of his profession. Implied in
ISSUE: WON the US is immune from suit having dealt with a private this undertaking is the recognition by petitioner that the subject
corporation. shares of stock could not have been ill-gotten
Benedicto filed a Motion for Release from Sequestration and
HELD: YES. Return of Sequestered Shares/Dividends praying, inter alia, that his
A State may be said to have descended the the level of an NOGCCI shares of stock be specifically released from sequestration
individual and can thus be deemed to have tacitly given its consent to and returned, delivered or paid to him as part of the parties
be sued only when it enters into business contracts. It does not apply Compromise Agreement in that case. It was granted but the shares
where the contract relates to the exercise of its sovereign functions. In were ordered to be put under the custody of the Clerk of Court. Along
this case the projects are an integral part of the naval base which is with this, PCGG was ordered to deliver the shares to the Clerk of Court
devoted to the defense of both the United States and the Philippines, which it failed to comply with without any justifiable grounds.
indisputably a function of the government of the highest order, they In a last-ditch attempt to escape liability, petitioner Republic,
are not utilized for nor dedicated to commercial or business purposes. through the PCGG, invokes state immunity from suit.

Now, the fact that a non-corporate government entity

ISSUE: WON the Republic can invoke state immunity. performs a function proprietary in nature does not necessarily result in
its being suable. If said non-governmental function is undertaken as
HELD: NO. an incident to its governmental function, there is no waiver thereby of
In fact, by entering into a Compromise Agreement with private the sovereign immunity from suit extended to such government entity.
respondent Benedicto, petitioner Republic thereby stripped itself of its The Bureau of Customs, to repeat, is part of the Department
immunity from suit and placed itself in the same level of its adversary. of Finance with no personality of its own apart from that of the
When the State enters into contract, through its officers or agents, in national government. Its primary function is governmental, that of
furtherance of a legitimate aim and purpose and pursuant to assessing and collecting lawful revenues from imported articles and all
constitutional legislative authority, whereby mutual or reciprocal other tariff and customs duties, fees, charges, fines and penalties. To
benefits accrue and rights and obligations arise therefrom, the State this function, arrastre service is a necessary incident.
may be sued even without its express consent, precisely because by
entering into a contract the sovereign descends to the level of the
citizen. Its consent to be sued is implied from the very act of entering
into such contract, breach of which on its part gives the corresponding G.R. No. L-33112 June 15, 1978
right to the other party to the agreement. PHILIPPINE NATIONAL BANK vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of First
Instance, Branch III, La Union, AGOO TOBACCO PLANTERS
G.R. No. L-23139December 17, 1966
La Union
FACTS: The reliance of petitioner Philippine National Bank against respondent
Four cases of rotary drill parts were shipped from abroad on Judge Javier Pabalan who issued a writ of execution, followed
S.S. "Leoville" consigned to Mobil Philippines Exploration, Inc., Manila. thereafter by a notice of garnishment of the funds of respondent
It was discharged to the custody of the Customs Arrastre Service, the Philippine Virginia Tobacco Administration, deposited with it, is on the
unit of the Bureau of Customs then handling arrastre operations fundamental constitutional law doctrine of non-suability of a state, it
therein. The Customs Arrastre Service later delivered to the broker of being alleged that such funds are public in character.
the consignee three cases only. Petitioner filed suit in the Court of First
Instance of Manila against the Customs Arrastre Service and the ISSUE: WON the funds are public in character, thus immune from suit.
Bureau of Customs to recover the value of the undelivered case plus
other damages. The respondents filed a motion to dismiss on the HELD: NO.
ground that not being persons under the law, they cannot be sued. It is to be admitted that under the present Constitution, what
was formerly implicit as a fundamental doctrine in constitutional law
ISSUE: WON the defendants can invoke state immunity. has been set forth in express terms: "The State may not be sued
without its consent." If the funds appertained to one of the regular

departments or offices in the government, then, certainly, such a Inasmuch as the State authorizes only legal acts by its
provision would be a bar to garnishment. Such is not the case here. officers, unauthorized acts of government officials or officers
It is well-settled that when the government enters into are not acts of the State, and an action against the officials or
commercial business, it abandons its sovereign capacity and is to be officers by one whose rights have been invaded or violated by such
treated like any other corporation. By engaging in a particular acts, for the protection of his rights, is not a suit against the State
business thru the instrumentality of a corporation, the government within the rule of immunity of the State from suit.
divests itself pro hac vice of its sovereign character, so as to render
the corporation subject to the rules of law governing private
7. G.R. No. 206484, June 29, 2016
6. G.R. No. L-31635 August 31, 1971 ABECINA, RESPONDENTS.
Presided by the Honorable, Judge JOSE C. BORROMEO, THE Facts:
Respondent spouses Vicente and Maria Cleofe Abecina (respondents/
spouses Abecina) are the registered owners of five parcels of land in
Sitio Paltik, Barrio Sta. Rosa, Jose Panganiban, Camarines Norte. The
Petitioners sought the payment of just compensation for a
properties are covered by Transfer Certificates of Title (TCT) Nos.
registered lot alleging that in 1927 the National Government through
T-25094, T-25095, T-25096, T-25097, and T-25098.
its authorized representatives took physical and material possession of
it and used it for the widening of a national road, without paying just In February 1993, the DOTC awarded Digitel Telecommunications
compensation and without any agreement, either written or verbal. Philippines, Inc. (Digitel) a contract for the management, operation,
There was an allegation of repeated demands for the payment of its maintenance, and development of a Regional Telecommunications
price or return of its possession, but defendants Public Highway Development Project (RTDP) under the National Telephone Program,
Commissioner and the Auditor General refused to restore its Phase I, Tranche 1 (NTPI-1)
possession. Later on, the municipality of Jose Panganiban, Camarines Norte,
donated a one thousand two hundred (1,200) square-meter parcel of
ISSUE: WON the defendants are immune from suit. land to the DOTC for the implementation of the RDTP in the
municipality. However, the municipality erroneously included portions
HELD: NO. of the respondents' property in the donation. Pursuant to the FLAs,
Where the judgment in such a case would result not only in Digitel constructed a telephone exchange on the property which
the recovery of possession of the property in favor of said citizen but encroached on the properties of the respondent spouses
also in a charge against or financial liability to the Government, then
On April 29, 2003, the respondent spouses sent a final demand letter
the suit should be regarded as one against the government itself, and,
to both the DOTC and Digitel to vacate the premises and to pay
consequently, it cannot prosper or be validly entertained by the courts unpaid rent/damages in the amount of one million two hundred
except with the consent of said Government.

