Torio v.

Fontanilla
7/30/2014

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Constitutional Law. Political Law. Doctrine of State Immunity.

TORIO v. FONTANILLA
GR No. L-29993; October 23, 1978

FACTS:
On October 21, 1978, the Municipal Council of Malasiqui, Pangasinan passed Resolution No. 156
whereby it resolved to manage the 1959 Malasiqui town fiesta celebration on January 21, 22, and
23, 1959. Resolution No. 182 was also passed creating the town fiesta committee with Jose
Macaraeg as Chairman. The amount of P100.00 was also appropriated for the construction of two
stages, one for the zarzuela and the other for the cancionan. On January 22, while in the midst of
the zarzuela, the stage collapsed, pinning Vicente Fontanilla who died thereafter. The heirs of
Fontanilla filed a petition for recovery of damages. Defendant councilors contend that they are
merely acting as agents of the municipality.

ISSUE:
1)    Is the celebration of a town fiesta authorized by a municipal council a governmental or a
corporate function of the municipality?
2)    Are the councilors liable for the death of Fontanilla?

HELD:
The holding of the town fiesta in 1959 by the municipality was an exercise of a private or
proprietary function of municipality. The provision on Section 2282 of the Revised Administrative
Code simply gives authority to the municipality to celebrate a yearly fiesta but it does not impose
upon it a duty to observe one. It follows that under the doctrine of respondent-superior, the
municipality is held liable for damages for the death of Fontanilla. Since it is established that the
municipality was acting a proprietary function, it follows that it stands on the same footing as an
ordinary private corporation where officers are not held liable for the negligence of the corporation
merely because of their official relation to it. Thus, the municipal councilors are absolved from any
criminal liability for they did not directly participated in the defective construction of the stage. 
Leonardo Palafox v. Province of Ilocos Norte

Facts:
 Sabas Torralba was employed as the driver of Ilocos Norte and detailed to the
Office of the District Engineer
 While driving his truck, he ran over Proceto Palafox and the victim died.
 Sabas was prosecuted for homicide through reckless imprudence to which he
pleaded guilty.
 The heirs of Palafox instituted a civil case against the Province, District Engineer,
Provincial Treasurer and Sabas Torralba.

Issue: WON the Province of Ilocos Norte can be held liable? NO

Ratio:
This case highlights the general rule that local government units are not liable for
negligent acts of its employees while they are performing governmental functions or
duties. In this case, the driver Torralba was involved in the construction or
maintenance of roads which was a governmental duty. Therefore, the province
cannot be held liable for his negligent act.
Facts:

Sabas Torralba was employed as the driver of Ilocos Norte and detailed to the Office
of the District Engineer. While driving his truck, Sabas ran over Proceto Palafox
resulting to the latter’s death. Sabas was prosecuted
for homicidethrough reckless imprudence to which he pleaded guilty. The heirs of
Palafox instituted a civil case against him, the Province, the District Engineer and the
Provincial Treasurer.

Issue:

Whether or not the Province of Ilocos Norte can be held liable. 

Held: 

NO. The general rule is that local government units are not liable for negligent acts
of its employees while they are performing governmental functions or duties. In this
case, the driver was involved in the construction or maintenance of roads which was
a governmental duty. Therefore, the province cannot be held liable for
his negligent act. However tragic and deplorable it may be, the death of Palafox
imposed on the province no duty to pay monetary consideration. (Palafox v.
Province of Ilocos Norte, 102 Phil 1186)
Mobil Phil Inc vs Custom
Arrastre Service
Immunity from Suit
 
 
MOBIL PHIL INC VS CUSTOM ARRASTRE SERVICE
G.R. No. L-23139    18 SCRA 1120  December 17,
1966
MOBIL PHILIPPINES EXPLORATION, INC., plaintiff-
appellant,
vs.
CUSTOMS ARRASTRE SERVICE and BUREAU of
CUSTOMS, defendants-appellees
 

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Facts:
This case was filed by Mobil Phil Exploration Inc.
against the Customs Arrastre Service and the Bureau of
Customs to recover the value of the undelivered case of
rotary drill parts.
 
Four cases of rotary drill parts were shipped from
abroad, consigned to Mobil Philippines Exploration, Inc.
The shipment was discharged to the custody of the
Customs Arrastre Service, the unit of the Bureau of
Customs then handling arrastre operations therein. The
Customs Arrastre Service later delivered to the broker
of the consignee three cases only of the shipment.
Mobil Philippines Exploration, Inc filed suit in the Court
of First Instance of Manila against the Customs Arrastre
Service and the Bureau of Customs to recover the value
of the undelivered case plus other damages.
 
Defendants filed a motion to dismiss the complaint on
the ground that not being persons under the law,
defendants cannot be sued. Appellant contends that not
all government entities are immune from suit; that
defendant Bureau of Customs as operator of the
arrastre service at the Port of Manila, is discharging
proprietary functions and as such, can be sued by
private individuals.
 
 
Issues:
Whether or not both Customs Arrastre Service and the
Bureau of Customs can invoke state immunity.
 
