Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-30098 February 18, 1970
THE COMMSSONER OF PU!LC HGH"#$S a%& '(e #U)TOR GENER#L, petitioners,
vs.
HON. LOUR)ES P. S#N )EGO a* Pre*+&+%, -u&,e o. '(e Cour' o. F+r*' %*'a%/e o. R+0a1, !ra%/(
2, *+''+%, +% 3ue0o% C+'y, TEST#TE EST#TE OF N. T. H#SHM 4S5e/+a1 Pro/ee&+%,* No. 71131 o.
'(e Cour' o. F+r*' %*'a%/e o. Ma%+1a6 re5re*e%'e& by +'* -u&+/+a1 #&7+%+*'ra'or, To7a* N. Ha*(+7,
TOM#S N. H#SHM, 5er*o%a11y, a%& a* -u&+/+a1 #&7+%+*'ra'or o. '(e E*'a'e o. Ha*(+7, S5e/+a1
Pro/ee&+%,* No. 71131 o. '(e Cour' o. 8F+r*' +%*'a%/e o. Ma%+1a, #LL THE LEG#L OR
TEST#MENT#R$ HERS o. '(e E*'a'e o. Ha*(+7, M#NUEL# C. FLOREN)O, 5er*o%a11y a* )e5u'y
C1er9, Cour' o. F+r*' %*'a%/e o. R+0a1, 3ue0o% C+'y, !ra%/( 2, !EN-#MN G#RC# a* :S5e/+a1
S(er+..: a55o+%'e& by re*5o%&e%' -u&,e Lour&e* P. Sa% )+e,o, !EN-#MN ;. CORU<#, 5er*o%a11y
a%& a* C(+e. )o/u7e%'a'+o% S'a.., Le,a1 )e5ar'7e%', P(+1+55+%e Na'+o%a1 !a%9, a%& '(e
PHLPPNE N#TON#L !#N=, respondents.
Office of the Solicitor General for petitioners.
Paredes, Poblador, Nazareno, Abada and Tomacruz for respondent ud!e "ourdes P. #an $ie!o.
esus B. #antos for respondent Testate estate of N. T. %ashim.
ose A. Buendia for respondent Manuela C. &lorendo.
Emata, Ma!'a(as and Associates for respondent le!al heir ose %. %ashim.
Alberto ). *illaraza for respondents Estate of N.T. %ashim and Tomas N. %ashim.
Conrado E. Medina for respondent Philippine National Ban'.
Ben+amin *. Coru,a for and in his o(n behalf.

TEEH#N=EE, J.:
-n this special civil action for certiorari and prohibition, the Court declares null and void the t(o .uestioned orders
of respondent Court lev/in! upon funds of petitioner Bureau of Public %i!h(a/s on deposit (ith the Philippine
National Ban', b/ virtue of the fundamental precept that !overnment funds are not sub+ect to e0ecution or
!arnishment.
The bac'!round facts follo(1
)n or about November 23, 4563, the 7overnment of the Philippines filed a complaint for eminent domain in the
Court of &irst -nstance of Rizal
1
for the e0propriation of a parcel of land belon!in! to N. T. %ashim, (ith an area of
46,586 s.uare meters, needed to construct a public road, no( 'no(n as Epifanio de los #antos Avenue. )n
November 29, 4563, the 7overnment too' possession of the propert/ upon deposit (ith the Cit/ Treasurer of the
sum of P28,648.:6 fi0ed b/ the Court therein as the provisional value of all the lots needed to construct the road,
includin! %ashim;s propert/. The records of the e0propriation case (ere destro/ed and lost durin! the second (orld
(ar, and neither part/ too' an/ step thereafter to reconstitute the proceedin!s.
-n 459<, ho(ever, the estate of N.T. %ashim, deceased, throu!h its udicial Administrator, Tomas N. %ashim, filed a
mone/ claim (ith the =uezon Cit/ En!ineer;s )ffice in the sum of P922,:23.33, alle!in! said amount to be the fair
mar'et value of the propert/ in .uestion, no( alread/ converted and used as a public hi!h(a/. Nothin! havin!
come out of its claim, respondent estate filed on Au!ust :, 45:8, (ith the Court of &irst -nstance of Rizal, =uezon
Cit/ Branch, assi!ned to Branch ->, presided b/ respondent +ud!e,
>
a complaint for the recover/ of the fair mar'et
price of the said propert/ in the sum of P:?2,383.33 a!ainst the Bureau of Public %i!h(a/s, (hich complaint (as
amended on Au!ust 2:, 45:8, to include as additional defendants, the Auditor 7eneral and the Cit/ En!ineer of
=uezon Cit/.
3
The issues (ere +oined in the case (ith the filin! b/ then #olicitor 7eneral Arturo A. Alafriz of the #tate;s ans(er,
statin! that the %ashim estate (as entitled onl/ to the sum of P8,238.33 as the fair mar'et value of the propert/
at the time that the #tate too' possession thereof on November 29, 4563, (ith le!al interest thereon at :@ per
annum, and that said amount had been available and tendered b/ petitioner Bureau since 459<. The parties
thereafter (or'ed out a compromise a!reement, respondent estate havin! proposed on April 2<, 45::, a pa/ment
of P46.33 per s.. m. for its 46,586 s..m.Aparcel of land or the total amount of P235,3?:.33, e.uivalent to the
land;s total assessed value,
?
(hich (as confirmed, ratified and approved in November, 45:: b/ the Commissioner
of Public %i!h(a/s and the #ecretar/ of Public Bor's and Communications. )n November ?, 45::, the
Compromise A!reement subscribed b/ counsel for respondent estate and b/ then #olicitor 7eneral Antonio P.
Barredo, no( a member of this Court, (as submitted to the lo(er Court and under date of November <, 45::,
respondent +ud!e, as pra/ed for, rendered +ud!ment approvin! the Compromise A!reement and orderin!
petitioners, as defendants therein, to pa/ respondent estate as plaintiff therein, the total sum of P235,3?:.33 for
the e0propriated lot.
)n )ctober 43, 45:<, respondent estate filed (ith the lo(er Court a motion for the issuance of a (rit of e0ecution,
alle!in! that petitioners had failed to satisf/ the +ud!ment in its favor. -t further filed on )ctober 42, 45:<, an ex-
parte motion for the appointment of respondent Ben+amin 7arcia as special sheriff to serve the (rit of e0ecution.
No opposition havin! been filed b/ the #olicitor 7eneral;s office to the motion for e0ecution at the hearin! thereof
on )ctober 42, 45:<, respondent +ud!e, in an order dated )ctober 46, 45:<, !ranted both motions.
)n the same date, )ctober 46, 45:<, respondent 7arcia, as special sheriff, forth(ith served a Notice of
7arnishment, to!ether (ith the (rit of e0ecution dated )ctober 46, 45:<, issued b/ respondent Manuela C.
&lorendo as $eput/ Cler' of Court, on respondent Philippine National Ban', notif/in! said ban' that lev/ (as
thereb/ made upon funds of petitioners Bureau of Public %i!h(a/s and the Auditor 7eneral on deposit, (ith the
ban' to cover the +ud!ment of P235,3?:.33 in favor of respondent estate, and re.uestin! the ban' to repl/ to the
!arnishment (ithin five da/s. )n )ctober 4:, 45:<, three da/s before the e0piration of the fiveAda/ deadline,
respondent Ben+amin *. Coru,a in his capacit/ as Chief, $ocumentation #taff, of respondent ban';s "e!al
$epartment, alle!edl/ actin! in e0cess of his authorit/ and (ithout the 'no(led!e and consent of the Board of
$irectors and other ran'in! officials of respondent ban', replied to the notice of !arnishment that in compliance
there(ith, the ban' (as holdin! the amount of P235,3?:.33 from the account of petitioner Bureau of Public
%i!h(a/s. Respondent ban' alle!ed that (hen it (as served (ith Notice to $eliver Mone/ si!ned b/ respondent
7arcia, as special sheriff, on )ctober 4?, 45:<, it sent a letter to the officials of the Bureau of Public %i!h(a/s
notif/in! them of the notice of !arnishment.
Cnder date of )ctober 4:, 45:<, respondent estate further filed (ith the lo(er Court an ex-parte motion for the
issuance of an order orderin! respondent ban' to release and deliver to the special sheriff, respondent 7arcia, the
!arnished amount of P235,3?:.33 deposited under the account of petitioner Bureau, (hich motion (as !ranted b/
respondent +ud!e in an order of )ctober 4<, 45:<. )n the same da/, )ctober 4<, 45:<, respondent Coru,a
alle!edl/ ta'in! advanta!e of his position, authorized the issuance of a cashier;s chec' of the ban' in the amount
of P235,3?:.33, ta'en out of the funds of petitioner Bureau deposited in current account (ith the ban' and paid
the same to respondent estate, (ithout notice to said petitioner.
"ater on $ecember 23, 45:<, petitioners, throu!h then #olicitor 7eneral &eli0 *. Ma'asiar, (rote respondent ban'
complainin! that the ban' acted precipitatel/ in havin! delivered such a substantial amount to the special sheriff
(ithout affordin! petitioner Bureau a reasonable time to contest the validit/ of the !arnishment, not(ithstandin!
the ban';s bein! char!ed (ith le!al 'no(led!e that !overnment funds are e0empt from e0ecution or !arnishment,
and demandin! that the ban' credit the said petitioner;s account in the amount of P235,3?:.33, (hich the ban'
had allo(ed to be ille!all/ !arnished. Respondent ban' replied on anuar/ :, 45:5 that it (as not liable for the said
!arnishment of !overnment funds, alle!in! that it (as not for the ban' to decide the .uestion of le!alit/ of the
!arnishment order and that much as it (anted to (ait until it heard from the Bureau of Public %i!h(a/s, it (as
Dhelpless to refuse deliver/ under the teethD of the special order of )ctober 4<, 45:<, directin! immediate deliver/
of the !arnished amount.
Petitioners therefore filed on anuar/ 2<, 45:5 the present action a!ainst respondents, in their capacities as above
stated in the title of this case, pra/in! for +ud!ment declarin! void the .uestion orders of respondent Court.
Petitioners also sou!ht the issuance of a (rit of preliminar/ mandator/ in+unction for the immediate reimbursement
of the !arnished sum of P235,3?:.33, constitutin! funds of petitioner Bureau on deposit (ith the Philippine
National Ban' as official depositor/ of Philippine 7overnment funds, to the said petitioner;s account (ith the ban',
so as to forestall the dissipation of said funds, (hich the !overnment had allocated to its public hi!h(a/s and
infrastructure pro+ects. The Court ordered on anuar/ 84, 45:5 the issuance of the (rit a!ainst the principal
respondents solidaril/, includin! respondent +ud!e therein so that she (ould ta'e forth(ith all the necessar/
measures and processes to compel the immediate return of the said !overnment funds to petitioner Bureau;s
account (ith respondent ban'.
@
-n compliance (ith the (rit, respondent ban' restored the !arnished sum of P235,3?:.33 to petitioner Bureau;s
account (ith it.
A
The primar/ responsibilit/ for the reimbursement of said amount to petitioner Bureau;s account
(ith the respondent ban', ho(ever, rested solel/ on respondent estate, since it is the +ud!ment creditor that
received the amount upon the .uestioned e0ecution.
#tran!el/ enou!h, as appears no( from respondent ban';s memorandum in lieu of oral ar!ument,
7
(hat
respondent ban' did, actin! throu!h respondent Coru,a as its counsel, (as not to as' respondent estate to
reimburse it in turn in the same amount, but to file (ith the probate court (ith +urisdiction over respondent
estate,
8
a motion for the estate todeposit the said amount (ith it, purportedl/ in compliance (ith the (rit.
Respondent estate thereupon deposited (ith respondent ban' as a savings account the sum of P429,66:.33, on
(hich the ban' presumabl/ (ould pa/ the usual interest, besides. As to the balance of P<8,:83.33, this sum had
been in the interval paid as attorne/;s fees to Att/. esus B. #antos, counsel for the estate, b/ the administrator,
alle!edl/ (ithout authorit/ of the probate court.
9
Accordin!l/, respondent estate has not reimbursed the
respondent ban' either as to this last amount, and the ban' has complacentl/ not ta'en an/ steps in the lo(er
court to re.uire such reimbursement.
The ancillar/ .uestions no( belatedl/ raised b/ the #tate ma/ readil/ be disposed of. Petitioners ma/ not invo'e
the #tate;s immunit/ from suit, since the case belo( (as but a continuation in effect of the preA(ar e0propriation
proceedin!s instituted b/ the #tate itself. The e0propriation of the propert/, (hich no( forms part of Epifanio, de
los #antos Avenue, is a fait accompli and is not .uestioned b/ the respondent state. The onl/ .uestion at issue (as
the amount of the +ust compensation due to respondent estate in pa/ment of the e0propriated propert/, (hich
properl/ pertained to the +urisdiction of the lo(er court.
10
-t is elementar/ that in e0propriation proceedin!s, the
#tate precisel/ submits to the Court;s +urisdiction and as's the Court to affirm its la(ful ri!ht to ta'e the propert/
sou!ht to be e0propriated for the public use or purpose described in its complaint and to determine the amount of
+ust compensation to be paid therefor.
Neither ma/ the #tate impu!n the validit/ of the compromise a!reement e0ecuted b/ the #olicitor 7eneral on
behalf of the #tate (ith the approval of the proper !overnment officials, on the !round that it (as e0ecuted onl/ b/
the la(/er of respondent estate, (ithout an/ sho(in! of havin! been speciall/ authorized to bind the estate
thereb/, because such alle!ed lac' of authorit/ ma/ be .uestioned onl/ b/ the principal or client, and respondent
estate as such principal has on the contrar/ confirmed and ratified the compromise a!reement.
11
As a matter of
fact, the #olicitor 7eneral, in representation of the #tate, ma'es in the petition no pra/er for the annulment of the
compromise a!reement or of the respondent court;s decision approvin! the same.