thousand pesos (P1,200,000.00). Neither the DOTC nor Digitel The Constitution identifies the limitations to the awesome and near-
complied with the demand. limitless powers of the State. Chief among these limitations are the
principles that no person shall be deprived of life, liberty, or property
The RTC held that as the lawful owners of the properties, the without due process of law and that private property shall not be
respondent spouses enjoyed the right to use and to possess them - taken for public use without just compensation.These limitations are
rights that were violated by the DOTC's unauthorized entry, enshrined in no less than the Bill of Rights that guarantees the citizen
construction, and refusal to vacate. The RTC ordered the Department - protection from abuse by the State. Consequently, our laws require
as a builder in bad faith -to forfeit the improvements and vacate the that the State's power of eminent domain shall be exercised through
properties; and (2) awarded the spouses with P1,200,000.00 as actual expropriation proceedings in court. Whenever private property is taken
damages, P200,000.00 as moral damages, and P200,000.00 as for public use, it becomes the ministerial duty of the concerned office
exemplary damages plus attorney's fees and costs of suit, The Court or agency to initiate expropriation proceedings. By necessary
of Appeals affirmed the RTCs decision. implication, the filing of a complaint for expropriation is a waiver of
Hence this petition. State immunity.If the DOTC had correctly followed the regular
procedure upon discovering that it had encroached on the
respondents' property, it would have initiated expropriation
proceedings instead of insisting on its immunity from suit. The
Issue: petitioners would not have had to resort to filing its complaint for
Whether the DOTCs contention that instead of allowing recovery of reconveyance.
the property, the case should be remanded to the RTC for The exercise of eminent domain requires a genuine necessity to take
determination of just compensation has merit the property for public use and the consequent payment of just
compensation. The property is evidently being used for a public
purpose. However, we also note that the respondent spouses willingly
Ruling: entered into a lease agreement with Digitel for the use of the subject
The Philippines recognizes the vital role of information and
communication in nation building.As a consequence, we have adopted If in the future, the factual circumstances should change and the
a policy environment that aspires for the full development of respondents refuse to continue the lease, then the DOTC may initiate
communications infrastructure to facilitate the flow of information into, expropriation proceedings.
out of, and across the country. To this end, the DOTC has been
mandated with the promotion, development, and regulation of
dependable and coordinated networks of communication.

The DOTC encroached on the respondents' properties when it

constructed the local telephone exchange in Daet, Camarines Norte.
The exchange was part of the RTDP pursuant to the National
Telephone Program. We have no doubt that when the DOTC
constructed the encroaching structures and subsequently entered the
FLA with Digitel for their maintenance, it was carrying out a sovereign
function. Therefore, we agree with the DOTC's contention that these
are acts jure imperii that fall within the cloak of state immunity.

conclusive test. For instance, the maintenance of parks is not a source

G.R. No. L-29993 October 23, 1978
8. of income for the nonetheless it is private undertaking as distinguished
LAUDENCIO TORIO, ET. AL. vs. from the maintenance of public schools, jails, and the like which are
ANGELITA, ANITA, ERNESTO, NORMA, VIRGINIA, There can be no hard and fast rule for purposes of
determining the true nature of an undertaking or function of a
REMEDIOS and ROBERTO, all surnamed FONTANILLA, and
municipality; the surrounding circumstances of a particular case are to
be considered and will be decisive. The basic element, however
beneficial to the public the undertaking may be, is that it is
governmental in essence, otherwise. the function becomes private or
The Municipal Council of Malasiqui, Pangasinan, passed a proprietary in character. Easily, no governmental or public policy of the
resolution whereby "it resolved to manage the 1959 Malasiqui town
state is involved in the celebration of a town fiesta.
fiesta celebration. Another resolution was also passed creating the
"1959 Malasiqui 'Town Fiesta Executive Committee" which in turn
organized a sub-committee on entertainment and stage. The council
appropriated an amount for the construction of 2 stages, one for the
9. G.R. No. L-52179 April 8, 1991
"zarzuela" and another for the cancionan Jose Macaraeg supervised
the construction of the stage. The "zarzuela" then began but before
the dramatic part of the play was reached, the stage collapsed and
Vicente Fontanilla who was at the rear of the stage was pinned
underneath. Fontanilia was taken to the hospital where he died in the FACTS:
afternoon of the following day. At about 7am of December 16, 1965, a collision occurred
The heirs of Vicente Fontanilia filed a complaint against involving a passenger jeepney driven by Bernardo Balagot (owned by
the Estate of Macario Nieveras), a gravel and sand truck driven by
Municipality. Answering the complaint defendant municipality invoked
Jose Manandeg (owned by Tanquilino Velasquez), and a dump truck of
inter alia the principal defense that as a legally and duly organized
the Municipality of San Fernando, La Union and driven by Alfredo
public corporation it performs sovereign functions and the holding of a
Bislig. Due to the impact, several passengers of the jeepney including
town fiesta was an exercise of its governmental functions from which
Laureano Bania Sr. died as a result of the injuries they sustained and
no liability can arise to answer for the negligence of any of its agents.
four others suffered varying degrees of physical injuries.
ISSUE: WON the defendant Municipality was performing sovereign The private respondents instituted a complaint for damages
functions therefore immune from suit. against the Estate of Macario Nieveras and Bernardo Balagot, owner
and driver, respectively, of the passenger jeepney. However, the
HELD: NO. aforesaid defendants filed a Third Party Complaint against the
Holding a fiesta even if the purpose is to commemorate a petitioner and the driver of a dump truck of petitioner.
religious or historical event of the town is in essence an act for the Petitioner raised as one of its defenses the non-suability of the
special benefit of the community and not for the general welfare of the State.
public performed in pursuance of a policy of the state. The mere fact
that the celebration, as claimed was not to secure profit or gain but ISSUE: WON the Municipality of San Fernando is immune from suit.
merely to provide entertainment to the town inhabitants is not a