Discussions:
The Bureau of Custom, is a part of Department of
Finance. It does not have a separate juridical
personality of its own apart from that of the national
government. Its primary function is governmental, that
of assessing and collecting lawful revenues from
imported articles and all other tariff and customs
duties, fees, charges, fines and penalties (Sec. 602, R.A.
1937). To this function, arrastre service is a necessary
incident. As stated in the law, agencies of the
government is not suable if it is performing
governmental functions and if it an unincorporated
government entity without a separate juridical
personality.
 
 

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Rulings:
Yes. The Supreme Court ruled that the Bureau of
Customs cannot be sued for recovery of money and
damages involving arrastre services, considering that
said arrastre function may be deemed proprietary,
because it is a necessary incident of the primary and
governmental function of the Bureau of Customs. The
Court ruled that the fact that a non-corporate
government entity performs a function proprietary in
nature does not necessarily result in its being suable. If
said non-governmental function is undertaken as an
incident to its governmental function, there is no waiver
thereby of the sovereign immunity from suit extended to
such government entity. The Supreme Court ruled that
the plaintiff should have filed its present claim to the
General Auditing Office, it being for money under the
provisions of Commonwealth Act 327, which state the
conditions under which money claims against the
Government may be filed.
 
PNB vs Pabalan
Implied Consent
 
 
 
PNB VS PABALAN
G.R. No. L-33112 83 SCRA 595 June 15, 1978
PHILIPPINE NATIONAL BANK, petitioner,
vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of
First Instance, Branch III, La Union, AGOO TOBACCO
PLANTERS ASSOCIATION, INC., PHILIPPINE VIRGINIA
TOBACCO ADMINISTRATION, and PANFILO P. JIMENEZ,
Deputy Sheriff, La Union, respondents.
 

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Facts:
The case was filed by petitioner requesting for
certiorari against the writ of execution authorized by
the Hon Judge Pabalan regarding the transfer of funds
amounting to P12,724.66 belonging to Philippine
Virginia Tobacco Administration (PVTA).
 
Philippine National Bank (PNB) of La Union filed an
administrative complaint against Judge Pabalan for
grave abuse of discretion, alleging that the latter failed
to recognize that the questioned funds are of public
character and therefore may not be garnished, attached
or levied upon. The PNB La Union Branch invoked the
doctrine of non-suability, putting a bar on the notice of
garnishment.
 
Issues:
1 Whether or not Philippine National Bank can be sued.
2 Whether or not the notice of garnishment of funds of
Philippine Virginia Tobacco deposited with the
petitioner bank is valid.
 
Discussions:
The consent of the state to be sued may be given
expressly or impliedly. In this case, Consent to be sued
was given impliedly when the State enters into a
commercial contract. When the State enters into a
contract, the State is deemed to have divested itself of
the mantle of sovereign immunity and descended to the
level of the ordinary individual. Hence, Funds of public
corporations could properly be made the object of a
notice of garnishment.
 

 
 
Rulings:
1 PVTA is also a public corporation with the same
attributes, a similar outcome is attributed. The
government has entered with them into a
commercial business hence it has abandoned its
sovereign capacity and has stepped down to the
 level of a corporation. Therefore, it is subject to
rules governing ordinary corporations and in effect
can be sued. Therefore, the petition of PNB La
Union is denied.
2 The Supreme Court ruled that the funds held by PNB is
subject for garnishment. Funds of public
corporations which can sue and be sued are not
exempt from garnishment. Thus, the writ of
execution be imposed immediately.
 
Republic vs Villasor
government funds are not
subject to garnishment
 
REPUBLIC VS VILLASOR
G.R. No. L-30671 54 SCRA 83 November 28, 1973
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. GUILLERMO P. VILLASOR, as Judge of the Court
of First Instance of Cebu, Branch I, THE PROVINCIAL
SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY,
and THE SHERIFF OF THE CITY OF MANILA, THE CLERK
OF COURT, Court of First Instance of Cebu, P. J.
KIENER CO., LTD., GAVINO UNCHUAN, AND
INTERNATIONAL CONSTRUCTION CORPORATION,
respondents
 
 

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Facts:
The case was filed by the Republic of the Philippines
requesting to nullify the ruling of The Court of First
Instance in Cebu in garnishing the public funds
allocated for the Arm Forces of the Philippines.
 
A decision was rendered in Special Proceedings in favor
of respondents P. J. Kiener Co., Ltd., Gavino Unchuan,
and International Construction Corporation, and against
the petitioner herein, confirming the arbitration award
in the amount of P1,712,396.40, subject of Special
Proceedings. The respondent Honorable Guillermo P.
Villasor, issued an Order declaring the said decision
final and executory, directing the Sheriffs of Rizal
Province, Quezon City and Manila to execute the said
decision. The corresponding Alia Writ of Execution was
issued. On the strength of the aforementioned Alias Writ
of Execution, the Provincial Sheriff of Rizal served
Notices of Garnishment with several Banks. The funds
of the Armed Forces of the Philippines on deposit with
Philippine Veterans Bank and PNB are public funds duly
appropriated and allocated for the payment of pensions
of retirees, pay and allowances of military and civilian
personnel and for maintenance and operations of the
AFP.
 