)n the principal issue, the Court holds that respondent Court;s t(o .uestioned orders E4F for e0ecution of the
+ud!ment, in pursuance (hereof respondent deput/ cler' issued the correspondin! (rit of e0ecution and
respondent special sheriff issued the notice of !arnishment, and E2F for deliver/ of the !arnished amount of
P235,3?:.33 to respondent estate as +ud!ment creditor throu!h respondent special sheriff, are null and void on the
fundamental !round that !overnment funds are not sub+ect to e0ecution or !arnishment.
4. As earl/ as 4545, the Court has pointed out that althou!h the 7overnment, as plaintiff in e0propriation
proceedin!s, submits itself to the +urisdiction of the Court and thereb/ (aives its immunit/ from suit, the +ud!ment
that is thus rendered re.uirin! its pa/ment of the a(ard determined as +ust compensation for the condemned
propert/ as a condition precedent to the transfer to the title thereto in its favor, cannot be realized upon
e0ecution.
1>
The Court there added that it is incumbent upon the le!islature to appropriate an/ additional amount,
over and above the provisional deposit, that ma/ be necessar/ to pa/ the a(ard determined in the +ud!ment, since
the 7overnment cannot 'eep the land and dishonor the +ud!ment.
-n another earl/ case, (here the !overnment b/ an act of the Philippine "e!islature, e0pressl/ consented to be
sued b/ the plaintiff in an action for dama!es and (aived its immunit/ from suit, the Court ad+ud!ed the
7overnment as not bein! le!all/ liable on the complaint, since the #tate under our la(s (ould be liable onl/ for
torts caused b/ its special a!ents, speciall/ commissioned to carr/ out the acts complained of outside of such
a!ents; re!ular duties. Be held that the plaintiff (ould have to loo' to the le!islature for another le!islative
enactment and appropriation of sufficient funds, if the 7overnment intended itself to be le!all/ liable onl/ for the
dama!es sustained b/ plaintiff as a result of the ne!li!ent act of one of its emplo/ees.
13
The universal rule that (here the #tate !ives its consent to be sued b/ private parties either b/ !eneral or special
la(, it ma/ limit claimant;s action Donl/ up to the completion of proceedin!s anterior to the sta!e of e0ecutionD and
that the po(er of the Courts ends (hen the +ud!ment is rendered, since !overnment funds and properties ma/ not
be seized under (rits of e0ecution or !arnishment to satisf/ such +ud!ments, is based on obvious considerations of
public polic/. $isbursements of Public funds must be covered b/ the correspondin! appropriation as re.uired b/
la(. The functions and public services rendered b/ the #tate cannot be allo(ed to be paral/zed or disrupted b/ the
diversion of public funds from their le!itimate and specific ob+ects, as appropriated b/ la(.
Thus, as pointed out b/ the Court in Belleng vs. Republic,
1?
(hile the #tate has !iven its consent to be sued in
compensation cases, the pauperAclaimant therein must loo' specificall/ to the Compensation 7uarantee &und
provided b/ the Bor'men;s Compensation Act for the correspondin! disbursement in satisfaction of his claim, since
the #tate in Act 83<8, the !eneral la( (aivin! its immunit/ from suit Dupon an/ mone/ claim involvin! liabilit/
arisin! from contract e0press or implied,D imposed the limitation in #ec. ? thereof that Dno e0ecution shall issue
upon an/ +ud!ment rendered b/ an/ Court a!ainst the 7overnment of the EPhilippinesF under the provisions of this
ActGD and that other(ise, the claimant (ould have to prosecute his mone/ claim a!ainst the #tate under
Common(ealth Act 82?.
This doctrine (as a!ain stressed b/. the Court in Republic vs. Palacio,
1@
settin! aside as null and void the order of
!arnishment issued b/ the sheriff pursuant to the lo(er Court;s (rit of e0ecution on funds of the Pump -rri!ation
Trust &und in the account of the 7overnment;s -rri!ation #ervice Cnit (ith the Philippine National Ban'. The Court
emphasized then and reAemphasizes no( that +ud!ments a!ainst the #tate or its a!encies and instrumentalities in
cases (here the #tate has consented to be sued, operate merel/ to li.uidate and establish the plaintiff;s claimG
such +ud!ments ma/ not be enforced b/ (rits of e0ecution or !arnishment and it is for the le!islature to provide
for their pa/ment throu!h the correspondin! appropriation, as indicated in Act 83<8.
2. Respondent ban' and its Chief, $ocumentation #taff, respondent Coru,a have advanced t(o specious ar!uments
to +ustif/ their (ron!ful deliver/ of the !arnished public funds to respondent estate. Their first contention that the
said !overnment funds b/ reason of their bein! deposited b/ petitioner Bureau under a current account sub+ect to
(ithdra(al b/ chec', instead of bein! deposited as special trust funds, Dlost their 'ind and character as
!overnment funds,D
1A
is untenable. As the official depositar/ of the Philippine 7overnment, respondent ban' and
its officials should be the first ones to 'no( that all !overnment funds deposited (ith it b/ an/ a!enc/ or
instrumentalit/ of the !overnment, (hether b/ (a/ of !eneral or special deposit, remain !overnment funds, since
such !overnment a!encies or instrumentalities do not have an/ nonApublic or private funds of their o(n.
Their second contention that said !overnment funds lost their character as such Dthe moment the/ (ere deposited
(ith the respondent ban'D,
17
since the relation bet(een a depositor and a depositor/ ban' is that of creditor and
debtor, is +ust as untenable, absolutel/. #aid respondents shoc'in!l/ i!nore the fact that said !overnment funds
(ere deposited (ith respondent ban' as the official depositar/ of the Philippine 7overnment. Assumin! for the
nonce the creation of such relationship of creditor and debtor, petitioner Bureau thereb/ held a credit a!ainst
respondent ban' (hose obli!ation as debtor (as to pa/ upon demand of said petitionerAcreditor the public funds
thus deposited (ith itG even thou!h title to the deposited funds passes to the ban' under this theor/ since the
funds become min!led (ith other funds (hich the ban' ma/ emplo/ in its ordinar/ business, (hat (as !arnished
(as not the ban';s o(n funds but the credit of petitioner bureau a!ainst the ban' to receive pa/ment of its funds,
as a conse.uence of (hich respondent ban' delivered to respondent estate the !arnished amount of P235,3?:.33
belon!in! to said petitioner. Petitioner bureau;s credit a!ainst respondent ban' thereb/ never lost its character as a
credit representin! !overnment funds thus deposited. The moment the pa/ment is made b/ respondent ban' on
such deposit, (hat it pa/s out represents the public funds thus deposited (hich are not !arnishable and ma/ be
e0pended onl/ for their le!itimate ob+ects as authorized b/ the correspondin! le!islative appropriation. Neither
respondent ban' nor respondent Coru,a are the dul/ authorized disbursin! officers and auditors of the
7overnment to authorize and cause pa/ment of the public funds of petitioner Bureau for the benefit or private
persons, as the/ (ron!full/ did in this case.
8. Respondents ban' and Coru,a ne0t pretend that refusal on their part to obe/ respondent +ud!e;s order to
deliver the !arnished amount, D(hich is valid and bindin! unless annulled, (ould have e0posed them for contempt
of court.D
18
The/ ma'e no e0cuse for not havin! as'ed the lo(er court for time and opportunit/ to consult
petitioner Bureau or the #olicitor 7eneral (ith re!ard to the !arnishment and e0ecution of said deposited public
funds (hich (ere allocated to specific !overnment pro+ects, or for not havin! simpl/ replied to the sheriff that (hat
the/ held on deposit for petitioner Bureau (ere nonA!arnishable !overnment funds. The/ have not !iven an/
co!ent reason or e0planation, H char!ed as the/ (ere (ith 'no(led!e of the nullit/ of the (rit of e0ecution and
notice of !arnishment a!ainst !overnment funds, for in the earlier case ofRepublic vs. Palacio, supra, the/ had
then prudentl/ and timel/ notified the proper !overnment officials of the attempted lev/ on the funds of the
-rri!ation #ervice Cnit deposited (ith it, thus enablin! the #olicitor 7eneral to ta'e the correspondin! action to
annul the !arnishment H for their failure to follo( the same prudent course in this case. -ndeed, the Court is
appalled at the improper haste and lac' of circumspection (ith (hich respondent Coru,a and other responsible
officials of respondent ban' precipitatel/ allo(ed the !arnishment and deliver/ of the lar!e amount involved, all
(ithin the period of +ust four da/s, even before the e0piration of the fiveAda/ re!lementar/ period to repl/ to the
sheriff;s notice of !arnishment. &ailure on the #tate;s part to oppose the issuance of the (rit of e0ecution, (hich
(as patentl/ null and void as an e0ecution a!ainst !overnment funds, could not relieve them of their o(n
responsibilit/.
6. Respondents ban' and Coru,a further made common cause (ith respondent estate be/ond the le!al issues that
should solel/ concern them, b/ reason of their havin! (ron!full/ allo(ed the !arnishment and deliver/ of
!overnment funds, instead assailin! petitioners for not havin! come to court (ith Dclean handsD and assertin! that
in fairness, +ustice and e.uit/, petitioners should not impede, obstruct or in an/ (a/ dela/ the pa/ment of +ust
compensation to the land o(ners for their propert/ that (as occupied (a/ bac' in 4563. This matter of pa/ment of
respondent estate;s +ud!ment credit is of no concern to them as custodian and depositar/ of the public funds
deposited (ith them, (hereb/ the/ are char!ed (ith the obli!ation of assurin! that the funds are not ille!all/ or
(ron!full/ paid out.
#ince the/ have !one into the records of the e0propriation case, then it should be noted that the/ should have
considered the vital fact that at the time that the compromise a!reement therein (as e0ecuted in November, 45::,
respondent estate (as (ell a(are of the fact that the funds for the pa/ment of the propert/ in the amount of
P235,3?:.33 still had to be released b/ the Bud!et Commissioner and that at the time of the !arnishment,
respondent estate (as still ma'in! the necessar/ representations for the correspondin! release of such amount,
pursuant to the Bud!et Commissioner;s favorable
recommendation.
19
And (ith re!ard to the merits of the case, the/ should have li'e(ise considered that
respondent estate could have no complaint a!ainst the fair attitude of the authorities in not havin! insisted on their
ori!inal stand in their ans(er that respondent estate (as entitled onl/ to the sum of P8,238.33 as the fair mar'et
value of the propert/ at the time the #tate too' possession thereof on November 29, 4563, (ith le!al interests
thereon, but rather a!reed to pa/ therefor the !reatl/ revised and increased amount of P235,3?:.33 at P46.33 per
s.uare meter, not to mention the conse.uential benefits derived b/ said respondent from the construction of the
public hi!h(a/ (ith the resultant enhanced value of its remainin! properties in the area.
9. The manner in (hich respondent ban';s counsel and officials proceeded to compl/ (ith the (rit of preliminar/
mandator/ in+unction issued b/ the Court commandin! respondent estate, its +udicial administrator and
respondents ban' and Coru,a, in solidum, to reimburse forth(ith the account of petitioner Bureau in the !arnished
amount of P235,3?:.33, does not spea' (ell of their fidelit/ to the ban';s interests. &or (hile respondent ban' had
restored (ith its o(n funds the said amount of P235,3?:.33 to petitioner Bureau;s account, it has not re.uired
respondent estate as the part/ primaril/ liable therefor as the recipient of the !arnished amount to reimburse it in
turn in this same amount. Rather, said ban' officials have allo(ed respondent estate to 'eep all this time the (hole
amount of P235,3?:.33 (ron!full/ !arnished b/ it. &or as stated above, respondent ban' allo(ed respondent
estate merel/ to deposit (ith it as a savin!s account, of respondent estate, the lesser sum of P429,66:.33 on
(hich the ban' presumabl/ has paid and continues pa/in! respondent estate, besides the usual interest rates on
such savin!s accounts, and neither has it ta'en an/ steps to re.uire reimbursement to it from respondent estate of
the remainder of P<8,:83.33 (hich respondent estate of its o(n doin! and responsibilit/ paid b/ (a/ of attorne/;s
fees.
-t thus appears that all this time, respondent ban' has not been reimbursed b/ respondent estate as the part/
primaril/ liable for the (hole amount of P235,3?:.33 (ron!full/ and ille!all/ !arnished and received b/ respondent
estate. This !rave breach of trust and dereliction of dut/ on the part of respondent ban';s officials should be
brou!ht to the attention of respondent ban';s Board of $irectors and mana!ement for the appropriate
administrative action and other remedial action for the ban' to recover the dama!es it has been made to incur
thereb/.
:. The #olicitor 7eneral has li'e(ise .uestioned the le!alit/ of respondent Court;s )rder of )ctober 46, 45:<,
appointin! respondent 7arcia as Dspecial sheriffD for the purpose of effectin! service of the (rit of e0ecution,
simpl/ on respondent estate;s representation that it (as desirable Dfor a speed/ enforcement of the (rit.D
The Court finds this !eneral practice of the lo(er courts of appointin! Dspecial sheriffsD for the service of (rits of
e0ecution to be unauthorized b/ la(. The dut/ of e0ecutin! all processesD of the courts in civil cases, particularl/,
(rits of e0ecution, devolves upon the sheriff or his deputies, under #ection 4<8 of the Revised Administrative Code
and Rule 85, section < of the Rules of Court. Cnli'e the service of summons (hich ma/ be made, aside from the
sheriff or other proper court officers, Dfor special reasons b/ an/ person especiall/ authorized b/ the +ud!e of the
court issuin! the summonsD under Rule 46, section 9 of the Rules of Court, the la( re.uires that the responsibilit/
of servin! (rits of e0ecution, (hich involve the ta'in! deliver/ of mone/ or propert/ in trust for the +ud!ment
creditor, should be carried out b/ re!ularl/ bonded sheriffs or other proper court officers. E#ections 4<8 and 883,
Revised Administrative CodeF. The bond re.uired b/ la( of the sheriff is conditioned inter alia, Dfor the deliver/ or
pa/ment to the 7overnment, or the persons entitled thereto, of all the propert/ or sums of mone/ that shall
officiall/ come into his or their Ehis deputies;F handsD E#ection 883, idemF, and thus avoids the ris' of
embezzlement of such properties and mone/s.