Anent the issue of whether or not the municipality is liable for the handling solicitor, to file the required Answer within the period
the torts committed by its employee, the test of liability of the prayed for in his motion for extension.
municipality depends on whether or not the driver, acting in behalf of It is contended that the respondent Judge violated the
the municipality, is performing governmental or proprietary functions. Constitution and the fundamental rule that government funds are
In the case at bar, the driver of the dump truck of the exempt from execution or garnishment when he caused the issuance
municipality insists that "he was on his way to the Naguilian river to of the writ of execution against the Republic.
get a load of sand and gravel for the repair of San Fernando's
municipal streets." We already stressed in the case of Palafox, ISSUE: WON the Republic can invoke immunity from suit.
et. al. vs. Province of Ilocos Norte, the District Engineer, and the
Provincial Treasurer (102 Phil 1186) that "the construction or HELD:
maintenance of roads in which the truck and the driver worked at the It is settled that when the State gives its consent to be sued,
time of the accident are admittedly governmental activities." it does not thereby necessarily consent to an unrestrained execution
We arrive at the conclusion that the municipality cannot be held liable against it. Tersely put, when the State waives its immunity, all it
for the torts committed by its regular employee, who was then does, in effect, is to give the other party an opportunity to prove, if it
engaged in the discharge of governmental functions. Hence, the death can, that the state has a liability.
of the passenger tragic and deplorable though it may be The functions and public services rendered by the State
imposed on the municipality no duty to pay monetary compensation. cannot be allowed to paralyzed or disrupted by the diversion of public
funds from their legitimate and specific objects, as appropriated by

A.M. No. RTJ-05-1959

REPUBLIC OF THE PHILIPPINES vs. JUDGE VICENTE A. 11. G.R. Nos. 89898-99 October 1, 1990
HIDALGO, Presiding Judge of the Regional Trial Court of Manila,
Branch 37
DE GUZMAN, JR., as Judge RTC of Makati, Branch CXLII
Tarcila Laperal Mendoza filed an action for the annulment or
declaration of nullity of the title and deed of sale, reconveyance and/or
recovery of ownership and possession a property against the Republic
of the Philippinesin the RTC of Manila. FACTS:
It is also known as the Arlegui Residence which housed two The present petition for review is an off-shoot of expropriation
Philippine presidents and which now holds the Office of the Press proceedings initiated by petitioner Municipality of Makati against
Secretary and the News Information Bureau. private respondent Admiral Finance Creditors Consortium, Inc., Home
The case was initially dismissed by the presiding Judge of the Building System & Realty Corporation and one Arceli P. Jo, involving a
Manila RTC (Branch 35) on the ground of state immunity. The case parcel of land and improvements and registered in the name of the
was re-raffled to the Manila RTC (Branch 37), with respondent Vicente latter.
A. Hidalgo as presiding Judge. In an Order, Judge Hidalgo declared the It was certified that a bank account had been opened with the
Republic in default for failure of Solicitor Gabriel Francisco Ramirez, PNB Buendia Branch under petitioner's name made pursuant to the
provisions of Pres. Decree No. 42. After due hearing where the parties

presented their respective appraisal reports regarding the value of the 12. UP v. Dizon (G.R. No. 171182; August 23, 2012)
property, respondent RTC judge rendered a decision fixing the FACTS: University of the Philippines (UP) entered into a General
appraised value of the property at P5,291,666.00, and ordering Construction Agreement with respondent Stern Builders Corporation
petitioner to pay this amount minus the advanced payment which was
(Stern Builders) for the construction and renovation of the buildings in
earlier released to private respondent.
the campus of the UP in Los Bas. UP was able to pay its first and
Petitioner however refused to comply with the garnishment
despite its having two bank accounts in PNB. The first one was second billing. However, the third billing worth P273,729.47was not paid
dedicated for expropriation proceedings while the other was for public due to its disallowance by the Commission on Audit (COA). Thus, Stern
funds. The first bank account cannot cover the remaining amount due, Builders sued the UP to collect the unpaid balance.
while the other account had more than enough to satisfy the amount
due. Petitioner reasoned out that its funds at the PNB Buendia Branch On November 28, 2001, the RTC rendered its decision ordering UP to
could neither be garnished nor levied upon execution, for to do so
pay Stern Builders. Then on January 16, 2002, the UP filed its motion for
would result in the disbursement of public funds without the proper
reconsideration. The RTC denied the motion. The denial of the said
appropriation required under the law.
motion was served upon Atty. Felimon Nolasco (Atty.Nolasco) of the
ISSUE: WON the Municipality of Makati is exempt from paying just UPLB Legal Office on May 17, 2002. Notably, Atty.Nolascowas not the
compensation. counsel of record of the UP but the OLS inDiliman, Quezon City.

HELD: NO. Thereafter, the UP filed a notice of appeal on June 3, 2002. However,
For three years now, petitioner has enjoyed possession and
the RTC denied due course to the notice of appeal for having been filed
use of the subject property notwithstanding its inexcusable failure to
out of time. On October 4, 2002, upon motion of Stern Builders, the RTC
comply with its legal obligation to pay just compensation. Just
issued the writ of execution.
compensation means not only the correct determination of the amount
to be paid to the owner of the land but also the payment of the land
within a reasonable time from its taking. Without prompt payment, On appeal, both the CA and the High Court denied UPs petition. The
compensation cannot be considered "just" for the property owner is denial became final and executory. Hence, Stern Builders filed in the
made to suffer the consequence of being immediately deprived of his RTC its motion for execution despite their previous motion having
land while being made to wait for a long period. already been granted and despite the writ of execution having already
The State's power of eminent domain should be exercised
issued. On June 11, 2003, the RTC granted another motion for execution
within the bounds of fair play and justice. In the case at bar,
filed on May 9, 2003 (although the RTC had already issued the writ of
considering that valuable property has been taken, the compensation
to be paid fixed and the municipality is in full possession and utilizing execution on October 4, 2002). Consequently, the sheriff served notices
the property for public purpose, for three (3) years, the Court finds of garnishment to the UPs depositary banks and the RTC ordered the
that the municipality has had more than reasonable time to pay full release of the funds.
Aggrieved, UP elevated the matter to the CA. The CA sustained the
RTC.Hence, this petition.

ISSUES: 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
I. Was UP's funds validly garnished? sovereign immunity, it is only giving the plaintiff the chance to prove, if it
II.Has the UP's appeal dated June 3, 2002 been filed out of time? can, that the defendant is liable.

