 Animas vs PVAO, 174 SCRA 214
D. The Doctrine of State Immunity (Session 4)
1. Suits vs the Philippine State
 Article XVI, Section 3
 Republic v Feliciano, 148 SCRA 424 (1987)
 Philippine Agila Satellite v Lichauco, G.R. No. 134887
(2006)
 Sayson v Singson 54 SCRA 282)
 Republic v Purisima 78 SCRA 470 (1977)
 PNB v CIR, 81 SCRA 314 (1978)
 SSS v CA, 120 SCRA 707 (1983)
 Rayo v CFI, 110 SCRA 450 (1981)
 Farolan v CTA, 217 SCRA 298 (1993)
 Republic v Sandiganbayan, GR No. 85384 (1990)
 Froilan v Pan Oriental Shipping , 95 Phil 905 (1954)G.R.
L-6060
 Lim v Brownell 107 Phil 344 (1960)
 Santiago v Republic, 87 SCRA 294 (1978)
 Amigable v Cuenca 43 SCRA 360 (1972)
 Torio v Fontanilla 85 SCRA 99 (1978)
2. Suits vs Foreign States
 Arigo v Swift, G.R. 206510 (2014)
 The Holy See v Rosario, (December 17, 1994)
 USA v Ruiz, 136 SCRA 487 (1985)
 Minucher v CA, GR No. 76609 (1990)
 Rep. of Indonesia v Vinzon, GR 154705 (2003)
 WHO v Aquino, GR No. L-35131 (1972)
 DFA v NLRC, GR No. 113191 (1997)
3. Suits against Public Officers
 USA v Reyes, GR No. 79233 (1993)
 Shauf v CA 191 SCRA 713 (1990)
4. Execution vs the State
 Nessia v Fermin, 220 SCRA 615 (1993)
 Caloocan City v Allarde, GR No. 107721 (2003)
GR No. L-30044
Sayson et.al. vs. Singson
Ponente: Fernando, J.
Facts:
- On January 1967, the Office of the District Engineer in Cebu
requisitioned spare parts for the repair of a D-8 bulldozer.
- The requisition was signed by the District Engineer and the
Requisition Officer which was approved by the Secretary of Public
Works and Communications (PWC).
- On May 5, 1967 a public bidding was conducted in lieu of the
requisition and was awarded to Singkier Motor Service which was
owned by the respondent Felipe Singson.
- The winning bid price of Php 43,530 was approved by the Sec. of
PWC.
- The petitioner, Highway Auditor Lorenzo Sayson, received the
purchase voucher.
- He found the price reasonablei and approved payment of the
voucher but withheld 20% of the price, equivalent to PhP 8,706, until
supporting documents for the transaction was submitted to the
Supervising Auditor for review.
- However, after the documents were submitted, the General Auditing
Office found the transaction to be overpriced by at least PhP 40,000
based on the canvass done to various spare parts suppliers in
Manila.
- Malversation charges were filed against the district and civil
engineers involved. Consequently, a mandamus suit was filed by the
respondent compelling the government auditors to approve collection
of the 20% balance. The Courts of First Instance ruled in favor of the
 respondent. Thus, the petitioners filed this petition for certiorari to the
Supreme Court.
Issue: WON collection by the respondent is valid through a mandamus suit
filed against the petitioners
Doctrine: Money Claims to the Government; Doctrine of Non-Suability of the
State
Held/Ratio Decidendi:
- No. The respondent’s cause of action is a money claim against the
government for the payment of the balance of the spare parts cost.
- Even if the claim is valid, mandamus is not the remedy to enforce the
collection of such claim against the State but an ordinary action for
specific performance.
- The suit disguised as mandamus is actually a suit against the State
which cannot be entertained without the consent of the State.
- The respondent should have filed his claim with the General Auditing
Office under the provisions of Commonwealth Act 327 which
prescribes the conditions under which money claims against the
government may be filed.
- It is provided in the said act that all claims on settlements shall be
decided within 60 days by the Auditor General. Furthermore, appeals
Republic v. Purisima
Facts:
- A motion to dismiss was filed on September 7, 1972 by defendant Rice and
Corn Administration in a pending civil suit inthe sala of respondent Judge
for the collection of a money claim arising from an alleged breach of
contract, the plaintiff being private respondent Yellow Ball Freight Lines,
Inc.
- At that time, the leading case of Mobil Philippines Exploration,Inc. v. Customs
Arrastre Service where Justice Bengzon stressed the lack of jurisdiction of a
court to pass on the merits of a claim against any office or entity acting as
part of the machinery of the national government unless consent be
shown, had been applied in 53 other decisions. Respondent Judge Amante
P. Purisima of the Court of First Instance of Manila denied the motion to
dismiss dated October 4, 1972. Hence, the petition for certiorari and
prohibition.
Issue:
WON the respondent’s decision is valid
on decision must be submitted in writing, within 30 days from receipt
of such decision, to the President of the US, or President of the
Philippines, or Supreme Court of the Philippines if the appellant is a
private person or entity.
- It is further held that for consent from the state to be secured, the
State may require certain administrative proceedings to be had and
exhausted.
- The appeal by the party aggrieved can be brought to the judiciary
only after the consent has been made. However, in the case at bar,
there was no ruling from the Auditor General. Even if a ruling was
obtained, the proper court for the appeal should have been the
Supreme Court. The Court of First Instance could not legally act on
the matter.
- The decision of the Court of First Instance of Cebu was reversed and
set aside and the suit for mandamus against the petitioners was
dismissed.
Ruling:
No.
Rationale:
- The position of the Republic has been fortified with the explicit affirmation
found in this provision of the presentConstitution: "The State may not be
sued without its consent."
- "The doctrine of non-suability recognized in this jurisdiction even prior to
the effectivity of the [1935] Constitution is a logical corollary of the
positivist concept of law which, to para-phrase Holmes, negates the
assertion of any legal right as against the state, in itself the source of the
law on which such a right may be predicated. Nor is this all, even if such a
principle does give rise to problems, considering the vastly expanded role
of government enabling it to engage in business pursuits to promote the
general welfare, it is not obeisance to the analytical school of thought
alone that calls for its continued applicability. Nor is injustice thereby cause
private parties. They could still proceed to seek collection of their money
claims by pursuing the statutory remedy of having the Auditor General
pass upon them subject to appeal to judicial tribunals for final
adjudication. We could thus correctly conclude as we did in the cited
Providence Washington Insurance decision: "Thus the doctrine of non-
suability of the government without its consent, as it has operated in