#ection 4<9 of the Revised Administrative Code restrictivel/ authorizes the +ud!e of the Court issuin! the process
or (rit to deputize some suitable person onl/ D(hen the sheriff is part/ to an/ action or proceedin! or is other(ise
incompetent to serve process therein.D The onl/ other contin!enc/ provided b/ la( is (hen the office of sheriff is
vacant, and the +ud!e is then authorized, Din case of emer!enc/, EtoF ma'e a temporar/ appointment to the office
of sheriff ... pendin! the appointment and .ualification of the sheriff in due courseG and he ma/ appoint the deput/
cler' of the court or other officer in the !overnment service to act in said capacit/.D E#ection 4<5, idemF.
None of the above contin!encies havin! been sho(n to be present, respondent Court;s order appointin!
respondent 7arcia as Dspecial sheriffD to serve the (rit of e0ecution (as devoid of authorit/.
?. No civil liabilit/ attaches, ho(ever, to respondents special sheriff and deput/ cler', since the/ acted strictl/
pursuant to orders issued b/ respondent +ud!e in the dischar!e of her +udicial functions as presidin! +ud!e of the
lo(er court, and respondent +ud!e;s immunit/ from civil responsibilit/ covers them, althou!h the said orders are
herein declared null and void.
>0
ACC)R$-N7"I, the (rits of certiorari and prohibition are !ranted. The respondent court;s .uestioned )rders of
)ctober 46, and 4<, 45:<, are declared null and void, and all further proceedin!s in Civil Case No. =A?664 of the
Court of &irst -nstance of Rizal, =uezon Cit/, Branch -> are abated. The (rit of preliminar/ mandator/ in+unction
heretofore issued is made permanent, e0cept as to respondent +ud!e (ho is e0cluded therefrom, (ithout pre+udice
to an/ cause of action that private respondents ma/ have, inter se. Respondent estate and respondent Tomas N.
%ashim as pra/ed for b/ respondent Philippine National Ban' in its Ans(er, are ordered +ointl/ and severall/ to
reimburse said respondent ban' in the amount of P235,3?:.33 (ith le!al interest until the date of actual
reimbursement. Respondents Estate of N. T. %ashim, Philippine National Ban' and Ben+amin Coru,a are ordered
+ointl/ to pa/ treble costs.
The Cler' of Court is directed to furnish copies of this decision to the Board of $irectors and to the president of
respondent Philippine National Ban' for their information and appropriate action. #o ordered.
Concepcion, C.., Re!es, .B."., #i$on, %a&alintal, 'aldivar, Sanche$, Castro, (ernando and )illamor. ., concur.
Barredo, ., too& no part.
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. L-111@? Mar/( >1, 191A
E. MERRTT, plaintiffAappellant,
vs.
GO;ERNMENT OF THE PHLPPNE SL#N)S, defendantAappellant.
Crossfield and O*Brien for plaintiff.
+ttorne!-General +vance,a for defendant..
TRENT, J.B
This is an appeal b/ both parties from a +ud!ment of the Court of &irst -nstance of the cit/ of Manila in favor of the
plaintiff for the sum of P46,?64, to!ether (ith the costs of the cause.
Counsel for the plaintiff insist that the trial court erred E4F Din limitin! the !eneral dama!es (hich the plaintiff
suffered to P9,333, instead of P29,333 as claimed in the complaint,D and E2F Din limitin! the time (hen plaintiff (as
entirel/ disabled to t(o months and t(ent/Aone da/s and fi0in! the dama!e accordin!l/ in the sum of P2,:::,
instead of P:,333 as claimed b/ plaintiff in his complaint.D
The Attorne/A7eneral on behalf of the defendant ur!es that the trial court erred1 EaF in findin! that the collision
bet(een the plaintiff;s motorc/cle and the ambulance of the 7eneral %ospital (as due to the ne!li!ence of the
chauffeurG EbF in holdin! that the 7overnment of the Philippine -slands is liable for the dama!es sustained b/ the
plaintiff as a result of the collision, even if it be true that the collision (as due to the ne!li!ence of the chauffeurG
and EcF in renderin! +ud!ment a!ainst the defendant for the sum of P46,?64.
The trial court;s findin!s of fact, (hich are full/ supported b/ the record, are as follo(s1
-t is a fact not disputed b/ counsel for the defendant that (hen the plaintiff, ridin! on a motorc/cle, (as !oin!
to(ard the (estern part of Calle Padre &aura, passin! alon! the (est side thereof at a speed of ten to t(elve miles
an hour, upon crossin! Taft Avenue and (hen he (as ten feet from the south(estern intersection of said streets,
the 7eneral %ospital ambulance, upon reachin! said avenue, instead of turnin! to(ard the south, after passin! the
center thereof, so that it (ould be on the left side of said avenue, as is prescribed b/ the ordinance and the Motor
*ehicle Act, turned suddenl/ and une0pectedl/ and lon! before reachin! the center of the street, into the ri!ht side
of Taft Avenue, (ithout havin! sounded an/ (histle or horn, b/ (hich movement it struc' the plaintiff, (ho (as
alread/ si0 feet from the south(estern point or from the post place there.
B/ reason of the resultin! collision, the plaintiff (as so severel/ in+ured that, accordin! to $r. #aleeb/, (ho
e0amined him on the ver/ same da/ that he (as ta'en to the 7eneral %ospital, he (as sufferin! from a depression
in the left parietal re!ion, a (ould in the same place and in the bac' part of his head, (hile blood issued from his
nose and he (as entirel/ unconscious.
The mar's revealed that he had one or more fractures of the s'ull and that the !re/ matter and brain (as had
suffered material in+ur/. At ten o;cloc' of the ni!ht in .uestion, (hich (as the time set for performin! the
operation, his pulse (as so (ea' and so irre!ular that, in his opinion, there (as little hope that he (ould live. %is
ri!ht le! (as bro'en in such a (a/ that the fracture e0tended to the outer s'in in such manner that it mi!ht be
re!arded as double and the (ould be e0posed to infection, for (hich reason it (as of the most serious nature.
At another e0amination si0 da/s before the da/ of the trial, $r. #aleeb/ noticed that the plaintiff;s le! sho(ed a
contraction of an inch and a half and a curvature that made his le! ver/ (ea' and painful at the point of the
fracture. E0amination of his head revealed a notable read+ustment of the functions of the brain and nerves. The
patient apparentl/ (as sli!htl/ deaf, had a li!ht (ea'ness in his e/es and in his mental condition. This latter
(ea'ness (as al(a/s noticed (hen the plaintiff had to do an/ difficult mental labor, especiall/ (hen he attempted
to use his mone/ for mathematical calculations.
Accordin! to the various merchants (ho testified as (itnesses, the plaintiff;s mental and ph/sical condition prior to
the accident (as e0cellent, and that after havin! received the in+uries that have been discussed, his ph/sical
condition had under!one a noticeable depreciation, for he had lost the a!ilit/, ener!/, and abilit/ that he had
constantl/ displa/ed before the accident as one of the best constructors of (ooden buildin!s and he could not no(
earn even a half of the income that he had secured for his (or' because he had lost 93 per cent of his efficienc/.
As a contractor, he could no lon!er, as he had before done, climb up ladders and scaffoldin!s to reach the hi!hest
parts of the buildin!.
As a conse.uence of the loss the plaintiff suffered in the efficienc/ of his (or' as a contractor, he had to dissolved
the partnership he had formed (ith the en!ineer. Bilson, because he (as incapacitated from ma'in! mathematical
calculations on account of the condition of his le! and of his mental faculties, and he had to !ive up a contract he
had for the construction of the C/ Chaco buildin!.D
Be ma/ sa/ at the outset that (e are in full accord (ith the trial court to the effect that the collision bet(een the
plaintiff;s motorc/cle and the ambulance of the 7eneral %ospital (as due solel/ to the ne!li!ence of the chauffeur.
The t(o items (hich constitute a part of the P46,?64 and (hich are dra(n in .uestion b/ the plaintiff are EaF
P9,333, the a(ard a(arded for permanent in+uries, and EbF the P2,:::, the amount allo(ed for the loss of (a!es
durin! the time the plaintiff (as incapacitated from pursuin! his occupation. Be find nothin! in the record (hich
(ould +ustif/ us in increasin! the amount of the first. As to the second, the record sho(s, and the trial court so
found, that the plaintiff;s services as a contractor (ere (orth P4,333 per month. The court, ho(ever, limited the
time to t(o months and t(ent/Aone da/s, (hich the plaintiff (as actuall/ confined in the hospital. -n this (e thin'
there (as error, because it (as clearl/ established that the plaintiff (as (holl/ incapacitated for a period of si0
months. The mere fact that he remained in the hospital onl/ t(o months and t(ent/Aone da/s (hile the remainder
of the si0 months (as spent in his home, (ould not prevent recover/ for the (hole time. Be, therefore, find that
the amount of dama!es sustained b/ the plaintiff, (ithout an/ fault on his part, is P4<,3?9.
As the ne!li!ence (hich caused the collision is a tort committed b/ an a!ent or emplo/ee of the 7overnment, the
in.uir/ at once arises (hether the 7overnment is le!all/Aliable for the dama!es resultin! therefrom.
Act No. 269?, effective &ebruar/ 8, 4549, reads1
An Act authorizin! E. Merritt to brin! suit a!ainst the 7overnment of the Philippine -slands and authorizin! the
Attorne/A7eneral of said -slands to appear in said suit.
Bhereas a claim has been filed a!ainst the 7overnment of the Philippine -slands b/ Mr. E. Merritt, of Manila, for
dama!es resultin! from a collision bet(een his motorc/cle and the ambulance of the 7eneral %ospital on March
t(ent/Afifth, nineteen hundred and thirteenG
Bhereas it is not 'no(n (ho is responsible for the accident nor is it possible to determine the amount of dama!es,
if an/, to (hich the claimant is entitledG and
Bhereas the $irector of Public Bor's and the Attorne/A7eneral recommended that an Act be passed b/ the
"e!islature authorizin! Mr. E. Merritt to brin! suit in the courts a!ainst the 7overnment, in order that said
.uestions ma/ be decided1 No(, therefore,
B! authorit! of the -nited States, be it enacted b! the Philippine "egislature, that.
#ECT-)N 4. E. Merritt is hereb/ authorized to brin! suit in the Court of &irst -nstance of the cit/ of Manila a!ainst
the 7overnment of the Philippine -slands in order to fi0 the responsibilit/ for the collision bet(een his motorc/cle
and the ambulance of the 7eneral %ospital, and to determine the amount of the dama!es, if an/, to (hich Mr. E.
Merritt is entitled on account of said collision, and the Attorne/A7eneral of the Philippine -slands is hereb/
authorized and directed to appear at the trial on the behalf of the 7overnment of said -slands, to defendant said
7overnment at the same.
#EC. 2. This Act shall ta'e effect on its passa!e.
Enacted, &ebruar/ 8, 4549.
$id the defendant, in enactin! the above .uoted Act, simpl/ (aive its immunit/ from suit or did it also concede its
liabilit/ to the plaintiffJ -f onl/ the former, then it cannot be held that the Act created an/ ne( cause of action in
favor of the plaintiff or e0tended the defendant;s liabilit/ to an/ case not previousl/ reco!nized.
All admit that the -nsular 7overnment Ethe defendantF cannot be sued b/ an individual (ithout its consent. -t is
also admitted that the instant case is one a!ainst the 7overnment. As the consent of the 7overnment to be sued
b/ the plaintiff (as entirel/ voluntar/ on its part, it is our dut/ to loo' carefull/ into the terms of the consent, and
render +ud!ment accordin!l/.
The plaintiff (as authorized to brin! this action a!ainst the 7overnment Din order to fi0 the responsibilit/ for the
collision bet(een his motorc/cle and the ambulance of the 7eneral %ospital and to determine the amount of the
dama!es, if an/, to (hich Mr. E. Merritt is entitled on account of said collision, . . . .D These (ere the t(o .uestions
submitted to the court for determination. The Act (as passed Din order that said .uestions ma/ be decided.D Be
have DdecidedD that the accident (as due solel/ to the ne!li!ence of the chauffeur, (ho (as at the time an
emplo/ee of the defendant, and (e have also fi0ed the amount of dama!es sustained b/ the plaintiff as a result of
the collision. $oes the Act authorize us to hold that the 7overnment is le!all/ liable for that amountJ -f not, (e
must loo' else(here for such authorit/, if it e0ists.
The 7overnment of the Philippine -slands havin! been Dmodeled after the &ederal and #tate 7overnments in the
Cnited #tates,D (e ma/ loo' to the decisions of the hi!h courts of that countr/ for aid in determinin! the purpose
and scope of Act No. 269?.
-n the Cnited #tates the rule that the state is not liable for the torts committed b/ its officers or a!ents (hom it
emplo/s, e0cept (hen e0pressl/ made so b/ le!islative enactment, is (ell settled. DThe 7overnment,D sa/s ustice
#tor/, Ddoes not underta'e to !uarantee to an/ person the fidelit/ of the officers or a!ents (hom it emplo/s, since
that (ould involve it in all its operations in endless embarrassments, difficulties and losses, (hich (ould be
subversive of the public interest.D EClaussen vs. Cit/ of "uverne, 438 Minn., 654, citin! C. #. vs. Kir'patric', 5
Bheat, ?23G : ". Ed., 455G and Beers vs. #tates, 23 %o(., 92?G 49 ". Ed., 554.F
-n the case of %elvin vs. State E424 Cal., 4:F, the plaintiff sou!ht to recover dama!es from the state for personal
in+uries received on account of the ne!li!ence of the state officers at the state fair, a state institution created b/
the le!islature for the purpose of improvin! a!ricultural and 'indred industriesG to disseminate information
calculated to educate and benefit the industrial classesG and to advance b/ such means the material interests of
the state, bein! ob+ects similar to those sou!ht b/ the public school s/stem. -n passin! upon the .uestion of the
state;s liabilit/ for the ne!li!ent acts of its officers or a!ents, the court said1
No claim arises a!ainst an/ !overnment is favor of an individual, b/ reason of the misfeasance, laches, or
unauthorized e0ercise of po(ers b/ its officers or a!ents. ECitin! 7ibbons vs. C. #., < Ball., 2:5G Clodfelter vs.