HELD: UP's funds, being government funds, are not subject to The Constitution strictly mandated that "no money shall be paid out of
garnishment. (Garnishment of public funds; suability vs. liability of the Treasury except in pursuance of an appropriation made by law." The
the State) execution of the monetary judgment against the UP was within the
primary jurisdiction of the COA. It was of no moment that a final
Despite its establishment as a body corporate, the UP remains to be a andexecutorydecision already validated the claim against the UP.
"chartered institution" performing a legitimate government function.
Irrefragably, the UP is a government instrumentality, performing the
States constitutional mandate of promoting quality and accessible
education. As a government instrumentality, the UP administers special
funds sourced from the fees and income enumerated under Act No. 13.G.R. No. 206484, June 29, 2016
1870 and Section 1 of Executive Order No. 714, and from the yearly
appropriations, to achieve the purposes laid down by Section 2 of Act ABECINA, RESPONDENTS.
1870, as expanded in Republic Act No. 9500. All the funds going into the
possession of the UP, including any interest accruing from the deposit of
such funds in any banking institution, constitute a "special trust fund," the
14.[ G.R. No. 171953, October 21, 2015 ]
disbursement of which should always be aligned with the UPs mission NATIONAL HOUSING AUTHORITY, PETITIONER, VS. ERNESTO
and purpose, and should always be subject to auditing by the COA. The ROXAS, RESPONDENT.
funds of the UP are government funds that are public in character. They
include the income accruing from the use of real property ceded to the DECISION
UP that may be spent only for the attainment of its institutional
objectives. BERSAMIN, J.:

The National Housing Authority (NHA), a government-owned and -

A marked distinction exists between suability of the State and its
controlled corporation created and existing under Presidential Decree
liability. As the Court succinctly stated in Municipality of San Fernando, No. 757,[1]may sue and be sued. However, no court should issue a writ
La Union v. Firme: A distinction should first be made between suability of execution upon any monetary judgment rendered against the NHA
and liability. "Suability depends on the consent of the state to be sued, unless such monetary judgment is first submitted to and passed upon by
liability on the applicable law and the established facts. The the Commission on Audit (COA).
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 The Case

Being challenged on appeal by the NHA is the adverse decision the reduction of the price to Pl,500.00/square meter,[13] pointing out
promulgated on February 20, 2006,[2] whereby the Court of Appeals that Lot 5 and Lot 6 were a substitution unilaterally imposed by the NHA
(CA) dismissed the NHA's petition for certiorari brought to nullify the that resulted in the increase of 144 square meters based on the technical
orders issued in Special Civil Action No. 93-060-MN entitled Ernesto description, and that although he desired to purchase the increased area,
Roxas v. National Housing Authority, et al.by the Regional Trial Court the purchase must be in accordance with the terms and conditions
(RTC), Branch 72, in Malabon City. The first order, dated May 3, 2002, contained in the order of payment and notice of award issued to him.
had granted the motion for the issuance of the writ of execution filed by After the NHA rejected his appeal,[14] he commenced in the RTC this
respondent Ernesto Roxas.[3] The other order, dated January 6, 2003, action for specific performance and damages, with prayer for the
had denied the NHA's motion for reconsideration.[4]The NHA had also issuance of a writ of preliminary injunction. He amended the
thereby assailed the writ of execution consequently issued on February complaint[15] to compel the NHA to comply with the terms and
24, 2003.[5]In its petition forcertiorari,the NHA insisted that the RTC conditions of the order of payment and the notice of award.
had thereby committed grave abuse of discretion amounting to lack or
excess of jurisdiction. The NHA countered in its answer[16]that Roxas' prayer to include in the
original contract the increase in lot measurement of 144 square meters
Antecedents was contrary to its existing rules and regulation; that he could not claim
more than what had been originally awarded to him; and that at the very
The NHA is charged, among others, with the development of the Dagat- least, his right in the additional area was limited only to first refusal.
dagatan Development Project (project) situated in Navotas, Metro
Manila.[6] On December 4, 1985, Roxas applied for commercial lots in On July 15, 1994, after trial, the RTC rendered judgment against the
the project, particularly Lot 9 and Lot 10 in Block 11, Area 3, Phase III A/ NHA,[17]decreeing:
B, with an area of 176 square meters, for the use of his business of buying
and selling gravel, sand and cement products.[7]The NHA approved his WHEREFORE, premises considered, judgment is hereby rendered in
application, and issued on December 6, 1985 the order of payment favor of plaintiff Ernesto Roxas and against defendant NHA, represented
respecting the lots. On December 27, 1985, the NHA issued the notice of by its General Manager and its Dagat-dagatan Development Project
award for the lots in favor of Roxas,[8] at P1,500.00/square meter. Manager, as follows:
[9]On the basis of the order of payment and the notice of award, Roxas 1. Declaring plaintiff Ernesto Roxas the legal awardee of subject lots 5
made his downpayment of P79,200.00.[10] A relocation/reblocking and 6 in the full total area thereof of 320 sq. meters;
survey resulted in the renumbering of Lot 9 to Lot 5 and Lot 10 to Lot 6
(subject lots).[11] He completed his payment for the subject lots on 2. Ordering defendant NHA, thru its General Manager Robert P. Balao
December 20, 1991. and the project Manager for its Dagat-dagatan Development Project
Evelyn V. Ramos, or whoever shall be the incumbents of the positions at
In the meanwhile, the NHA conducted a final subdivision project survey, the time of the enforcement hereof to execute the corresponding
causing the increase in the area of the subject lots from 176 to 320 Contract to Sell for the entire area of subject lots 5 and 6 totaling to 320
square meters. The NHA informed Roxas about the increase in the area sq. meters at the cost of PI,500.00 per sq. meter under the same terms
of the subject lots, and approved the award of the additional area of 144 and conditions as that provided for in the Order of Payment and Notice
square meters to him at P3,500.00/square meter.[12] Although of Award (Exhs. B and D), respectively, deducting whatever has already
manifesting his interest in acquiring the additional area, he appealed for been paid by plaintiff;

3. Ordering defendant NHA to pay plaintiff P30,000.00 by way of
reasonable Attorney's Fees. The NHA insists that the judgment of the RTC did not lie against it
The Writ of Preliminary Injunction issued in this case on January 31, because its submission to the litigation did not necessarily imply that the
1994 is hereby made permanent. Government had thereby given its consent to liability; and that the
money judgment awarded to Roxas could not be recovered by motion for
Costs against defendant NHA. execution but should have been first filed in the COA.[23]