practice, hardly lends itself to the charge that it could be the fruitful parent
of injustice, considering the vast and ever-widening scope of state
activities at present being undertaken. Whatever difficulties for private
claimants may still exist, is, from an objective appraisal of all factors,
minimal. In the balancing of interests, so unavoidable in the determination
of what principles must prevail if government is to satisfy the public weal,
the verdict must be, as it has been these so many years, for its continuing
recognition as a fundamental postulate of constitutional law." [
Switzerland General Insurance Co.,Ltd. v. Republic of the Philippines]
***The consent, to be effective, must come from the State acting through a duly
enacted statute as pointed out byJustice Bengzon in Mobil. Thus, whatever counsel
for defendant Rice and Corn Administration agreed to had no bindingforce on the
government
PNB VS CIR
G.R. No. L-32667 81 SCRA 214 January 31, 1978
PHILIPPINE NATIONAL BANK, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, GABRIEL V. MANANSALA and GILBERT P.
LORENZO, in his official capacity as authorized Deputy sheriff, respondents.
Facts:
- A writ of execution in favor of private respondent Gabriel V. Manansala
had previously been issued.
- He was the counsel of the prevailing party, the United Homesite
Employees and Laborers Association.
- The validity of the order assailed is challenged on two grounds:
 That the appointment of respondent Gilbert P. Lorenzo as authorized deputy
sheriff to serve the writ of execution was contrary to law and
 That the funds subject of the garnishment “may be public in character.” In thus
denying the motion to quash, petitioner contended that there was on the part
of respondent Court a failure to abide by authoritative doctrines amounting to
a grave abuse of discretion.
- The Philippine National Bank (PNB) moves to quash the notice of
garnishment is denied for the lack of merit.
- PNB is therefore ordered to comply within five days from receipt with the
‘notice of Garnishment’ dated May 6, 1970.”
- The petitioner filed a motion for reconsideration, but it was denied. Hence,
this certiorari petition.
Issues:
Whether or not the order denying motion to quash a notice of garnishment can be
stigmatized as a grave abuse of discretion.
Discussions:
According to the doctrine of state immunity, under suits against Government
Agencies:
“An incorporated Agency has a charter of its own that invests it with a separate
judicial personality. If the agency is incorporated, the test of suability is found in its
charter.”
From the opinion being penned by the great Chief Justice Marshall. As was pointed
out by him: “It is, we think, a sound principle, that when a government becomes a
partner in any trading company, it divests itself, so far as concerns the transactions
of that company, of its sovereign character, and takes that of a private citizen.
Instead of communicating to the company its privileges and its prerogatives, it
descends to a level with those with whom it associates itself, and takes the
character which belongs to its associates, and to the business which is to be
transacted.
Rulings:
No. Supreme Court ruled that there has not been a grave abuse of discretion. The
premise that the funds could be spoken of as public in character may be accepted in
the sense that the People’s Homesite and Housing Corporation was a government-
owned entity It does not follow though that they were exempt from garnishment.