#tate, <: N. C., 94, 98G 64 Am. Rep., 663G Chapman vs. #tate, 436 Cal., :53G 68 Am. #t. Rep., 49<G 7reen vs.
#tate, ?8 Cal., 25G Bourn vs. %art, 58 Cal., 824G 2? Am. #t. Rep., 238G #tor/ on A!enc/, sec. 845.F
As to the scope of le!islative enactments permittin! individuals to sue the state (here the cause of action arises
out of either fort or contract, the rule is stated in 8: C/c., 549, thus1
B/ consentin! to be sued a state simpl/ (aives its immunit/ from suit. -t does not thereb/ concede its liabilit/ to
plaintiff, or create an/ cause of action in his favor, or e0tend its liabilit/ to an/ cause not previousl/ reco!nized. -t
merel/ !ives a remed/ to enforce a pree0istin! liabilit/ and submits itself to the +urisdiction of the court, sub+ect to
its ri!ht to interpose an/ la(ful defense.
-n +pfelbacher vs. State E492 N. B., 466, advanced sheetsF, decided April 4:, 4549, the Act of 4548, (hich
authorized the brin!in! of this suit, read1
#ECT-)N 4. Authorit/ is hereb/ !iven to 7eor!e Apfelbacher, of the to(n of #ummit, Bau'esha Count/, Bisconsin,
to brin! suit in such court or courts and in such form or forms as he ma/ be advised for the purpose of settlin! and
determinin! all controversies (hich he ma/ no( have (ith the #tate of Bisconsin, or its dul/ authorized officers
and a!ents, relative to the mill propert/ of said 7eor!e Apfelbacher, the fish hatcher/ of the #tate of Bisconsin on
the Bar' River, and the mill propert/ of Evan %umphre/ at the lo(er end of Na!a(ic'a "a'e, and relative to the
use of the (aters of said Bar' River and Na!a(ic'a "a'e, all in the count/ of Bau'esha, Bisconsin.
-n determinin! the scope of this act, the court said1
Plaintiff claims that b/ the enactment of this la( the le!islature admitted liabilit/ on the part of the state for the
acts of its officers, and that the suit no( stands +ust as it (ould stand bet(een private parties. -t is difficult to see
ho( the act does, or (as intended to do, more than remove the state;s immunit/ from suit. -t simpl/ !ives
authorit/ to commence suit for the purpose of settlin! plaintiff;s controversies (ith the estate. No(here in the act
is there a (hisper or su!!estion that the court or courts in the disposition of the suit shall depart from (ell
established principles of la(, or that the amount of dama!es is the onl/ .uestion to be settled. The act opened the
door of the court to the plaintiff. -t did not pass upon the .uestion of liabilit/, but left the suit +ust (here it (ould
be in the absence of the state;s immunit/ from suit. -f the "e!islature had intended to chan!e the rule that
obtained in this state so lon! and to declare liabilit/ on the part of the state, it (ould not have left so important a
matter to mere inference, but (ould have done so in e0press terms. EMurdoc' 7rate Co. vs. Common(ealth, 492
Mass., 2<G 26 N.E., <96G < ". R. A., 855.F
-n #enning vs. State E428 Cal., 84:F, the provisions of the Act of 4<58, relied upon and considered, are as follo(s1
All persons (ho have, or shall hereafter have, claims on contract or for ne!li!ence a!ainst the state not allo(ed b/
the state board of e0aminers, are hereb/ authorized, on the terms and conditions herein contained, to brin! suit
thereon a!ainst the state in an/ of the courts of this state of competent +urisdiction, and prosecute the same to
final +ud!ment. The rules of practice in civil cases shall appl/ to such suits, e0cept as herein other(ise provided.
And the court said1
This statute has been considered b/ this court in at least t(o cases, arisin! under different facts, and in both it (as
held that said statute did not create an/ liabilit/ or cause of action a!ainst the state (here none e0isted before, but
merel/ !ave an additional remed/ to enforce such liabilit/ as (ould have e0isted if the statute had not been
enacted. EChapman vs. #tate, 436 Cal., :53G 68 Am. #t. Rep., 49<G Melvin vs. #tate, 424 Cal., 4:.F
A statute of Massachusetts enacted in 4<<? !ave to the superior court D+urisdiction of all claims a!ainst the
common(ealth, (hether at la( or in e.uit/,D (ith an e0ception not necessar/ to be here mentioned. -n construin!
this statute the court, in %urdoc& Grate Co. vs. Common/ealth E492 Mass., 2<F, said1
The statute (e are discussin! disclose no intention to create a!ainst the state a ne( and heretofore unreco!nized
class of liabilities, but onl/ an intention to provide a +udicial tribunal (here (ell reco!nized e0istin! liabilities can be
ad+udicated.
-n Sipple vs. State E55 N. I., 2<6F, (here the board of the canal claims had, b/ the terms of the statute of Ne(
Ior', +urisdiction of claims for dama!es for in+uries in the mana!ement of the canals such as the plaintiff had
sustained, Chief ustice Ru!er remar's1 D-t must be conceded that the state can be made liable for in+uries arisin!
from the ne!li!ence of its a!ents or servants, onl/ b/ force of some positive statute assumin! such liabilit/.D
-t bein! .uite clear that Act No. 269? does not operate to e0tend the 7overnment;s liabilit/ to an/ cause not
previousl/ reco!nized, (e (ill no( e0amine the substantive la( touchin! the defendant;s liabilit/ for the ne!li!ent
acts of its officers, a!ents, and emplo/ees. Para!raph 9 of article 4538 of the Civil Code reads1
The state is liable in this sense (hen it acts throu!h a special a!ent, but not (hen the dama!e should have been
caused b/ the official to (hom properl/ it pertained to do the act performed, in (hich case the provisions of the
precedin! article shall be applicable.
The supreme court of #pain in definin! the scope of this para!raph said1
That the obli!ation to indemnif/ for dama!es (hich a third person causes to another b/ his fault or ne!li!ence is
based, as is evidenced b/ the same "a( 8, Title 49, Partida ?, on that the person obli!ated, b/ his o(n fault or
ne!li!ence, ta'es part in the act or omission of the third part/ (ho caused the dama!e. -t follo(s therefrom that
the state, b/ virtue of such provisions of la(, is not responsible for the dama!es suffered b/ private individuals in
conse.uence of acts performed b/ its emplo/ees in the dischar!e of the functions pertainin! to their office,
because neither fault nor even ne!li!ence can be presumed on the part of the state in the or!anization of branches
of public service and in the appointment of its a!entsG on the contrar/, (e must presuppose all foresi!ht humanl/
possible on its part in order that each branch of service serves the !eneral (eal an that of private persons
interested in its operation. Bet(een these latter and the state, therefore, no relations of a private nature !overned
b/ the civil la( can arise e0cept in a case (here the state acts as a +udicial person capable of ac.uirin! ri!hts and
contractin! obli!ations. E#upreme Court of #pain, anuar/ ?, 4<5<G <8 ur. Civ., 26.F
That the Civil Code in chapter 2, title 4:, boo' 6, re!ulates the obli!ations (hich arise out of fault or ne!li!enceG
and (hereas in the first article thereof. No. 4532, (here the !eneral principle is laid do(n that (here a person (ho
b/ an act or omission causes dama!e to another throu!h fault or ne!li!ence, shall be obli!ed to repair the dama!e
so done, reference is made to acts or omissions of the persons (ho directl/ or indirectl/ cause the dama!e, the
follo(in! articles refers to this persons and imposes an identical obli!ation upon those (ho maintain fi0ed relations
of authorit/ and superiorit/ over the authors of the dama!e, because the la( presumes that in conse.uence of
such relations the evil caused b/ their o(n fault or ne!li!ence is imputable to them. This le!al presumption !ives
(a/ to proof, ho(ever, because, as held in the last para!raph of article 4538, responsibilit/ for acts of third persons
ceases (hen the persons mentioned in said article prove that the/ emplo/ed all the dili!ence of a !ood father of a
famil/ to avoid the dama!e, and amon! these persons, called upon to ans(er in a direct and not a subsidiar/
manner, are found, in addition to the mother or the father in a proper case, !uardians and o(ners or directors of
an establishment or enterprise, the state, but not al(a/s, e0cept (hen it acts throu!h the a!enc/ of a special
a!ent, doubtless because and onl/ in this case, the fault or ne!li!ence, (hich is the ori!inal basis of this 'ind of
ob+ections, must be presumed to lie (ith the state.
That althou!h in some cases the state mi!ht b/ virtue of the !eneral principle set forth in article 4532 respond for
all the dama!e that is occasioned to private parties b/ orders or resolutions (hich b/ fault or ne!li!ence are made
b/ branches of the central administration actin! in the name and representation of the state itself and as an
e0ternal e0pression of its soverei!nt/ in the e0ercise of its e0ecutive po(ers, /et said article is not applicable in the
case of dama!es said to have been occasioned to the petitioners b! an executive official, actin! in the e0ercise of
his po(ers, in proceedin!s to enforce the collections of certain propert/ ta0es o(in! b/ the o(ner of the propert/
(hich the/ hold in sublease.
That the responsibilit/ of the state is limited b/ article 4538 to the case (herein it acts through a special agent
Eand a special a!ent, in the sense in (hich these (ords are emplo/ed, is one (ho receives a definite and fi0ed
order or commission, forei!n to the e0ercise of the duties of his office if he is a special officialF so that in
representation of the state and bein! bound to act as an a!ent thereof, he e0ecutes the trust confided to him. This
concept does not appl/ to an/ e0ecutive a!ent (ho is an emplo/ee of the actin! administration and (ho on his
o(n responsibilit/ performs the functions (hich are inherent in and naturall/ pertain to his office and (hich are
re!ulated b/ la( and the re!ulations.D E#upreme Court of #pain, Ma/ 4<, 4536G 5< ur. Civ., 8<5, 853.F
That accordin! to para!raph 9 of article 4538 of the Civil Code and the principle laid do(n in a decision, amon!
others, of the 4<th of Ma/, 4536, in a dama!e case, the responsibilit/ of the state is limited to that (hich it
contracts throu!h a special a!ent, dul/ empo(ered b/ a definite order or commission to perform some act or
charged /ith some definite purpose /hich gives rise to the claim, and not (here the claim is based on acts or
omissions imputable to a public official char!ed (ith some administrative or technical office (ho can be held to the
proper responsibilit/ in the manner laid do(n b/ the la( of civil responsibilit/. Conse.uentl/, the trial court in not
so decidin! and in sentencin! the said entit/ to the pa/ment of dama!es, caused b/ an official of the second class
referred to, has b/ erroneous interpretation infrin!ed the provisions of articles 4532 and 4538 of the Civil Code.
E#upreme Court of #pain, ul/ 83, 4544G 422 ur. Civ., 46:.F
-t is, therefore, evidence that the #tate Ethe 7overnment of the Philippine -slandsF is onl/ liable, accordin! to the
above .uoted decisions of the #upreme Court of #pain, for the acts of its a!ents, officers and emplo/ees (hen the/
act as special a!ents (ithin the meanin! of para!raph 9 of article 4538, supra, and that the chauffeur of the
ambulance of the 7eneral %ospital (as not such an a!ent.
&or the fore!oin! reasons, the +ud!ment appealed from must be reversed, (ithout costs in this instance. Bhether
the 7overnment intends to ma'e itself le!all/ liable for the amount of dama!es above set forth, (hich the plaintiff
has sustained b/ reason of the ne!li!ent acts of one of its emplo/ees, b/ le!islative enactment and b/
appropriatin! sufficient funds therefor, (e are not called upon to determine. This matter rests solel/ (ith the
"e!islature and not (ith the courts.
+rellano, C. ., 0orres, ohnson, and %oreland, ., concur.
Republic of the Philippines
SUPREME COURT
Manila
#EC)N$ $-*-#-)N
G.R. No. 1>9?0A Mar/( A, >00A
REPU!LC OF THE PHLPPNES re5re*e%'e& by '(e PRES)ENT#L COMMSSON ON GOO)
GO;ERNMENT 4PCGG6, Petitioner,
vs.
S#N)G#N!#$#N 4SECON) );SON6 a%& RO!ERTO S. !ENE)CTO, Respondents.
$ E C - # - ) N
G#RC#, J.:
Before the Court is this petition for certiorari under Rule :9 of the Rules of Court to nullif/ and set aside the March
2<, 4559
4
and March 48, 455?
2
Resolutions of the #andi!anba/an, #econd $ivision, in Civil Case No. 3386, insofar
as said resolutions ordered the Presidential Commission on 7ood 7overnment EPC77F to pa/ private respondent
Roberto #. Benedicto or his corporations the value of 22? shares of stoc' of the Ne!ros )ccidental 7olf and
Countr/ Club, -nc. EN)7CC-F at P493,333.33 per share, re!istered in the name of said private respondent or his
corporations.
The facts1
Civil Case No. 3386 entitled Republic of the Philippines, plaintiff, v. Roberto #. Benedicto, et al., defendants, is a
complaint for reconve/ance, reversion, accountin!, reconstitution and dama!es. The case is one of several suits
involvin! illA!otten or une0plained (ealth that petitioner Republic, throu!h the PC77, filed (ith the #andi!anba/an
a!ainst private respondent Roberto #. Benedicto and others pursuant to E0ecutive )rder EE)F No. 46,
8
series of
45<:.
Pursuant to its mandate under E) No. 4,
6
series of 45<:, the PC77 issued (rits placin! under se.uestration all
business enterprises, entities and other properties, real and personal, o(ned or re!istered in the name of private
respondent Benedicto, or of corporations in (hich he appeared to have controllin! or ma+orit/ interest. Amon! the
properties thus se.uestered and ta'en over b/ PC77 fiscal a!ents (ere the 22? shares in N)7CC- o(ned b/
private respondent Benedicto and re!istered in his name or under the names of corporations he o(ned or
controlled.