SO ORDERED. Roxas counters that the main relief under the final and executory
judgment of the RTC directed the NHA to execute the contract to sell the
The NHA appealed in due course, but the CA affirmed the judgment of subject lots at the rate of P1,500.00/square meter as provided for in the
the RTC, prompting the NHA to seek to undo the adverse decision of the order of payment and the notice of award. He claims that the award of
CA through its petition for certiorari. On July 5, 2000, however, the attorney's fees in his favor was only incidental to the main relief of
Court dismissed the petition for certiorari. It later denied the NHA's specific performance; and argues that the Government abandons its
motion for reconsideration.[18] sovereign capacity and is treated like any other corporations whenever it
enters into a commercial transaction.[24]
On July 27, 2001, Roxas filed his motion for the issuance of the writ of
execution,[19] which the RTC granted on May 3, 2002.[20] The NHA Ruling of the Court
sought reconsideration, but its motion was denied on January 6, 2003.
Accordingly, on February 24, 2003, the RTC issued the writ of execution The appeal is partly meritorious.
to enforce the final and executory decision of July 15, 1994.[21]
First of all, the mantle of the State's immunity from suit did not extend
In order to prevent the execution, the NHA brought another petition to the NHA despite its being a government-owned and -controlled
forcertiorariin the CA, docketed as C.A.-G.R. SP No. 76468, imputing corporation. Under Section 6(i) of Presidential Decree No. 757, which
to the RTC grave abuse of discretion amounting to lack or excess of was its charter, the NHA could sue and be sued. As such, the NHA was
jurisdiction for ordering the execution of the judgment. not immune from the suit of Roxas.

On February 20, 2006, the CA dismissed the NFIA's petition And, secondly, for purposes of the implementation of the writ of
for certiorari through the presently assailed decision because it found execution, it is necessary to distinguish between, on the one hand, the
that the RTC did not gravely abuse its discretion amounting to lack or main relief adjudicated in the judgment of July 15, 1994, which was the
excess of jurisdiction in granting Roxas' motion for the issuance of the decree of specific performance as to the right of Roxas to acquire the
writ of execution and in issuing the writ of execution.[22] The CA subject lots at Pl,500.00/square meter as stated in the original
observed that the NHA was a government-owned and -controlled agreement between the parties, and, on the other, the secondary relief
corporation whose funds were not exempt from garnishment or for the attorney's fees of P30,000.00 to be paid by the NHA to Roxas.
execution; and ruled that Roxas did not need to first file his claim in the
COA. Section 12 of Presidential Decree No. 757 has authorized the NHA to
"determine, establish and maintain the most feasible and effective

program for the management or disposition of specific housing or government-owned or controlled corporations, including their
resettlement projects undertaken by [it]", and "[u]nless otherwise subsidiaries, and other self-governing boards, commissions,
decided by the Board, completed housing or resettlement projects shall or agencies of the Government, and as herein prescribed,
be managed and administered by [it]." The execution of the contract to including nongovernmental entities subsidized by the
sell by the NHA conformably with the main relief under the judgment government, those funded by donations through the
would be in the ordinary course of themanagementordispositionof the government, those required to pay levies or government
Dagat-dagatan Development Project undertaken by the NHA. In other share, and those for which the government has put up a
words, the NHA possessed the legal competence and authority to directly counterpart fund or those partly funded by the government,
afford the main relief without Roxas needing to first submit to the COA (bold underscoring supplied for emphasis)
the contract to sell for review and approval. To maintain otherwise is to
unconstitutionally grant to the COA the power of judicial review in As the text of the legal provision plainly shows, the audit jurisdiction of
respect of the decision of a court of law. the COA extends to all government-owned or -controlled corporations,
their subsidiaries, and other self-governing boards, commissions, or
However, settling or paying off the secondary relief for the attorney's fees agencies of the Government, as well as to all non-governmental entities
of 30,000.00, being a monetary obligation of the NHA, would not be in subsidized by the Government, or funded by donations through the
the usual course of the activities of the NHA under its charter. That such Government, or required to pay levies or government share, or for which
relief was the consequence of the suit that granted the main relief did not the Government has put up a counterpart fund, or those partly funded by
matter. Pursuant to Section 26 of Presidential Decree No. 1445, Roxas the Government. There is no distinction as to the class of claims.Ubi lex
should first bring it to the COA prior to its enforcement against the NHA. non distinguish nee nos distinguere debemos.[26] Indeed, a general
[25] Indeed, Section 26 specifically vested in the COA the power, term or phrase should not be reduced into parts and one part
authority and duty to examine, audit and settle "all debts and claims of distinguished from the other so as to justify its exclusion from the
any sort" due from or owing to the Government, or any of its operation of the law. In other words, there should be no distinction in
subdivisions, agencies, or instrumentalities, including government- the application of a statute where none is indicated. Corollary to this rule
owned and controlled corporations with original charters,viz.: is the principle that where the law does not make any exception, the
courts may not exempt something therefrom, unless there is compelling
Section 26. General jurisdiction. The authority and powers of the reason to the contrary.[27]
Commission shall extend to and comprehend all matters relating to
auditing procedures, systems and controls, the keeping of the general There is no question that the NHA could sue or be sued, and thus could
accounts of the Government, the preservation of vouchers pertaining be held liable under the judgment rendered against it. But the universal
thereto for a period of ten years, the examination and inspection of the rule remains to be that the State, although it gives its consent to be sued
books, records, and papers relating to those accounts; and the audit either by general or special law, may limit the claimant's action only up
andsettlement of the accounts of all persons respecting funds to the completion of proceedings anterior to the stage of execution. In
or property received or held by them in an accountable other words, the power of the court ends when the judgment is rendered
capacity, as well as the examination, audit, and settlement of because government funds and property may not be seized pursuant to
all debts and claims of any sort due from or owing to the writs of execution or writs of garnishment to satisfy such judgments. The
Government or any of its subdivisions, agencies and functions and public services of the State cannot be allowed to be
instrumentalities. The said jurisdiction extends to all paralyzed or disrupted by the diversion of public fund from their

legitimate and specific objects, and as appropriated by law. The rule is used have already been previously appropriated and
based on obvious considerations of public policy. Indeed, the disbursed.
disbursements of public funds must be covered by the corresponding
appropriation as required by law.[28] This resolves a Petition for Review on Certiorari3 assailing
the Decision4 dated February 27, 2004 and
WHEREFORE, the Court PARTLY GRANTS the petition for review Resolution5 dated September 19, 2006 of the Court of
oncertiorari; andMODIFIESthe writ of execution dated February 24, Appeals. The Decision and Resolution affirmed the
2003 by enjoining the respondent to file his claim for attorney's fees with National Labor Relations Commission Resolutions dated
the Commission on Audit pursuant to Presidential Decree No. 1445. May 10, 20026 and June 21, 20027 dismissing petitioner's
appeal for failure to file the appeal within the
SO ORDERED. reglementary period.