Petitioner, filed prohibition proceedings against
respondent Judge Villasor for acting in excess of
jurisdiction with grave abuse of discretion amounting to
lack of jurisdiction in granting the issuance of a Writ of
Execution against the properties of the AFP, hence the
notices and garnishment are null and void.
 
Issues:
3 Whether or not the state can be sued without its
consent.
4 Whether or not the notice of garnishment issued by
Judge Villasor is valid.
 
Discussions:
3 The provision of Sec 3 Article XVI declares that “the
State may not be sued without its consent”. This
provision is merely a recognition of the sovereign
character of the State and express an affirmation
of the unwritten rule insulating it from the
jurisdiction of the courts of justice. Another
justification is the practical consideration that the
demands and inconveniences of litigation will
divert time and resources of the State from the
more pressing matters demanding its attention, to
the prejudice of the public welfare.
4 As a general rule, whether the money is deposited by
way of general or special deposit, they remain
government funds and are not subject to
garnishment. An exception of the rule is a law or
ordinance that has been enacted appropriating a
specific amount to pay a valid government
obligation.
 
 

 
Rulings:
1 It is a fundamental postulate of constitutionalism
flowing from the juristic concept of sovereignty
that the state as well as its government is immune
from suit unless it gives its consent. A sovereign is
exempt from suit, not because of any formal
conception or obsolete theory, but on the logical
and practical ground that there can be no legal
right as against the authority that makes the law
on which the right depends. A continued adherence
to the doctrine of non-suability is not to be
deplored for as against the inconvenience that may
cause private parties, the loss of government
efficiency and the obstacle to the performance of
its multifarious functions are far greater is such a
fundamental principle were abandoned and the
availability of judicial remedy were not thus
restricted.
What was done by respondent Judge is not in
conformity with the dictates of the Constitution. From a
logical and sound sense from the basic concept of the
non-suability of the State, public funds cannot be the
object of a garnishment proceeding even if the consent
to be sued had been previously granted and the state
liability adjudged. Disbursements of public funds must
be covered by the corresponding appropriation as
required by law. The functions and public services
rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects, as
appropriated by law.
USA vs Ruiz
Doctrine of Immunity from Suit
 
 
 
Caption:       USA VS RUIZ
G.R. No. L-35645       136 scra 487   May 22, 1985
UNITED STATES OF AMERICA, CAPT. JAMES E.
GALLOWAY, WILLIAM I. COLLINS and ROBERT GOHIER,
petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court
of First Instance of Rizal and ELIGIO DE GUZMAN & CO.,
INC., respondents.
 

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Facts:
This is a petition to review, set aside certain orders and
restrain perpetually the proceedings done by Hon. Ruiz
for lack of jurisdiction on the part of the trial court.
 
The United States of America had a naval base in Subic,
Zambales. The base was one of those provided in the
Military Bases Agreement between the Philippines and
the United States. Sometime in May, 1972, the United
States invited the submission of bids for a couple of
repair projects. Eligio de Guzman land Co., Inc.
responded to the invitation and submitted bids.
Subsequent thereto, the company received from the US
two telegrams requesting it to confirm its price
proposals and for the name of its bonding company. The
company construed this as an acceptance of its offer so
they complied with the requests. The company received
a letter which was signed by William I. Collins of
Department of the Navy of the United States, also one
of the petitioners herein informing that the company did
not qualify to receive an award for the projects because
of its previous unsatisfactory performance rating in
repairs, and that the projects were awarded to third
parties. For this reason, a suit for specific performance
was filed by him against the US.
 
Issues:
Whether or not the US naval base in bidding for said
contracts exercise governmental functions to be able to
invoke state immunity.
 
Discussions:
The traditional role of the state immunity exempts a
state from being sued in the courts of another state
without its consent or waiver. This rule is necessary
consequence of the principle of independence and
equality of states. However, the rules of international
law are not petrified; they are continually and evolving
and because the activities of states have multiplied. It
has been necessary to distinguish them between
sovereign and governmental acts (jure imperii) and
private, commercial and proprietary acts (jure
gestionis). The result is that State immunity now
extends only to acts jure imperil. The restrictive
application of State immunity is now the rule in the
United States, the United Kingdom and other states in
western Europe.
 

 
 
Rulings:
Yes. The Supreme Court held that the contract relates
to the exercise of its sovereign functions. In this case
the projects are an integral part of the naval base which
is devoted to the defense of both the United States and
the Philippines, indisputably a function of the
government of the highest order, they are not utilized
for nor dedicated to commercial or business purposes.
 
The restrictive application of state immunity is proper
only when the proceedings arise out of commercial
transactions of the foreign sovereign. Its commercial
activities of economic affairs. A state may be
descended to the level of an individual and can thus be
deemed to have tacitly given its consent to be sued.
Only when it enters into business contracts.