&ollo(in! the se.uestration process, PC77 representatives sat as members of the Board of $irectors of N)7CC-,
(hich passed, sometime in )ctober 45<:, a resolution effectin! a corporate polic/ chan!e. The chan!e consisted of
assessin! a monthl/ membership due of P493.33 for each N)7CC- share. Prior to this resolution, an investor
purchasin! more than one N)7CC- share (as e0empt from pa/in! monthl/ membership due for the second and
subse.uent shares that heLshe o(ned.
#ubse.uentl/, on March 25, 45<?, the N)7CC- Board passed another resolution, this time increasin! the monthl/
membership due from P493.33 to P293.33 for each share.
As se.uestrator of the 22? shares of stoc' in .uestion, PC77 did not pa/ the correspondin! monthl/ membership
due thereon totalin! P2,595,6?4.33. )n account thereof, the 22? se.uestered shares (ere declared delin.uent to
be disposed of in an auction sale.
Apprised of the above development and evidentl/ to prevent the pro+ected auction sale of the same shares, PC77
filed a complaint for in+unction (ith the Re!ional Trial Court ERTCF of Bacolod Cit/, thereat doc'eted as Civil Case
No. 986<. The complaint, ho(ever, (as dismissed, pavin! the (a/ for the auction sale for the delin.uent 22?
shares of stoc'. )n Au!ust 9, 45<5, an auction sale (as conducted.
)n November 8, 4553, petitioner Republic and private respondent Benedicto entered into a Compromise
A!reement in Civil Case No. 3386. The a!reement contained a !eneral release clause
9
(hereunder petitioner
Republic a!reed and bound itself to lift the se.uestration on the 22? N)7CC- shares, amon! other BenedictoMs
properties, petitioner Republic ac'no(led!in! that it (as (ithin private respondent BenedictoMs capacit/ to ac.uire
the same shares out of his income from business and the e0ercise of his profession.
:
-mplied in this underta'in! is
the reco!nition b/ petitioner Republic that the sub+ect shares of stoc' could not have been illA!otten.
-n a decision dated )ctober 2, 4552, the #andi!anba/an approved the Compromise A!reement and accordin!l/
rendered +ud!ment in accordance (ith its terms.
-n the process of implementin! the Compromise A!reement, either of the parties (ould, from time to time, move
for a rulin! b/ the #andi!anba/an on the proper manner of implementin! or interpretin! a specific provision
therein.
)n &ebruar/ 22, 4556, Benedicto filed in Civil Case No. 3386 a DMotion for Release from #e.uestration and Return
of #e.uestered #haresL$ividendsD pra/in!, inter alia, that his N)7CC- shares of stoc' be specificall/ released from
se.uestration and returned, delivered or paid to him as part of the partiesM Compromise A!reement in that case. -n
a Resolution
?
promul!ated on $ecember :, 4556, the #andi!anba/an !ranted BenedictoMs aforementioned motion
but placed the sub+ect shares under the custod/ of its Cler' of Court, thus1
B%ERE&)RE, in the li!ht of the fore!oin!, the said DMotion for Release &rom #e.uestration and Return of
#e.uestered #haresL$ividendsD is hereb/ 7RANTE$ and it is directed that said sharesLdividends be
deliveredLplaced under the custod/ of the Cler' of Court, #andi!anba/an, Manila sub+ect to this CourtMs disposition.
)n March 2<, 4559, the #andi!anba/an came out (ith the herein first assailed Resolution,
<
(hich clarified its
aforementioned $ecember :, 4556 Resolution and directed the immediate implementation thereof b/ re.uirin!
PC77, amon! other thin!s1
EbF To deliver to the Cler' of Court the 22? se.uestered shares of NN)7CC-O re!istered in the name of nominees of
R)BERT) #. BENE$-CT) free from all liens and encumbrances, or in default thereof, to pa/ their value at
P493,333.33 per share (hich can be deducted from Nthe RepublicMsO cash share in the Compromise A!reement.
NBords in brac'et addedO EEmphasis #uppliedF.
)(in! to PC77Ms failure to compl/ (ith the above directive, Benedicto filed in Civil Case No. 3386 a Motion for
Compliance dated ul/ 29, 4559, follo(ed b/ an E0AParte Motion for Earl/ Resolution dated &ebruar/ 42, 455:.
Actin! thereon, the #andi!anba/an promul!ated /et another Resolution
5
on &ebruar/ 28, 455:, dispositivel/
readin!1
B%ERE&)RE, findin! merit in the instant motion for earl/ resolution and considerin! that, indeed, the PC77 has
not sho(n an/ +ustifiable !round as to (h/ it has not complied (ith its obli!ation as set forth in the )rder of
$ecember :, 4556 up to this date and (hich )rder (as issued pursuant to the Compromise A!reement and has
alread/ become final and e0ecutor/, accordin!l/, the Presidential Commission on 7ood 7overnment is hereb/ !iven
a final e0tension of fifteen E49F da/s from receipt hereof (ithin (hich to compl/ (ith the )rder of $ecember :,
4556 as stated hereinabove.
)n April 4, 455:, PC77 filed a Manifestation (ith Motion for Reconsideration,
43
pra/in! for the settin! aside of the
Resolution of &ebruar/ 28, 455:. )n April 44, 455:, private respondent Benedicto filed a Motion to Enforce
ud!ment "ev/. Resolvin! these t(o motions, the #andi!anba/an, in its second assailed Resolution
44
dated March
48, 455?, denied that portion of the PC77Ms Manifestation (ith Motion for Reconsideration concernin! the sub+ect
22? N)7CC- shares and !ranted BenedictoMs Motion to Enforce ud!ment "ev/.
%ence, the RepublicMs present recourse on the sole issue of (hether or not the public respondent #andi!anba/an,
#econd $ivision, !ravel/ abused its discretion in holdin! that the PC77 is at fault for not pa/in! the membership
dues on the 22? se.uestered N)7CC- shares of stoc', a failin! (hich eventuall/ led to the foreclosure sale thereof.
The petition lac's merit.
To be!in (ith, PC77 itself does not dispute its bein! considered as a receiver insofar as the se.uestered 22?
N)7CC- shares of stoc' are concerned.
42
PC77 also ac'no(led!es that as such receiver, one of its functions is to
pa/ outstandin! debts pertainin! to the se.uestered entit/ or propert/,
48
in this case the 22? N)7CC- shares in
.uestion. -t contends, ho(ever, that membership dues o(in! to a !olf club cannot be considered as an outstandin!
debt for (hich PC77, as receiver, must pa/. -t also claims to have e0ercised due dili!ence to prevent the loss
throu!h delin.uenc/ sale of the sub+ect N)7CC- shares, specificall/ invitin! attention to the in+unctive suit, i.e.,
Civil Case No. 986<, it filed before the RTC of Bacolod Cit/ to en+oin the foreclosure sale of the shares.
The filin! of the in+unction complaint adverted to, (ithout more, cannot plausibl/ tilt the balance in favor of PC77.
To the mind of the Court, such filin! is a case of actin! too little and too late. -t cannot be overAemphasized that it
behooved the PC77Ms fiscal a!ents to preserve, li'e a responsible father of the famil/, the value of the shares of
stoc' under their administration. But far from actin! as such father, (hat the fiscal a!ents did under the premises
(as to allo( the element of delin.uenc/ to set in before actin! b/ embar'in! on a tedious process of !oin! to court
after the auction sale had been announced and scheduled.
The PC77Ms posture that to the o(ner of the se.uestered shares rests the burden of pa/in! the membership dues
is untenable. &or one, it lost si!ht of the realit/ that such dues are basicall/ obli!ations attached to the shares,
(hich, in the final anal/sis, shall be made liable, thru delin.uenc/ sale in case of default in pa/ment of the dues.
&or another, the PC77 as se.uestratorAreceiver of such shares is, as stressed earlier, dut/ bound to preserve the
value of such shares. Needless to state, adoptin! timel/ measures to obviate the loss of those shares forms part of
such dut/ and due dili!ence.
The #andi!anba/an, to be sure, cannot plausibl/ be faulted for findin! the PC77 liable for the loss of the 22?
N)7CC- shares. There can be no .uibblin!, as indeed the !raft court so declared in its assailed and related
resolutions respectin! the N)7CC- shares of stoc', that PC77Ms fiscal a!ents, (hile sittin! in the N)7CC- Board of
$irectors a!reed to the amendment of the rule pertainin! to membership dues. %ence, it is not amiss to state, as
did the #andi!anba/an, that the PC77Adesi!nated fiscal a!ents, no less, had a direct hand in the loss of the
se.uestered shares throu!h delin.uenc/ and their eventual sale throu!h public auction. Bhile perhaps antiA
climactic to so mention it at this sta!e, the unfortunate loss of the shares ou!ht not to have come to pass had
those fiscal a!ents prudentl/ not a!reed to the passa!e of the N)7CC- board resolutions char!in! membership
dues on shares (ithout pla/in! representatives.
7iven the circumstances leadin! to the auction sale of the sub+ect N)7CC- shares, PC77Ms lament about public
respondent #andi!anba/an havin! erred or, (orse still, havin! !ravel/ abused its discretion in its determination as
to (ho is at fault for the loss of the shares in .uestion can hardl/ be !iven co!enc/.
&or sure, even if the #andi!anba/an (ere (ron! in its findin!s, (hich does not seem to be in this case, it is a (ellA
settled rule of +urisprudence that certiorari (ill issue onl/ to correct errors of +urisdiction, not errors of +ud!ment.
Corollaril/, errors of procedure or mista'es in the courtMs findin!s and conclusions are be/ond the corrective hand
of certiorari.
46
The e0traordinar/ (rit of certiorari ma/ be availed onl/ upon a sho(in!, in the minimum, that the
respondent tribunal or officer e0ercisin! +udicial or .uasiA+udicial functions has acted (ithout or in e0cess of its or
his +urisdiction, or (ith !rave abuse of discretion.
49
The term D!rave abuse of discretionD connotes capricious and (himsical e0ercise of +ud!ment as is e.uivalent to
e0cess, or a lac' of +urisdiction.
4:
The abuse must be so patent and !ross as to amount to an evasion of a positive
dut/ or a virtual refusal to perform a dut/ en+oined b/ la(, or to act at all in contemplation of la( as (here the
po(er is e0ercised in an arbitrar/ and despotic manner b/ reason of passion or hostilit/.
4?
#adl/, this is completel/
absent in the present case. &or, at bottom, the assailed resolutions of the #andi!anba/an did no more than to
direct PC77 to compl/ (ith its part of the bar!ain under the compromise a!reement it freel/ entered into (ith
private respondent Benedicto. #impl/ put, the assailed resolutions of the #andi!anba/an have firm basis in fact
and in la(.
"est it be overloo'ed, the issue of liabilit/ for the shares in .uestion had, as both public and private respondents
asserted, lon! become final and e0ecutor/. PetitionerMs narration of facts in its present petition is even misleadin!
as it convenientl/ fails to ma'e reference to t(o E2F resolutions issued b/ the #andi!anba/an. Be refer to that
courtMs resolutions of $ecember :, 4556
4<
and &ebruar/ 28, 455:
45
as (ell as several intervenin! pleadin!s (hich
served as basis for the decisions reached therein. As it (ere, the present petition .uestions onl/ and focuses on the
March 2<, 4559
23
and March 48, 455?
24
resolutions, (hich merel/ reiterated and clarified the !raft courtMs
underl/in! resolution of $ecember :, 4556. And to place matters in the proper perspective, PC77Ms failure to
compl/ (ith the $ecember :, 4556 resolution prompted the issuance of the clarificator/ andLor reiterator/
resolutions aforementioned.
-n a lastAditch attempt to escape liabilit/, petitioner Republic, throu!h the PC77, invo'es state immunit/ from
suit.
22
As ar!ued, the order for it to pa/ the value of the delin.uent shares (ould fi0 monetar/ liabilit/ on a
!overnment a!enc/, thus necessitatin! the appropriation of public funds to satisf/ the +ud!ment claim.
28
But, as
private respondent Benedicto correctl/ countered, the PC77 fails to ta'e stoc' of one of the e0ceptions to the state
immunit/ principle, i.e., (hen the !overnment itself is the suitor, as in Civil Case No. 3386. Bhere, as here, the
#tate itself is no less the plaintiff in the main case, immunit/ from suit cannot be effectivel/ invo'ed.
26
&or, as
+urisprudence teaches, (hen the #tate, throu!h its dul/ authorized officers, ta'es the initiative in a suit a!ainst a
private part/, it thereb/ descends to the level of a private individual and thus opens itself to (hatever
counterclaims or defenses the latter ma/ have a!ainst it.
29
Petitioner RepublicMs act of filin! its complaint in Civil
Case No. 3386 constitutes a (aiver of its immunit/ from suit. Bein! itself the plaintiff in that case, petitioner
Republic cannot set up its immunit/ a!ainst private respondent BenedictoMs pra/ers in the same case.
-n fact, b/ enterin! into a Compromise A!reement (ith private respondent Benedicto, petitioner Republic thereb/
stripped itself of its immunit/ from suit and placed itself in the same level of its adversar/. Bhen the #tate enters
into contract, throu!h its officers or a!ents, in furtherance of a le!itimate aim and purpose and pursuant to
constitutional le!islative authorit/, (hereb/ mutual or reciprocal benefits accrue and ri!hts and obli!ations arise
therefrom, the #tate ma/ be sued even (ithout its e0press consent, precisel/ because b/ enterin! into a contract
the soverei!n descends to the level of the citizen. -ts consent to be sued is implied from the ver/ act of enterin!
into such contract,
2:
breach of (hich on its part !ives the correspondin! ri!ht to the other part/ to the a!reement.
&inall/, it is apropos to stress that the Compromise A!reement in Civil Case No. 3386 envisa!ed the immediate
recover/ of alle!ed illA!otten (ealth (ithout further liti!ation b/ the !overnment, and bu/in! peace on the part of
the a!in! Benedicto.