G.R. No. 174747, March 09, 2016
15. Asset Privatization Trust was a government entity created
REPUBLIC OF THE PHILIPPINES REPRESENTED BY under Proclamation No. 50 dated December 8, 1986 for
PRIVATIZATION AND MANAGEMENT the purpose of conserving, provisionally managing, and
OFFICE, Petitioners, v. NATIONAL LABOR RELATIONS disposing of assets that have been identified for
BISUDECO CHAPTER/GEORGE EMATA, DOMINGO is the exclusive bargaining agent for the rank-and-file
REBANCOS, NELSON BERINA, ROBERTO TIRAO, employees of Bicolandia Sugar Development Corporation,
AMADO VILLOTE, AND BIENVENIDO a corporation engaged in milling and producing sugar.
FELINA, Respondents.
Since the 1980s, Bicolandia Sugar Development
Corporation had been incurring heavy losses.9 It obtained
loans from Philippine Sugar Corporation and Philippine
DECISION National Bank, secured by its assets and properties.10

LEONEN, J.: Under Proclamation No. 50, as amended, Administrative
Order No. 14 dated February 3, 1987, the Deed of
Under Proclamation No. 50, Series of 1986, 1 no Transfer dated February 27, 1987, and the Trust
employer-employee relationship is created by the Agreement dated February 27, 1987,11 Philippine National
acquisition of Asset Privatization Trust (now Privatization Bank ceded its rights and interests over Bicolandia Sugar
and Management Office) of government assets for Development Corporation's loans to the government
privatization. It is not obliged to pay for any money through Asset Privatization Trust.12
claims arising from employer-employee relations except
when it voluntarily holds itself liable to pay. These money Sometime in 1992, the Asset Privatization Trust, pursuant
claims, however, must be filed within the three-year to its mandate to dispose of government properties for
period under Article 2912 of the Labor Code. Once liability privatization, decided to sell the assets and properties of
is determined, a separate money claim must be brought Bicolandia Sugar Development Corporation. On
before the Commission on Audit, unless the funds to be September 1, 1992, it issued a Notice of Termination to

Bicolandia Sugar Development Corporation's employees, orders. Such appeal may be entertained only on any of
advising them that their services would be terminated the following grounds:
within 30 days. NASUCIP/BISUDECO Chapter received
the Notice under protest.18 ....
Petitioner received a copy of the Labor Arbiter's Decision
On January 14, 2000, the Labor Arbiter rendered the on January 26, 2000.50 It had 10 days, or until February
Decision22 dismissing the Complaint for lack of merit. The 7, 2000,51 to file its appeal. However, it filed its
Labor Arbiter found that there was no union busting when Memorandum of Appeal only on February 8,
Asset Privatization Trust and Philippine Sugar Corporation 2000.52 Petitioner did not explain the reason for its delay.
disposed of Bicolandia Sugar Development Corporation's
assets and properties since Asset Privatization Trust was Petitioner's disregard of procedural rules resulted in the
merely disposing of a non-performing asset of denial of its appeal before the National Labor Relations
government, pursuant to its mandate under Proclamation Commission and its subsequent Petition for Certiorari
No. 50. before the Court of Appeals. In its Petition for Review
before this Court, petitioner still did not explain its delay
ISSUE: First, whether there was an employer-employee in filing the Memorandum of Appeal. It merely insisted
relationship between petitioner Privatization and that its case should have been resolved on the merits.
Management Office (then Asset Privatization Trust) and
private respondents NACUSIP/BISUDECO Chapter Procedural rules are designed to facilitate the orderly
employees, and thus, whether petitioner is liable to pay administration of justice.53 In labor cases, however,
the separation benefits of private respondents George procedural rules are not to be applied "in a very rigid and
Emata, Bienvenido Felina, Domingo Rebancos, Jr., Nelson technical sense"54 if its strict application will frustrate,
Berina, Armando Villote, and Roberto Tirao; rather than promote, substantial justice.55

Liberality favors the laborer.56 However, this case is also

HELD: Before proceeding to the substantive issues of the brought against a government entity. If the government
case, petitioner's procedural misstep before the National entity is found liable, its liability will necessarily entail the
Labor Relations Commission must first be addressed. dispensation of public funds. Thus, its basis for liability
must be subjected to strict scrutiny.
It is settled that appeal is not a right but a mere
statutory privilege. It may only be exercised within the Even assuming that we grant the plea of liberality, the
manner provided by law.49 In labor cases, the perfection Petition will still be denied.
of an appeal is governed by the Labor Code. Article 223

Art. 223. Appeal. Decisions, awards, or orders of the

Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or

G.R. No. 77765 August 15, 1988

SEBASTIAN COSCULLUELA vs. G.R. No. 101949 December 1, 1994
OF THE PHILIPPINES, represented by NATIONAL THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of
IRRIGATION ADMINISTRATION the Regional Trial Court of Makati, Branch 61 and STARBRIGHT
The Republic of the Philippines filed a complaint with the Court FACTS:
of First Instance of Iloilo to expropriate two parcels of land in the This petition arose from a controversy over a parcel of land,
municipality of Barotac, Iloilo owned by petitioner Sebastian Lot 5-A, located in the Municipality of Paraaque, Metro Manila and
Cosculluela and one Mita Lumampao, for the construction of the canal registered in the name of petitioner. Said Lot 5-A is contiguous to Lots
network of the Barotac Irrigation Project. 5-B and 5-D registered in the name of the Philippine Realty
The trial court rendered a decision granting the expropriation Corporation (PRC). The three lots were sold to Ramon Licup, through
and ordered the public respondent to pay Lumampao, the sum of Msgr. Domingo A. Cirilos, Jr., acting as agent to the sellers. Later,
P20,000 and Cosculluela, the sum of P200,000.00. Licup assigned his rights to the sale to private respondent, Starbright
The Republic contends that the funds of the National Irrigation Enterprises.
Authority (NIA) are government funds and therefore, cannot be The squatters refused to vacate the lots sold to private
disbursed without a government appropriation. respondent so a dispute arose as to who of the parties has the
responsibility of evicting and clearing the land of squatters occurred.
ISSUE: WON the Republic is exempt from paying the just Complicating the relations of the parties was the sale by petitioner of
compensation demanded by the petitioner in view of non- Lot 5-A to Tropicana Properties and Development Corporation
disbursement of funds without prior public appropriation. (Tropicana).
Private respondent filed a complaint for annulment of the sale
HELD: NO. of the three parcels of land, and specific performance and damages
One of the basic principles enshrined in our Constitution is against petitioner, represented by the Papal Nuncio, and three other
that no person shall be deprived of his private property without due defendants: namely, Msgr. Domingo A. Cirilos, Jr., the PRC and
process of law; and in expropriation cases, an essential element of Tropicana.
due process is that there must be just compensation whenever private
property is taken for public use. ISSUE: WON the petitioner Holy See is immune from suit.
Just compensation means not only the correct determination
of the amount to be paid to the owner of the land but also the HELD: YES.
payment of the land within a reasonable time from its taking. The logical question is whether the foreign state is engaged in
the activity in the regular course of business. If the foreign state is not
engaged regularly in a business or trade, the particular act or
transaction must then be tested by its nature. If the act is in pursuit of
a sovereign activity, or an incident thereof, then it is an act jure
imperii, especially when it is not undertaken for gain or profit.