As stated in “National Shipyard and Steel Corporation v. Court of Industrial
Relations”, a government owned and controlled corporation has a personality of its
own, distinct and separate from that of the Government. It may sue and be sued
and may be subjected to court processes just like any other corporation.
Justice Ozaeta held that it is well settled that when the government enters into
commercial business, it abandons its sovereign capacity and is to be treated like any
other corporation. By engaging in a particular business thru the instrumentality of a
corporation, the governmnent divests itself pro hac vice of its sovereign character,
so as to render the corporation subject to the rules of law governing private
corporations.
SSS vs. CA (120 SCRA 707)
FACTS:
- Spouses David and Socorro Cruz, applied and granted a real estate loan
by the SSS with residential lot located at Pateros, Rizal as collateral.
- The spouses Cruz complied with their monthly payments. When delayed
were incurred in their monthly payments SSS filed a petition for
foreclosure of their real estate mortgage executed by the spouses Cruz on
the ground that the spouses Cruz defaulted in payment,
- Pursuant for these application for foreclosure notices were published on
the second notice the counsel for spouses Cruz sent a letter to SSS
informing the latter that his clients are up to date in their payment of the
monthly amortization and the SSS should discontinued the publication of
the notices of foreclosure.
- This request remain unheaded, this spouses Cruz filed an action for
damages against SSS before RTC in Rizal.
- SSS invoking its immunity from suit being an agency of the government
performing government function.
- The trial court and court of appeal nevertheless awarded damages in favor
of spouses Cruz which was affirmed by court of appeal, Hence this petition.
ISSUE: Whether or not SSS is immune from suit.
HELD: Negative..
- The SSS has a distinct legal personality and it can be sued for damages.
- The SSS does not enjoy immunity from suit by express statutory consent. It
has incorporated power separate and distinct from the government.
- SSS own organic act specifically provides that it can sue and be sued in
court. These words “sue and be sued” embrace all civil process incident to
a legal action.
- So that even assuming that the SSS, as it claims, enjoys immunity from suit
as an entity performing governmental function, by virtue of the explicit
provision of the afore cited enabling law, the government must be deemed
to have waived immunity in respect of the SSS, although it does not
thereby concede its liability that statutory law has given to the private
citizen a remedy for the enforcement and protection of his rights. The SSS
thereby has been required to submit to the jurisdiction of the
court; subject to its right to interpose any lawful defense.
GAUDENCIO RAYO vs. COURT OF FIRST INSTANCE OF BULACAN G.R. No. L-55273-
83 December 19, 1981
FACTS:
- At the height of the infamous typhoon "Kading", the respondent opened
simultaneously all the three floodgates of the Angat Dam which resulted in
a sudden, precipitate and simultaneous opening of said floodgates several
towns in Bulacan were inundated.
- The petitioners filed for damages against the respondent corporation.
- Petitioners opposed the prayer of the respondents forn dismissal of the case
and contended that the respondent corporation is merely performing a
propriety functions and that under its own organic act, it can sue and be
sued in court.
ISSUE:
- W/N the respondent performs governmental functions with respect to the
management and operation of the Angat Dam.
- W/N the power of the respondent to sue and be sued under its organic
charter includes the power to be sued for tort.
HELD:
- The government has organized a private corporation, put money in it and
has allowed it to sue and be sued in any court under its charter.
- As a government owned and controlled corporation, it has a personality of
its own, distinct and separate from that of the government. Moreover, the
charter provision that it can sue and be sued in any court.