2?
#adl/, that stated ob+ective has come to nau!ht as not onl/ had the liti!ation continued to
ensue, but, (orse, private respondent Benedicto passed a(a/ on Ma/ 49, 2333,
2<
(ith the trial of Civil Case No.
3386 still in s(in!, so much so that the late Benedicto had to be substituted b/ the administratri0 of his estate.
25
B%ERE&)RE, the instant petition is hereb/ $-#M-##E$.
#) )R$ERE$.
C#NCO C. G#RC#
Associate ustice
BE C)NCCR1
RE$N#TO S. PUNO
Associate ustice
Chairperson
#NGELN# S#N)O;#L-GUTERREC
Associate ustice
REN#TO C. CORON#
Asscociate ustice
#)OLFO S. #CCUN#
Associate ustice
A T T E # T A T - ) N
- attest that the conclusions in the above decision (ere reached in consultation before the case (as assi!ned to the
(riter of the opinion of the CourtMs $ivision.
RE$N#TO S .PUNO
Associate ustice
Chairperson, #econd $ivision
C E R T - & - C A T - ) N
Pursuant to Article *---, #ection 48 of the Constitution, and the $ivision Chairman;s Attestation, it is hereb/
certified that the conclusions in the above decision (ere reached in consultation before the case (as assi!ned to
the (riter of the opinion of the Court.
#RTEMO ;. P#NG#N!#N
Chief ustice
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 7AA07 February >A, 1990
UNTE) ST#TES OF #MERC#, FRE)ERC= M. SMOUSE #N) $;ONNE REE;ES, petitioners,
vs.
HON. ELO)ORO !. GUNTO, Pre*+&+%, -u&,e, !ra%/( L;, Re,+o%a1 Tr+a1 Cour', #%,e1e* C+'y,
RO!ERTO T. ;#LENC#, EMERENC#N# C. T#NGL#O, #N) P#!LO C. )EL PL#R, respondents.
G.R. No. 79?70 February >A, 1990
UNTE) ST#TES OF #MERC#, #NTHON$ L#M#CH#, TDSGT. US#F, "LFRE)O !ELS#, PETER
OR#SCON #N) ROSE C#RT#LL#, petitioners,
E*.
HON. RO)OLFO ). RO)RGO, a* Pre*+&+%, -u&,e o. !ra%/( 7, Re,+o%a1 Tr+a1 Cour' 4!#GUO
CT$6, La Tr+%+&a&, !e%,ue' a%& F#!#N GENO;E, re*5o%&e%'*.
G.R. No. 80018 February >A, 1990
UNTE) ST#TES OF #MERC#, TOM -. =NG, )#RREL ). )$E a%& STE;EN F. !OSTC=, petitioners,
E*.
HON. -OSEFN# ). CE!#LLOS, #* Pre*+&+%, -u&,e, Re,+o%a1 Tr+a1 Cour', !ra%/( AA, Ca5a*, Tar1a/,
a%& LUS !#UTST#, re*5o%&e%'*.
G.R. No. 80>@8 February >A, 1990
UNTE) ST#TES OF #MERC#, M#-OR GENER#L MCH#EL P. C. C#RNS, #C ERNEST E.
R;EN!URGH, #C RO!N !LE;NS, SGT. NOEL #. GONC#LES, SGT. THOM#S MTCHELL, SGT.
"#$NE L. !EN-#MN, ET #L.,petitioners,
vs.
HON. CONCEPCON S. #L#RCON ;ERG#R#, a* Pre*+&+%, -u&,e, !ra%/( A> REGON#L TR#L
COURT, #%,e1e* C+'y, a%& RC=$ S#NCHEC, FRE))E S#NCHEC #=# FRE))E R;ER#, E)"N
M#R#NO, #=# -ESSE )OLORES S#NG#L#NG, ET #L., respondents.
"una, Sison 1 %anas "a/ Office for petitioners.

CRUC, J.:
These cases have been consolidated because the/ all involve the doctrine of state immunit/. The Cnited
#tates of America (as not impleaded in the complaints belo( but has moved to dismiss on the !round that
the/ are in effect suits a!ainst it to (hich it has not consented. -t is no( contestin! the denial of its motions
b/ the respondent +ud!es.
-n 7.R. No. ?::3?, the private respondents are suin! several officers of the C.#. Air &orce stationed in Clar'
Air Base in connection (ith the biddin! conducted b/ them for contracts for barber services in the said base.
)n &ebruar/ 26, 45<:, the Bestern Pacific Contractin! )ffice, )'ina(a Area E0chan!e, C.#. Air &orce,
solicited bids for such contracts throu!h its contractin! officer, ames &. #ha(. Amon! those (ho submitted
their bids (ere private respondents Roberto T. *alencia, Emerenciana C. Tan!lao, and Pablo C. del Pilar.
*alencia had been a concessionaire inside Clar' for 86 /earsG del Pilar for 42 /earsG and Tan!lao for 93
/ears.
The biddin! (as (on b/ Ramon $izon, over the ob+ection of the private respondents, (ho claimed that he
had made a bid for four facilities, includin! the Civil En!ineerin! Area, (hich (as not included in the
invitation to bid.
The private respondents complained to the Philippine Area E0chan!e EP%A>F. The latter, throu!h its
representatives, petitioners Ivonne Reeves and &rederic M. #mouse e0plained that the Civil En!ineerin!
concession had not been a(arded to $izon as a result of the &ebruar/ 26, 45<: solicitation. $izon (as
alread/ operatin! this concession, then 'no(n as the NC) club concession, and the e0piration of the
contract had been e0tended from une 83, 45<: to Au!ust 84, 45<:. The/ further e0plained that the
solicitation of the CE barbershop (ould be available onl/ b/ the end of une and the private respondents
(ould be notified.
)n une 83, 45<:, the private respondents filed a complaint in the court belo( to compel P%A> and the
individual petitioners to cancel the a(ard to defendant $izon, to conduct a rebiddin! for the barbershop
concessions and to allo( the private respondents b/ a (rit of preliminar/ in+unction to continue operatin!
the concessions pendin! liti!ation.
1
Cpon the filin! of the complaint, the respondent court issued an ex parte order directin! the individual
petitioners to maintain the status 2uo.
)n ul/ 22, 45<:, the petitioners filed a motion to dismiss and opposition to the petition for preliminar/
in+unction on the !round that the action (as in effect a suit a!ainst the Cnited #tates of America, (hich had
not (aived its nonAsuabilit/. The individual defendants, as official emplo/ees of the C.#. Air &orce, (ere also
immune from suit.
)n the same date, ul/ 22, 45<:, the trial court denied the application for a (rit of preliminar/ in+unction.
)n )ctober 43, 45<<, the trial court denied the petitioners; motion to dismiss, holdin! in part as follo(s1
&rom the pleadin!s thus far presented to this Court b/ the parties, the Court;s attention is called b/ the
relationship bet(een the plaintiffs as (ell as the defendants, includin! the C# 7overnment, in that prior to
the biddin! or solicitation in .uestion, there (as a bindin! contract bet(een the plaintiffs as (ell as the
defendants, includin! the C# 7overnment. B/ virtue of said contract of concession it is the Court;s
understandin! that neither the C# 7overnment nor the herein principal defendants (ould become the
emplo/erLs of the plaintiffs but that the latter are the emplo/ers themselves of the barbers, etc. (ith the
emplo/er, the plaintiffs herein, remittin! the stipulated percenta!e of commissions to the Philippine Area
E0chan!e. The same circumstance (ould become in effect (hen the Philippine Area E0chan!e opened for
biddin! or solicitation the .uestioned barber shop concessions. To this e0tent, therefore, indeed a
commercial transaction has been entered, and for purposes of the said solicitation, (ould necessaril/ be
entered bet(een the plaintiffs as (ell as the defendants.
The Court, further, is of the vie( that Article >*--- of the RPAC# Bases A!reement does not cover such 'ind
of services fallin! under the concessionaireship, such as a barber shop concession.
>
)n $ecember 44, 45<:, follo(in! the filin! of the herein petition for certiorari and prohibition (ith
preliminar/ in+unction, (e issued a temporar/ restrainin! order a!ainst further proceedin!s in the court
belo(.
3
-n 7.R. No. ?56?3, &abian 7enove filed a complaint for dama!es a!ainst petitioners Anthon/ "amachia,
Bilfredo Belsa, Rose Cartalla and Peter )rascion for his dismissal as coo' in the C.#. Air &orce Recreation
Center at the ohn %a/ Air #tation in Ba!uio Cit/. -t had been ascertained after investi!ation, from the
testimon/ of Belsa Cartalla and )rascion, that 7enove had poured urine into the soup stoc' used in coo'in!
the ve!etables served to the club customers. "amachia, as club mana!er, suspended him and thereafter
referred the case to a board of arbitrators conformabl/ to the collective bar!ainin! a!reement bet(een the
Center and its emplo/ees. The board unanimousl/ found him !uilt/ and recommended his dismissal. This
(as effected on March 9, 45<:, b/ Col. $avid C. Kimball, Commander of the 8rd Combat #upport 7roup,
PACA& Clar' Air &orce Base. 7enove;s reaction (as to file Ms complaint in the Re!ional Trial Court of Ba!uio
Cit/ a!ainst the individual petitioners.
?
)n March 48, 45<?, the defendants, +oined b/ the Cnited #tates of America, moved to dismiss the
complaint, alle!in! that "amachia, as an officer of the C.#. Air &orce stationed at ohn %a/ Air #tation, (as
immune from suit for the acts done b/ him in his official capacit/. The/ ar!ued that the suit (as in effect
a!ainst the Cnited #tates, (hich had not !iven its consent to be sued.
This motion (as denied b/ the respondent +ud!e on une 6, 45<?, in an order (hich read in part1
-t is the understandin! of the Court, based on the alle!ations of the complaint H (hich have been
h/potheticall/ admitted b/ defendants upon the filin! of their motion to dismiss H that althou!h defendants
acted initiall/ in their official capacities, their !oin! be/ond (hat their functions called for brou!ht them out
of the protective mantle of (hatever immunities the/ ma/ have had in the be!innin!. Thus, the alle!ation
that the acts complained of (ere ille!al, done. (ith e0treme bad faith and (ith preAconceived sinister plan to
harass and finall/ dismiss the plaintiff, !ains si!nificance.
@
The petitioners then came to this Court see'in! certiorari and prohibition (ith preliminar/ in+unction.
-n 7.R. No. <334<, "uis Bautista, (ho (as emplo/ed as a barrac's bo/ in Camp ); $onnell, an e0tension of
Clar' Air Base, (as arrested follo(in! a bu/Abust operation conducted b/ the individual petitioners herein,
namel/, Tomi . Kin!, $arrel $. $/e and #tephen &. Bostic', officers of the C.#. Air &orce and special a!ents
of the Air &orce )ffice of #pecial -nvesti!ators EA&)#-F. )n the basis of the s(orn statements made b/ them,
an information for violation of R.A. :629, other(ise 'no(n as the $an!erous $ru!s Act, (as filed a!ainst
Bautista in the Re!ional Trial Court of Tarlac. The aboveAnamed officers testified a!ainst him at his trial. As a
result of the filin! of the char!e, Bautista (as dismissed from his emplo/ment. %e then filed a complaint for
dama!es a!ainst the individual petitioners herein claimin! that it (as because of their acts that he (as
removed.
A
$urin! the period for filin! of the ans(er, Mariano I. Navarro a special counsel assi!ned to the -nternational
"a( $ivision, )ffice of the #taff ud!e Advocate of Clar' Air Base, entered a special appearance for the
defendants and moved for an e0tension (ithin (hich to file an Dans(er andLor other pleadin!s.D %is reason
(as that the Attorne/ 7eneral of the Cnited #tates had not /et desi!nated counsel to represent the
defendants, (ho (ere bein! sued for their official acts. Bithin the e0tended period, the defendants, (ithout
the assistance of counsel or authorit/ from the C.#. $epartment of ustice, filed their ans(er. The/ alle!ed
therein as affirmative defenses that the/ had onl/ done their dut/ in the enforcement of the la(s of the
Philippines inside the American bases pursuant to the RPAC# Militar/ Bases A!reement.
)n Ma/ ?, 45<?, the la( firm of "una, #ison and Manas, havin! been retained to represent the defendants,
filed (ith leave of court a motion to (ithdra( the ans(er and dismiss the complaint. The !round invo'ed
(as that the defendants (ere actin! in their official capacit/ (hen the/ did the acts complained of and that
the complaint a!ainst them (as in effect a suit a!ainst the Cnited #tates (ithout its consent.
The motion (as denied b/ the respondent +ud!e in his order dated #eptember 44, 45<?, (hich held that the
claimed immunit/ under the Militar/ Bases A!reement covered onl/ criminal and not civil cases. Moreover,
the defendants had come under the +urisdiction of the court (hen the/ submitted their ans(er.
7
&ollo(in! the filin! of the herein petition for certiorari and prohibition (ith preliminar/ in+unction, (e issued
on )ctober 46, 45<?, a temporar/ restrainin! order.
8
-n 7.R. No. <329<, a complaint for dama!es (as filed b/ the private respondents a!ainst the herein
petitioners Ee0cept the Cnited #tates of AmericaF, for in+uries alle!edl/ sustained b/ the plaintiffs as a result
of the acts of the defendants.
9
There is a conflict of factual alle!ations here. Accordin! to the plaintiffs, the
defendants beat them up, handcuffed them and unleashed do!s on them (hich bit them in several parts of
their bodies and caused e0tensive in+uries to them. The defendants den/ this and claim the plaintiffs (ere
arrested for theft and (ere bitten b/ the do!s because the/ (ere stru!!lin! and resistin! arrest, The
defendants stress that the do!s (ere called off and the plaintiffs (ere immediatel/ ta'en to the medical
center for treatment of their (ounds.
-n a motion to dismiss the complaint, the Cnited #tates of America and the individuall/ named defendants
ar!ued that the suit (as in effect a suit a!ainst the Cnited #tates, (hich had not !iven its consent to be
sued. The defendants (ere also immune from suit under the RPAC# Bases Treat/ for acts done b/ them in
the performance of their official functions.