Lot 5-A was acquired by petitioner as a donation from the The doctrine of immunity from suit will not apply and may not be
Archdiocese of Manila. The donation was made not for commercial invoked where the public official is being sued in his private and
purpose, but for the use of petitioner to construct thereon the official personal capacity as an ordinary citizen. The cloak of protection
afforded the officers and agents of the government is removed the
place of residence of the Papal Nuncio. The right of a foreign sovereign
moment they are sued in their individual capacity. This situation
to acquire property, real or personal, in a receiving state, necessary
usually arises where the public official acts without authority or in
for the creation and maintenance of its diplomatic mission, is excess of the powers vested in him
recognized in the 1961 Vienna Convention on Diplomatic Relations. A foreign agent, operating within a territory, can be cloaked with
In Article 31(a) of the Convention, a diplomatic envoy is immunity from suit but only as long as it can be established that he is
granted immunity from the civil and administrative jurisdiction of the acting within the directives of the sending state. The consent of the
receiving state over any real action relating to private immovable host state is an indispensable requirement of basic courtesy between
the two sovereigns.
property situated in the territory of the receiving state which the
The job description of Scalzo has tasked him to conduct
envoy holds on behalf of the sending state for the purposes of the
surveillance on suspected drug suppliers and, after having ascertained
mission. If this immunity is provided for a diplomatic envoy, with all
the target, to inform local law enforcers who would then be expected
the more reason should immunity be recognized as regards the
to make the arrest. In conducting surveillance activities on Minucher,
sovereign itself, which in this case is the Holy See.
later acting as the poseur-buyer during the buy-bust operation, and
then becoming a principal witness in the criminal case against
Minucher, Scalzo hardly can be said to have acted beyond the scope of
his official function or duties.
18. G.R. No. 142396.February 11, 2003
All told, this Court is constrained to rule that respondent Arthur
KHOSROW MINUCHER vs.HON. COURT OF APPEALS and Scalzo, an agent of the United States Drug Enforcement Agency
ARTHUR SCALZO allowed by the Philippine government to conduct activities in the
country to help contain the problem on the drug traffic, is entitled to
FACTS: the defense of state immunity from suit.
Sometime in May 1986, an Information for violation of Section 4
of Republic Act No. 6425, otherwise also known as the Dangerous
19. Arigo vs Swift
Drugs Act of 1972, was filed against petitioner Khosrow Minucher and
one Abbas Torabian. The criminal charge followed a buy-bust
Case Digest GR 206510 Sept 14, 2014
operation conducted by the Philippine police narcotic agents in the
house of Minucher, an Iranian national, where a quantity of heroin, a Facts:

prohibited drug, was said to have been seized. The narcotic agents
were accompanied by private respondent Arthur Scalzo who would, in In 2013, the USS Guardian of the US Navy ran aground on an area near
due time, become one of the principal witnesses for the the Tubbataha Reefs, a marine habitat of which entry and certain human
prosecution. On 08 January 1988, Presiding Judge Eutropio Migrino activities are prevented and aorded protection by a Philippine law. The
rendered a decision acquitting the two accused.
grounding incident prompted the petitioners to seek for issuance of Writ
of Kalikasan with TEPO from the SC.

ISSUE: WON respondent Scalzo can invoke immunity from suit.


Among those impleaded are US ocials in their capacity as correlation with the principle of States as sovereign equals par in
commanding ocers of the US Navy. As petitioners argued, they were parem non habet non imperium bars the exercise of jurisdiction by
impleaded because there was a waiver of immunity from suit between the court over their persons.

US and PH pursuant to the VFA terms.

Issue 2:W/N the US government may still be held liable for damages
Petitioners claimed that the grounding, salvaging and post-salvaging caused to the Tubbataha Reefs

operations of the USS Guardian violated their constitutional rights to a

balanced and healthful ecology since these events caused and continue Yes.The US government is liable for damages in relation to the
to cause environmental damage of such magnitude as to aect other grounding incident under the customary laws of navigation.

provinces surrounding the Tubbataha Reefs. Aside from damages, they

sought a directive from the SC for the institution of civil, administrative
The conduct of the US in this case, when its warship entered a
and criminal suits for acts committed in violation of environmental laws restricted area in violation of RA 10067 and caused damage to the
and regulations in connection with the grounding incident. They also TRNP reef system, brings the matter within the ambit of Article 31 of the
prayed for the annulment of some VFA provisions for being
UNCLOS. While historically, warships enjoy sovereign immunity from
suit as extensions of their flag State, Art. 31 of the UNCLOS creates an
exception to this rule in cases where they fail to comply with the rules
Issue 1:W/Nthe US Government has given its consent to be sued and regulations of the coastal State regarding passage through the
through the VFA
latters internal waters and the territorial sea.

No.The general rule on states immunity from suit applies in this case.