Froilan vs Pan Oriental Shipping
waiver of sovereign immunity
FROILAN VS PAN ORIENTAL SHIPPING
G.R. No. L-6060 September 30, 1954
FERNANDO A. FROILAN, plaintiff-appellee,
vs.
PAN ORIENTAL SHIPPING CO., defendant-appellant,
REPUBLIC OF THE PHILIPPINES, intervenor-appellee.
Facts:
- Plaintiff, Fernando Froilan filed a complaint against the defendant-
appellant, Pan Oriental Shipping Co., alleging that he purchased from the
Shipping Commission the vessel for P200,000, paying P50,000 down and
agreeing to pay the balance in instalments.
- To secure the payment of the balance of the purchase price, he executed a
chattel mortgage of said vessel in favor of the Shipping Commission. For
various reasons, among them the non-payment of the installments, the
Shipping Commission tool possession of said vessel and considered the
contract of sale cancelled. The Shipping Commission chartered and
delivered said vessel to the defendant-appellant Pan Oriental Shipping Co.
subject to the approval of the President of the Philippines. Plaintiff
appealed the action of the Shipping Commission to the President of the
Philippines and, in its meeting the Cabinet restored him to all his rights
under his original contract with the Shipping Commission. Plaintiff had
repeatedly demanded from the Pan Oriental Shipping Co. the possession of
the vessel in question but the latter refused to do so.
Plaintiff, prayed that, upon the approval of the bond accompanying his complaint, a
writ of replevin be issued for the seizure of said vessel with all its equipment and
appurtenances, and that after hearing, he be adjudged to have the rightful
possession thereof . The lower court issued the writ of replevin prayed for by
Froilan and by virtue thereof the Pan Oriental Shipping Co. was divested of its
possession of said vessel.
Pan Oriental protested to this restoration of Plaintiff ‘s rights under the contract of
sale, for the reason that when the vessel was delivered to it, the Shipping
Administration had authority to dispose of said authority to the property, Plaintiff
having already relinquished whatever rights he may have thereon. Plaintiff paid the
required cash of P10,000.00 and as Pan Oriental refused to surrender possession of
the vessel, he filed an action to recover possession thereof and have him declared
the rightful owner of said property. The Republic of the Philippines was allowed to
intervene in said civil case praying for the possession of the in order that the chattel
mortgage constituted thereon may be foreclosed.
Issues:
Whether or not the Court has jurisdiction over the intervenor with regard to the
counterclaim.
Discussions:
When the government enters into a contract, for the State is then deem to have
divested itself of the mantle of sovereign immunity and descended to the level of
the ordinary individual. Having done so, it becomes subject to judicial action and
processes.
Rulings:
Yes. The Supreme Court held that the government impliedly allowed itself to be
sued when it filed a complaint in intervention for the purpose of asserting claim for
affirmative relief against the plaintiff to the recovery of the vessel. The immunity of
the state from suits does not deprive it of the right to sue private parties in its own
courts. The state as plaintiff may avail itself of the different forms of actions open to
private litigants. In short, by taking the initiative in an action against a private party,
the state surrenders its privileged position and comes down to the level of the
 United States under the Trading with the Enemy Act, as amended, and for all such
defendant. The latter automatically acquires, within certain limits, the right to set costs and expenses of administration as may by law be charged against the property
up whatever claims and other defenses he might have against the state.
or proceeds thereof hereby transferred.
On November 15, 1948, the latter's son Benito E. Lim filed a formal notice of
claim to the property with the Philippine Alien Property Administrator On the theory
Lim, etc. vs. Brownell, Jr., etc.,
that the lots in question still belonged to Arsenia Enriquez. that they were mortgaged
G.R. No. L-8587
by her to the Mercantile Bank of China; that the mortgage having been foreclosed,
the property was sold at public auction during the war to the Japanese Asaichi
FACTS:
Kagawa, who, by means of threat and intimidation succeeded in preventing Arsenia
This is an appeal from an order of the Court of First Instance of Manila,
Enriquez from exercising her right of redemption; and that Kagawa never acquired