The motion to dismiss (as denied b/ the trial court in its order dated Au!ust 43, 45<?, readin! in part as
follo(s1
The defendants certainl/ cannot correctl/ ar!ue that the/ are immune from suit. The alle!ations, of the
complaint (hich is sou!ht to be dismissed, had to be h/potheticall/ admitted and (hatever !round the
defendants ma/ have, had to be ventilated durin! the trial of the case on the merits. The complaint alle!ed
criminal acts a!ainst the individuall/Anamed defendants and from the nature of said acts it could not be said
that the/ are Acts of #tate, for (hich immunit/ should be invo'ed. -f the &ilipinos themselves are dut/ bound
to respect, obe/ and submit themselves to the la(s of the countr/, (ith more reason, the members of the
Cnited #tates Armed &orces (ho are bein! treated as !uests of this countr/ should respect, obe/ and submit
themselves to its la(s.
10
and so (as the motion for reconsideration. The defendants submitted their ans(er as re.uired but
subse.uentl/ filed their petition for certiorari and prohibition (ith preliminar/ in+unction (ith this Court. Be
issued a temporar/ restrainin! order on )ctober 2?, 45<?.
11
--
The rule that a state ma/ not be sued (ithout its consent, no( e0pressed in Article >*-, #ection 8, of the
45<? Constitution, is one of the !enerall/ accepted principles of international la( that (e have adopted as
part of the la( of our land under Article --, #ection 2. This latter provision merel/ reiterates a polic/ earlier
embodied in the 4589 and 45?8 Constitutions and also intended to manifest our resolve to abide b/ the rules
of the international communit/.
Even (ithout such affirmation, (e (ould still be bound b/ the !enerall/ accepted principles of international
la( under the doctrine of incorporation. Cnder this doctrine, as accepted b/ the ma+orit/ of states, such
principles are deemed incorporated in the la( of ever/ civilized state as a condition and conse.uence of its
membership in the societ/ of nations. Cpon its admission to such societ/, the state is automaticall/ obli!ated
to compl/ (ith these principles in its relations (ith other states.
As applied to the local state, the doctrine of state immunit/ is based on the +ustification !iven b/ ustice
%olmes that Dthere can be no le!al ri!ht a!ainst the authorit/ (hich ma'es the la( on (hich the ri!ht
depends.D
1>
There are other practical reasons for the enforcement of the doctrine. -n the case of the forei!n
state sou!ht to be impleaded in the local +urisdiction, the added inhibition is e0pressed in the ma0im par in
parem, non habet imperium. All states are soverei!n e.uals and cannot assert +urisdiction over one another.
A contrar/ disposition (ould, in the lan!ua!e of a celebrated case, Dundul/ ve0 the peace of nations.D
13
Bhile the doctrine appears to prohibit onl/ suits a!ainst the state (ithout its consent, it is also applicable to
complaints filed a!ainst officials of the state for acts alle!edl/ performed b/ them in the dischar!e of their
duties. The rule is that if the +ud!ment a!ainst such officials (ill re.uire the state itself to perform an
affirmative act to satisf/ the same, such as the appropriation of the amount needed to pa/ the dama!es
a(arded a!ainst them, the suit must be re!arded as a!ainst the state itself althou!h it has not been
formall/ impleaded.
1?
-n such a situation, the state ma/ move to dismiss the complaint on the !round that it
has been filed (ithout its consent.
The doctrine is sometimes derisivel/ called Dthe ro/al prero!ative of dishonest/D because of the privile!e it
!rants the state to defeat an/ le!itimate claim a!ainst it b/ simpl/ invo'in! its nonAsuabilit/. That is hardl/
fair, at least in democratic societies, for the state is not an unfeelin! t/rant unmoved b/ the valid claims of
its citizens. -n fact, the doctrine is not absolute and does not sa/ the state ma/ not be sued under an/
circumstance. )n the contrar/, the rule sa/s that the state ma/ not be sued (ithout its consent, (hich
clearl/ imports that it ma/ be sued if it consents.
The consent of the state to be sued ma/ be manifested e0pressl/ or impliedl/. E0press consent ma/ be
embodied in a !eneral la( or a special la(. Consent is implied (hen the state enters into a contract or it
itself commences liti!ation.
The !eneral la( (aivin! the immunit/ of the state from suit is found in Act No. 83<8, under (hich the
Philippine !overnment Dconsents and submits to be sued upon an/ mone/ed claim involvin! liabilit/ arisin!
from contract, e0press or implied, (hich could serve as a basis of civil action bet(een private parties.D -n
%erritt v. Government of the Philippine 3slands,
1@
a special la( (as passed to enable a person to sue the
!overnment for an alle!ed tort. Bhen the !overnment enters into a contract, it is deemed to have
descended to the level of the other contractin! part/ and divested of its soverei!n immunit/ from suit (ith
its implied consent.
1A
Baiver is also implied (hen the !overnment files a complaint, thus openin! itself to a
counterclaim.
17
The above rules are sub+ect to .ualification. E0press consent is effected onl/ b/ the (ill of the le!islature
throu!h the medium of a dul/ enacted statute.
18
Be have held that not all contracts entered into b/ the
!overnment (ill operate as a (aiver of its nonAsuabilit/G distinction must be made bet(een its soverei!n and
proprietar/ acts.
19
As for the filin! of a complaint b/ the !overnment, suabilit/ (ill result onl/ (here the
!overnment is claimin! affirmative relief from the defendant.
>0
-n the case of the Cnited #tates of America, the customar/ rule of international la( on state immunit/ is
e0pressed (ith more specificit/ in the RPAC# Bases Treat/. Article --- thereof provides as follo(s1
-t is mutuall/ a!reed that the Cnited #tates shall have the ri!hts, po(er and authorit/ (ithin the bases
(hich are necessar/ for the establishment, use, operation and defense thereof or appropriate for the control
thereof and all the ri!hts, po(er and authorit/ (ithin the limits of the territorial (aters and air space
ad+acent to, or in the vicinit/ of, the bases (hich are necessar/ to provide access to them or appropriate for
their control.
The petitioners also rel/ heavil/ on Baer v. 0i$on,
>1
alon! (ith several other decisions, to support their
position that the/ are not suable in the cases belo(, the Cnited #tates not havin! (aived its soverei!n
immunit/ from suit. -t is emphasized that in Baer, the Court held1
The invocation of the doctrine of immunit/ from suit of a forei!n state (ithout its consent is appropriate.
More specificall/, insofar as alien armed forces is concerned, the startin! point is Ra2ui$a v. Bradford, a 4569
decision. -n dismissin! a habeas corpus petition for the release of petitioners confined b/ American arm/
authorities, ustice %ilado spea'in! for the Court, cited Coleman v. 0ennessee, (here it (as e0plicitl/
declared1 ;-t is (ell settled that a forei!n arm/, permitted to march throu!h a friendl/ countr/ or to be
stationed in it, b/ permission of its !overnment or soverei!n, is e0empt from the civil and criminal
+urisdiction of the place.; T(o /ears later, in Tubb and Tedro( v. 7riess, this Court relied on the rulin! in
Ra.uiza v. Bradford and cited in support thereof e0cerpts from the (or's of the follo(in! authoritative
(riters1 *attel, Bheaton, %all, "a(rence, )ppenheim, Bestla'e, %/de, and McNair and "auterpacht.
Accurac/ demands the clarification that after the conclusion of the PhilippineAAmerican Militar/ Bases
A!reement, the treat/ provisions should control on such matter, the assumption bein! that there (as a
manifestation of the submission to +urisdiction on the part of the forei!n po(er (henever appropriate. More
to the point is S!2uia v. +lmeda "ope$, (here plaintiffs as lessors sued the Commandin! 7eneral of the
Cnited #tates Arm/ in the Philippines, see'in! the restoration to them of the apartment buildin!s the/
o(ned leased to the Cnited #tates armed forces stationed in the Manila area. A motion to dismiss on the
!round of nonAsuabilit/ (as filed and upheld b/ respondent ud!e. The matter (as ta'en to this Court in a
mandamus proceedin!. -t failed. -t (as the rulin! that respondent ud!e acted correctl/ considerin! that the
6 action must be considered as one a!ainst the C.#. 7overnment. The opinion of ustice Montema/or
continued1 ;-t is clear that the courts of the Philippines includin! the Municipal Court of Manila have no
+urisdiction over the present case for unla(ful detainer. The .uestion of lac' of +urisdiction (as raised and
interposed at the ver/ be!innin! of the action. The C.#. 7overnment has not !iven its consent to the filin! of
this suit (hich is essentiall/ a!ainst her, thou!h not in name. Moreover, this is not onl/ a case of a citizen
filin! a suit a!ainst his o(n 7overnment (ithout the latter;s consent but it is of a citizen firin! an action
a!ainst a forei!n !overnment (ithout said !overnment;s consent, (hich renders more obvious the lac' of
+urisdiction of the courts of his countr/. The principles of la( behind this rule are so elementar/ and of such
!eneral acceptance that (e deem it unnecessar/ to cite authorities in support thereof then came %arvel
Building Corporation v. Philippine 4ar #amage Commission, (here respondent, a Cnited #tates A!enc/
established to compensate dama!es suffered b/ the Philippines durin! Borld Bar -- (as held as fallin!
(ithin the above doctrine as the suit a!ainst it (ould eventuall/ be a char!e a!ainst or financial liabilit/ of
the Cnited #tates 7overnment because ... , the Commission has no funds of its o(n for the purpose of
pa/in! mone/ +ud!ments.; The #/.uia rulin! (as a!ain e0plicitl/ relied upon in %ar2ue$ "im v. 5elson,
involvin! a complaint for the recover/ of a motor launch, plus dama!es, the special defense interposed bein!
;that the vessel belon!ed to the Cnited #tates 7overnment, that the defendants merel/ acted as a!ents of
said 7overnment, and that the Cnited #tates 7overnment is therefore the real part/ in interest.; #o it (as in
Philippine +lien Propert! +dministration v. Castelo, (here it (as held that a suit a!ainst Alien Propert/
Custodian and the Attorne/ 7eneral of the Cnited #tates involvin! vested propert/ under the Tradin! (ith
the Enem/ Act is in substance a suit a!ainst the Cnited #tates. To the same effect is Parreno v. %cGraner!,
as the follo(in! e0cerpt from the opinion of +ustice Tuazon clearl/ sho(s1 ;-t is a (idel/ accepted principle of
international la(, (hich is made a part of the la( of the land EArticle --, #ection 8 of the ConstitutionF, that a
forei!n state ma/ not be brou!ht to suit before the courts of another state or its o(n courts (ithout its
consent.; &inall/, there is ohnson v. 0urner, an appeal b/ the defendant, then Commandin! 7eneral,
Philippine Command EAir &orce, (ith office at Clar' &ieldF from a decision orderin! the return to plaintiff of
the confiscated militar/ pa/ment certificates 'no(n as scrip mone/. -n reversin! the lo(er court decision,
this Tribunal, throu!h ustice Montema/or, relied on S!2uia v. +lmeda "ope$, e0plainin! (h/ it could not be
sustained.
-t bears stressin! at this point that the above observations do not confer on the Cnited #tates of America a
blan'et immunit/ for all acts done b/ it or its a!ents in the Philippines. Neither ma/ the other petitioners
claim that the/ are also insulated from suit in this countr/ merel/ because the/ have acted as a!ents of the
Cnited #tates in the dischar!e of their official functions.
There is no .uestion that the Cnited #tates of America, li'e an/ other state, (ill be deemed to have impliedl/
(aived its nonAsuabilit/ if it has entered into a contract in its proprietar/ or private capacit/. -t is onl/ (hen
the contract involves its soverei!n or !overnmental capacit/ that no such (aiver ma/ be implied. This (as
our rulin! in -nited States of +merica v. Rui$,
>>
(here the transaction in .uestion dealt (ith the
improvement of the (harves in the naval installation at #ubic Ba/. As this (as a clearl/ !overnmental
function, (e held that the contract did not operate to divest the Cnited #tates of its soverei!n immunit/ from
suit. -n the (ords of ustice *icente Abad #antos1
The traditional rule of immunit/ e0empts a #tate from bein! sued in the courts of another #tate (ithout its
consent or (aiver. This rule is a necessar/ conse.uence of the principles of independence and e.ualit/ of
#tates. %o(ever, the rules of -nternational "a( are not petrifiedG the/ are constantl/ developin! and
evolvin!. And because the activities of states have multiplied, it has been necessar/ to distin!uish them H
bet(een soverei!n and !overnmental acts E+ure imperiiF and private, commercial and proprietar/ acts E+ure
!estionisF. The result is that #tate immunit/ no( e0tends onl/ to acts +ure imperii The restrictive application
of #tate immunit/ is no( the rule in the Cnited #tates, the Cnited 'in!dom and other states in Bestern
Europe.
000 000 000
The restrictive application of #tate immunit/ is proper onl/ (hen the proceedin!s arise out of commercial
transactions of the forei!n soverei!n, its commercial activities or economic affairs. #tated differentl/, a #tate
ma/ be said to have descended to the level of an individual and can thus be deemed to have tacitl/ !iven its
consent to be sued onl/ (hen it enters into business contracts. -t does not appl/ (here the contract relates
to the e0ercise of its soverei!n functions. -n this case the pro+ects are an inte!ral part of the naval base
(hich is devoted to the defense of both the Cnited #tates and the Philippines, indisputabl/ a function of the
!overnment of the hi!hest orderG the/ are not utilized for nor dedicated to commercial or business purposes.
The other petitioners in the cases before us all aver the/ have acted in the dischar!e of their official
functions as officers or a!ents of the Cnited #tates. %o(ever, this is a matter of evidence. The char!es
a!ainst them ma/ not be summaril/ dismissed on their mere assertion that their acts are imputable to the
Cnited #tates of America, (hich has not !iven its consent to be sued. -n fact, the defendants are sou!ht to
be held ans(erable for personal torts in (hich the Cnited #tates itself is not involved. -f found liable, the/
and the/ alone must satisf/ the +ud!ment.