Although the US to date has not ratified the UNCLOS, as a matter of

long-standing policy, theUS considers itself bound by customary
First, any waiver of State immunity under the VFA pertains only international rules on the traditional uses of the oceans, which is
tocriminaljurisdictionand not to special civil actions such as for the codified in UNCLOS.

issuance of the writ of kalikasan. Hence, contrary to petitioners claim,

the US government could not be deemed to have waived its immunity
As to the non-ratification by the US, it must be noted that the US
from suit.
refusal to join the UNCLOS was centered on its disagreement with
UNCLOS regime of deep seabed mining (Part XI) which considers the
Second,the US respondents were sued in their ocial capacity as oceans and deep seabed commonly owned by mankind. Such has
commanding ocers of the US Navy who have control and supervision nothing to do with the acceptance by the US of customary international
over the USS Guardian and its crew. Since the satisfaction of any rules on navigation. (Justice Carpio)

judgment against these ocials would require remedial actions and the
appropriation of funds by the US government, the suit is deemed to be
Hence, non-membership in the UNCLOS does not mean that the US
one against the US itself. Thus, the principle of State Immunity in will disregard the rights of the Philippines as a Coastal State over its

internal waters and territorial sea. It is thus expected of the US to bear and binding agreement, the parties are required as a matter of
international responsibility under Art. 31 in connection with the USS international law to abide by its terms and provisions.A petition under
Guardian grounding which adversely aected the Tubbataha reefs. ##
theRules on Writ of Kalikasanis not the proper remedy to assail the
constitutionality of its provisions.

Other Issues

Claim for Damages Caused by Violation of Environmental Laws Must be

Filed Separately
20. G.R. No. 125865. January 28, 200
The invocation of US federal tort laws and even common law is PHILIPPINES
improper considering that it is the VFA which governs disputes involving
US military ships and crew navigating Philippine waters in pursuance of
Petitioner is an economist working with the Asian Development
the objectives of the agreement.
Bank (ADB). Sometime in 1994, for allegedly uttering defamatory
words against fellow ADB worker Joyce Cabal, he was charged before
the Metropolitan Trial Court (MeTC) of Mandaluyong City with two
As it is, the waiver of State immunity under the VFA pertains only
counts of grave oral defamation.
tocriminal jurisdictionand not to special civil actions. Since jurisdiction
Petitioner was arrested by virtue of a warrant issued by the
cannot be had over the respondents for being immuned from suit, there MeTC. After fixing petitioners bail, the MeTC released him to the
is no way damages which resulted from violation of environmental laws custody of the Security Officer of ADB. The next day, the MeTC judge
could be awarded to petitioners.
received an "office of protocol" from the DFA stating that petitioner is
covered by immunity from legal process under Section 45 of the
Agreement between the ADB and the Philippine Government regarding
In any case, theRules onWrit of Kalikasanprovides that a criminal case the Headquarters of the ADB (hereinafter Agreement) in the country.
against a person charged with a violation of an environmental law is to Based on the said protocol communication that petitioner is immune
be filed separately. Hence, a ruling on the application or non-application from suit, the MeTC judge without notice to the prosecution dismissed
of criminal jurisdiction provisions of the VFA to a US personnel who may the two criminal cases.
be found responsible for the grounding of the USS Guardian, would be
premature and beyond the province of a petition for a writ of Kalikasan.
ISSUE: WON petitioner Liang is immune from suit.

Challenging the Constitutionality of a Treaty Via a Petition for the Slandering a person could not possibly be covered by the
Issuance of Writ of Kalikasan is Not Proper
immunity agreement because our laws do not allow the commission of
a crime, such as defamation, in the name of official duty. It is well-
settled principle of law that a public official may be liable in his
The VFA was duly concurred in by the Philippine Senate and has been
personal private capacity for whatever damage he may have caused
recognized as a treaty by the US as attested and certified by the duly
by his act done with malice or in bad faith or beyond the scope of his
authorized representative of the US government. The VFA being a valid authority or jurisdiction.

respect to acts performed by them in their official capacity, except when the
SEPARATE CONCURRING OPINION OF JUSTICE PUNO: Bank waives immunity. In other words, officials and employees of the ADB
are subject to the jurisdiction of the local courts for their private acts,
The Charter of the ADB provides under Article 55(i) that officers and notwithstanding the absence of a waiver of immunity.
employees of the bank shall be immune from legal process with respect to
acts performed by them in their official capacity except when the Bank waives Considering that bank officials and employees are covered by immunity only
immunity. Section 45 (a) of the ADB Headquarters Agreement accords the for their official acts, the necessary inference is that the authority of the
same immunity to the officers and staff of the bank. There can be no dispute Department of Affairs, or even of the ADB for that matter, to certify that
that international officials are entitled to immunity only with respect to they are entitled to immunity is limited only to acts done in their official
acts performed in their official capacity, unlike international capacity. Stated otherwise, it is not within the power of the DFA, as the
organizations which enjoy absolute immunity agency in charge of the executive departments foreign relations, nor the ADB,
as the international organization vested with the right to waive immunity, to
Clearly, the most important immunity to an international official, in the invoke immunity for private acts of bank official and employees, since no such
discharge of his international functions, is immunity from local prerogative exists in the first place. If the immunity does not exist, there is
jurisdiction. There is no argument in doctrine or practice with the principle that nothing to certify.
an international official is independent of the jurisdiction of the local authorities
for his official acts. Those acts are not his, but are imputed to the
organization, and without waiver the local courts cannot hold him liable for
them. In strict law, it would seem that even the organization itself could
have no right to waive an officials immunity for his official acts. This
permits local authorities to assume jurisdiction over and individual for
an act which is not, in the wider sense of the term, his act at all. It is the
organization itself, as a juristic person, which should waive its own
immunity and appear in court, not the individual, except insofar as he
appears in the name of the organization.

Historically, international officials were granted diplomatic privileges and

immunities and were thus considered immune for both private and official
acts. In practice, this wide grant of diplomatic prerogatives was curtailed
because of practical necessity and because the proper functioning of the
organization did not require such extensive immunity for its officials. Thus,
the current status of the law does not maintain that states grant
jurisdictional immunity to international officials for acts of their private

Under the Vienna Convention on Diplomatic Relations, a diplomatic envoy is

immune from criminal jurisdiction of the receiving State for all acts, whether
private or official, and hence he cannot be arrested, prosecuted and punished
for any offense he may commit, unless his diplomatic immunity is waived.[ On
the other hand, officials of international organizations enjoy functional
immunities, that is, only those necessary for the exercise of the
functions of the organization and the fulfillment of its purposes. This is
the reason why the ADB Charter and Headquarters Agreement explicitly
grant immunity from legal process to bank officers and employees only with