dismissing plaintiff's action for the recovery of real property for lack of jurisdiction
any valid title to the property because he was ineligible under the Constitution to
over the subject matter.
acquire residential land in the Philippines by reason of alien age.
The property in dispute consists of four parcels of land situated in Tondo,
On March 7, 1950, the claim was disallowed by the Vested Property Claims
City of Manila, with a total area of 29,151 square meters. The lands were, after the
Committee of the Philippine Alien Property Administrator, and copy of the decision
last world war, found by the Alien Property Custodian of the United States to be
disallowing the claim was received by claimant's counsel on the 15th of that month
registered in the name of Asaichi Kagawa, national of an enemy country, Japan, as
On November 13, 1950, the claimant Benito E. Lim, as administrator of the
evidenced by Transfer Certificates of Title Nos. 64904 to 65140,
intestate estate of Arsenia Enriquez, filed a complaint in the Court of First Instance of
On March 14, 1946, issued a vesting order on the authority of the Trading
Manila against the Philippine Alien Property Administrator (later substituted by the
with the Enemy Act of the United States, as amended, vesting in himself the
Attorney General of the United States) for the recovery of the property in question
ownership over two of the said lots, Lots Nos. 1 and 2
with back rents. The complaint was later amended to include Asaichi Kagawa as
On July, 6, 1948, the Philippine Alien Property Administrator (successor of
defendant.
the Alien Property Custodian) under the authority of the same statute issued a
supplemental vesting order, vesting in himself title to the remaining Lots Nos. 3 and
ISSUE:
4.
1. Whether or not Intervenor-Appellee (Republic of the Philippines) be sued?
On August 3, 1948, the Philippine Alien Property Administrator (acting on
behalf of the President of the United States) and the President of the Philippines,
HELD:
executed two formal agreements, one referring to Lots 1 and 2 and the other to Lots
1. No suit or claim for the return of said properties pursuant to Section 9 or 32
3 and 4, whereby the said Administrator transferred all the said four lots to the
(a) of the Trading with the Enemy Act was filed by Plaintiff within two years
Republic of the Philippines upon the latter's undertaking fully to indemnify the United
from the date of vesting, the “later” date and the last on which suit could be
States for all claims in relation to the property transferred, which claims are payable
by the United States of America or the Philippine Alien Property Administrator of the
 performs sovereign functions and the holding of a town fiesta was an exercise of its
brought. A condition precedent to a suit for the return of property vested
governmental functions from which no liability can arise to answer for the negligence
under Trading with the Enemy Act is that it should be filed not later than
of any of its agents. The defendant councilors, in turn, maintained that they merely
April 30, 1949, or within two years from the date of vesting, whichever is
acted as agents of the municipality in carrying out the municipal ordinance providing
later, but in computing the two years, the period during which there was
for the management of the town fiesta celebration and as such they are likewise not
pending a suitor claim for the return of the property of the Act shall be
liable for damages as the undertaking was not one for profit; furthermore, they had
excluded.
exercised due care and diligence in implementing the municipal ordinance. CFI held
that the municipal council exercised due diligence in selecting the person to construct
The court states that In view of the foregoing, the order appealed from
the stage and dismissed the complaint. CA reversed the decision and held all
insofar as it dismisses the complaint with respect to Lots 1 and 2 and the
defendants solidarily liable for damages.
claim for damages against the Attorney General of the United States and the
Republic of the Philippines, is affirmed, but revoked insofar as it dismisses
Issues:
the complaint with respect to Lots 3 and 4, as to which the case is hereby
1. Is the celebration of a town fiesta authorized by a municipal council a
remanded to the court below for further proceedings.
governmental or a corporate function of the municipality?
2. Is the municipality liable for the death of Fontanilla?
Torio vs. Fontanilla 3. Are the municipal councilors who enacted the ordinance and created the fiesta
committee liable for the death of Fontanilla?

Facts:
Held:

On October 21, 1978, the municipal council of Malasiqui, Pangasinan passed 2

resolutions: one for management of the town fiesta celebration and the other for the 1. The holding of the town fiesta in 1959 by the municipality of Malsiqui Pangasinan

creation of the Malasiqui Town Fiesta Executive Committee. The Executive was an exercise of a private or proprietary function of the municipality.

Committee, in turn, organized a sub-committee on entertainment and stage with

Jose Macaraeg as Chairman. The council appropriated the amount of P100.00 for the Section 2282 of the Chatter on Municipal Law of the Revised Administrative Code

construction of 2 stages, one for the "zarzuela" and another for the cancionan. While simply gives authority to the municipality to celebrate a yearly fiesta but it does not

the zarzuela was being held, the stage collapsed. Vicente Fontanilla was pinned impose upon it a duty to observe one. Holding a fiesta even if the purpose is to

underneath and died in the afternoon of the following day. Fontanilla’s heirs filed a commemorate a religious or historical event of the town is in essence an act for the

complaint for damages with the CFI of Manila. The defendants were the municipality, special benefit of the community and not for the general welfare of the

the municipal council and the municipal council members. In its Answer, defendant public performed in pursuance of a policy of the state. The mere fact that the

municipality argued that as a legally and duly organized public corporation it celebration, as claimed was not to secure profit or gain but merely to provide

entertainment to the town inhabitants is not a conclusive test. For instance, the
maintenance of parks is not a source of income for the nonetheless it is private
undertaking as distinguished from the maintenance of public schools, jails, and the
like which are for public service. No governmental or public policy of the state is
involved in the celebration of a town fiesta.
Municipal corporations exist in a dual capacity, and their functions are two fold. In
one they exercise the right springing from sovereignty, and while in the performance
of the duties pertaining thereto, their acts are political and governmental Their
officers and agents in such capacity, though elected or appointed by the are
nevertheless public functionaries performing a public service, and as such they are
officers, agents, and servants of the state. In the other capacity, the municipalities
exercise a private, proprietary or corporate right, arising from their existence as legal
persons and not as public agencies. Their officers and agents in the performance of
such functions act in behalf of the municipalities in their corporate or individual
capacity, and not for the state or sovereign power.
2. Under the doctrine of respondent superior, petitioner-municipality is liable for
damages for the death of Vicente Fontanilla because the accident was attributable to
the negligence of the municipality's officers, employees, or agents.
Art. 2176, Civil Code: Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. . .
Art. 2180, Civil Code: The obligation imposed by article 2176 is demandable not only
for one's own acts or omission, but also for those of persons for whom one is
responsible.
It was found that the stage was not strong enough considering that only P100.00 was
appropriate for the construction of two stages and while the floor of the "zarzuela"
stage was of wooden planks, the post and braces used were of bamboo material. The
collapse of the stage was also attributable to the great number of onlookers who
mounted the stage. The municipality and/or its agents had the necessary means
within its command to prevent such an occurrence. But they failed take the necessary
steps to maintain the safety of the stage, particularly, in preventing non-participants
or spectators from mounting and accumulating on the stage.
Municipality cannot evade ability and/or liability under the fact that it was Jose
Macaraeg who constructed the stage. The municipality acting through its municipal
council appointed Macaraeg as chairman of the sub-committee on entertainment
and in charge of the construction of the "zarzuela" stage. Macaraeg acted merely as
an agent of the Municipality. Under the doctrine of respondent superior mentioned
earlier, petitioner is responsible or liable for the negligence of its agent acting within
his assigned tasks.
3. The celebration of a town fiesta by the Municipality of Malasiqui was not a
governmental function. The legal consequence thereof is that the Municipality stands
on the same footing as an ordinary private corporation with the municipal council
acting as its board of directors. It is an elementary principle that a corporation has a
personality, separate and distinct from its officers, directors, or persons composing it
and the latter are not as a rule co-responsible in an action for damages for tort or
negligence culpa aquilla committed by the corporation's employees or agents unless
there is a showing of bad faith or gross or wanton negligence on their part. The
records do not show that municipal councilors directly participated in the defective
construction of the "zarzuela" stage or that they personally permitted spectators to
go up the platform. Thus, they are absolved from liability. (Torio vs. Fontanilla, GR
No. L-29993, October 23, 1978)