-n (este6o v. (ernando,
>3
a bureau director, actin! (ithout an/ authorit/ (hatsoever, appropriated private
land and converted it into public irri!ation ditches. #ued for the value of the lots invalidl/ ta'en b/ him, he
moved to dismiss the complaint on the !round that the suit (as in effect a!ainst the Philippine !overnment,
(hich had not !iven its consent to be sued. This Court sustained the denial of the motion and held that the
doctrine of state immunit/ (as not applicable. The director (as bein! sued in his private capacit/ for a
personal tort.
Bith these considerations in mind, (e no( proceed to resolve the cases at hand.
---
-t is clear from a stud/ of the records of 7.R. No. <334< that the individuall/Anamed petitioners therein (ere
actin! in the e0ercise of their official functions (hen the/ conducted the bu/Abust operation a!ainst the
complainant and thereafter testified a!ainst him at his trial. The said petitioners (ere in fact connected (ith
the Air &orce )ffice of #pecial -nvesti!ators and (ere char!ed precisel/ (ith the function of preventin! the
distribution, possession and use of prohibited dru!s and prosecutin! those !uilt/ of such acts. -t cannot for a
moment be ima!ined that the/ (ere actin! in their private or unofficial capacit/ (hen the/ apprehended and
later testified a!ainst the complainant. -t follo(s that for dischar!in! their duties as a!ents of the Cnited
#tates, the/ cannot be directl/ impleaded for acts imputable to their principal, (hich has not !iven its
consent to be sued. As (e observed in Sanders v. )eridiano1
>?
7iven the official character of the aboveAdescribed letters, (e have to conclude that the petitioners (ere,
le!all/ spea'in!, bein! sued as officers of the Cnited #tates !overnment. As the/ have acted on behalf of
that !overnment, and (ithin the scope of their authorit/, it is that !overnment, and not the petitioners
personall/, that is responsible for their acts.
The private respondent invo'es Article 24<3 of the Civil Code (hich holds the !overnment liable if it acts
throu!h a special a!ent. The ar!ument, it (ould seem, is premised on the !round that since the officers are
desi!nated Dspecial a!ents,D the Cnited #tates !overnment should be liable for their torts.
There seems to be a failure to distin!uish bet(een suabilit/ and liabilit/ and a misconception that the t(o
terms are s/non/mous. #uabilit/ depends on the consent of the state to be sued, liabilit/ on the applicable
la( and the established facts. The circumstance that a state is suable does not necessaril/ mean that it is
liableG on the other hand, it can never be held liable if it does not first consent to be sued. "iabilit/ is not
conceded b/ the mere fact that the state has allo(ed itself to be sued. Bhen the state does (aive its
soverei!n immunit/, it is onl/ !ivin! the plaintiff the chance to prove, if it can, that the defendant is liable.
The said article establishes a rule of liabilit!, not suabilit/. The !overnment ma/ be held liable under this rule
onl/ if it first allo(s itself to be sued throu!h an/ of the accepted forms of consent.
Moreover, the a!ent performin! his re!ular functions is not a special a!ent even if he is so denominated, as
in the case at bar. No less important, the said provision appears to re!ulate onl/ the relations of the local
state (ith its inhabitants and, hence, applies onl/ to the Philippine !overnment and not to forei!n
!overnments impleaded in our courts.
Be re+ect the conclusion of the trial court that the ans(er filed b/ the special counsel of the )ffice of the
#heriff ud!e Advocate of Clar' Air Base (as a submission b/ the Cnited #tates !overnment to its
+urisdiction. As (e noted in Republic v. Purisima,
>@
e0press (aiver of immunit/ cannot be made b/ a mere
counsel of the !overnment but must be effected throu!h a dul/Aenacted statute. Neither does such ans(er
come under the implied forms of consent as earlier discussed.
But even as (e are certain that the individual petitioners in 7.R. No. <334< (ere actin! in the dischar!e of
their official functions, (e hesitate to ma'e the same conclusion in 7.R. No. <329<. The contradictor/ factual
alle!ations in this case deserve in our vie( a closer stud/ of (hat actuall/ happened to the plaintiffs. The
record is too mea!er to indicate if the defendants (ere reall/ dischar!in! their official duties or had actuall/
e0ceeded their authorit/ (hen the incident in .uestion occurred. "ac'in! this information, this Court cannot
directl/ decide this case. The needed in.uir/ must first be made b/ the lo(er court so it ma/ assess and
resolve the conflictin! claims of the parties on the basis of the evidence that has /et to be presented at the
trial. )nl/ after it shall have determined in (hat capacit/ the petitioners (ere actin! at the time of the
incident in .uestion (ill this Court determine, if still necessar/, if the doctrine of state immunit/ is applicable.
-n 7.R. No. ?56?3, private respondent 7enove (as emplo/ed as a coo' in the Main Club located at the C.#.
Air &orce Recreation Center, also 'no(n as the )pen Mess Comple0, at ohn %a/ Air #tation. As mana!er of
this comple0, petitioner "amachia is responsible for eleven diversified activities !eneratin! an annual income
of P2 million. Cnder his e0ecutive mana!ement are three service restaurants, a cafeteria, a ba'er/, a Class
*- store, a coffee and pantr/ shop, a main cashier ca!e, an administrative office, and a decentralized
(arehouse (hich maintains a stoc' level of P233,333.33 per month in resale items. %e supervises 4:?
emplo/ees, one of (hom (as 7enove, (ith (hom the Cnited #tates !overnment has concluded a collective
bar!ainin! a!reement.
&rom these circumstances, the Court can assume that the restaurant services offered at the ohn %a/ Air
#tation parta'e of the nature of a business enterprise underta'en b/ the Cnited #tates !overnment in its
proprietar/ capacit/. #uch services are not e0tended to the American servicemen for free as a per.uisite of
membership in the Armed &orces of the Cnited #tates. Neither does it appear that the/ are e0clusivel/
offered to these servicemenG on the contrar/, it is (ell 'no(n that the/ are available to the !eneral public as
(ell, includin! the tourists in Ba!uio Cit/, man/ of (hom ma'e it a point to visit ohn %a/ for this reason. All
persons availin! themselves of this facilit/ pa/ for the privile!e li'e all other customers as in ordinar/
restaurants. Althou!h the prices are concededl/ reasonable and relativel/ lo(, such services are undoubtedl/
operated for profit, as a commercial and not a !overnmental activit/.
The conse.uence of this findin! is that the petitioners cannot invo'e the doctrine of state immunit/ to +ustif/
the dismissal of the dama!e suit a!ainst them b/ 7enove. #uch defense (ill not prosper even if it be
established that the/ (ere actin! as a!ents of the Cnited #tates (hen the/ investi!ated and later dismissed
7enove. &or that matter, not even the Cnited #tates !overnment itself can claim such immunit/. The reason
is that b/ enterin! into the emplo/ment contract (ith 7enove in the dischar!e of its proprietar/ functions, it
impliedl/ divested itself of its soverei!n immunit/ from suit.
But these considerations not(ithstandin!, (e hold that the complaint a!ainst the petitioners in the court
belo( must still be dismissed. Bhile suable, the petitioners are nevertheless not liable. -t is obvious that the
claim for dama!es cannot be allo(ed on the stren!th of the evidence before us, (hich (e have carefull/
e0amined.
The dismissal of the private respondent (as decided upon onl/ after a thorou!h investi!ation (here it (as
established be/ond doubt that he had polluted the soup stoc' (ith urine. The investi!ation, in fact, did not
stop there. $espite the definitive findin! of 7enove;s !uilt, the case (as still referred to the board of
arbitrators provided for in the collective bar!ainin! a!reement. This board unanimousl/ affirmed the findin!s
of the investi!ators and recommended 7enove;s dismissal. There (as nothin! arbitrar/ about the
proceedin!s. The petitioners acted .uite properl/ in terminatin! the private respondent;s emplo/ment for his
unbelievabl/ nauseatin! act. -t is surprisin! that he should still have the temerit/ to file his complaint for
dama!es after committin! his utterl/ dis!ustin! offense.
Concernin! 7.R. No. ?::3?, (e also find that the barbershops sub+ect of the concessions !ranted b/ the
Cnited #tates !overnment are commercial enterprises operated b/ private person;s. The/ are not a!encies of
the Cnited #tates Armed &orces nor are their facilities demandable as a matter of ri!ht b/ the American
servicemen. These establishments provide for the !roomin! needs of their customers and offer not onl/ the
basic haircut and shave Eas re.uired in most militar/ or!anizationsF but such other amenities as shampoo,
massa!e, manicure and other similar indul!ences. And all for a fee. -nterestin!l/, one of the concessionaires,
private respondent *alencia, (as even sent abroad to improve his tonsorial business, presumabl/ for the
benefit of his customers. No less si!nificantl/, if not more so, all the barbershop concessionaires are under
the terms of their contracts, re.uired to remit to the Cnited #tates !overnment fi0ed commissions in
consideration of the e0clusive concessions !ranted to them in their respective areas.
This bein! the case, the petitioners cannot plead an/ immunit/ from the complaint filed b/ the private
respondents in the court belo(. The contracts in .uestion bein! decidedl/ commercial, the conclusion
reached in the -nited States of +merica v. Rui$ case cannot be applied here.
The Court (ould have directl/ resolved the claims a!ainst the defendants as (e have done in 7.R. No.
?56?3, e0cept for the paucit/ of the record in the case at hand. The evidence of the alle!ed irre!ularit/ in
the !rant of the barbershop concessions is not before us. This means that, as in 7.R. No. <329<, the
respondent court (ill have to receive that evidence first, so it can later determine on the basis thereof if the
plaintiffs are entitled to the relief the/ see'. Accordin!l/, this case must also be remanded to the court belo(
for further proceedin!s.
-*
There are a number of other cases no( pendin! before us (hich also involve the .uestion of the immunit/ of
the Cnited #tates from the +urisdiction of the Philippines. This is cause for re!ret, indeed, as the/ mar the
traditional friendship bet(een t(o countries lon! allied in the cause of democrac/. -t is hoped that the soA
called DirritantsD in their relations (ill be resolved in a spirit of mutual accommodation and respect, (ithout
the inconvenience and asperit/ of liti!ation and al(a/s (ith +ustice to both parties.
B%ERE&)RE, after considerin! all the above premises, the Court hereb/ renders +ud!ment as follo(s1
4. -n 7.R. No. ?::3?, the petition is $-#M-##E$ and the respondent +ud!e is directed to proceed (ith the
hearin! and decision of Civil Case No. 6??2. The temporar/ restrainin! order dated $ecember 44, 45<:, is
"-&TE$.
2. -n 7.R. No. ?56?3, the petition is 7RANTE$ and Civil Case No. <25ARE25<F is $-#M-##E$.
8. -n 7.R. No. <334<, the petition is 7RANTE$ and Civil Case No. 449ACA<? is $-#M-##E$. The temporar/
restrainin! order dated )ctober 46, 45<?, is made permanent.
6. -n 7.R. No. <329<, the petition is $-#M-##E$ and the respondent court is directed to proceed (ith the
hearin! and decision of Civil Case No. 655:. The temporar/ restrainin! order dated )ctober 2?, 45<?, is
"-&TE$.
All (ithout an/ pronouncement as to costs.
#) )R$ERE$.
(ernan, C.., 5arvasa, %elencio-7errera, Gutierre$, r., Paras, (eliciano, Ganca!co, Padilla, Bidin, Sarmiento,
Cortes, Gri,o-+2uino, %edialdea and Regalado, ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-3@A?@ May >>, 198@
UNTE) ST#TES OF #MERC#, C#PT. -#MES E. G#LLO"#$, "LL#M . COLLNS a%& RO!ERT
GOHER,petitioners,
vs.
HON. ;. M. RUC, Pre*+&+%, -u&,e o. !ra%/( 2;, Cour' o. F+r*' %*'a%/e o. R+0a1 a%& ELGO )E
GUCM#N F CO., NC., respondents.
S!cip, Sala$ar, "una 1 %analo 1 (eliciano "a/ for petitioners.
Albert, *er!ara, Benares, Perias Q $omin!uez "a( )ffice for respondents.

#!#) S#NTOS, J.:
This is a petition to revie(, set aside certain orders and restrain the respondent +ud!e from tr/in! Civil Case No.
??5M of the defunct Court of &irst -nstance of Rizal.
The factual bac'!round is as follo(s1
At times material to this case, the Cnited #tates of America had a naval base in #ubic, Rambales. The base (as
one of those provided in the Militar/ Bases A!reement bet(een the Philippines and the Cnited #tates.
#ometime in Ma/, 45?2, the Cnited #tates invited the submission of bids for the follo(in! pro+ects
4. Repair offender s/stem, Alava Bharf at the C.#. Naval #tation #ubic Ba/, Philippines.
2. Repair t/phoon dama!e to NA# Cubi shorelineG repair t/phoon dama!e to shoreline revetment, NA*BA#E #ubicG
and repair to "e/te Bharf approach, NA*BA#E #ubic Ba/, Philippines.
Eli!io de 7uzman Q Co., -nc. responded to the invitation and submitted bids. #ubse.uent thereto, the compan/
received from the Cnited #tates t(o tele!rams re.uestin! it to confirm its price proposals and for the name of its
bondin! compan/. The compan/ complied (ith the re.uests. N-n its complaint, the compan/ alle!es that the Cnited
#tates had accepted its bids because DA re.uest to confirm a price proposal confirms the acceptance of a bid
pursuant to defendant Cnited #tates; biddin! practices.D ERollo, p. 83.F The truth of this alle!ation has not been
tested because the case has not reached the trial sta!e.O
-n une, 45?2, the compan/ received a letter (hich (as si!ned b/ Bilham -. Collins, $irector, Contracts $ivision,
Naval &acilities En!ineerin! Command, #outh(est Pacific, $epartment of the Nav/ of the Cnited #tates, (ho is one
of the petitioners herein. The letter said that the compan/ did not .ualif/ to receive an a(ard for the pro+ects
because of its previous unsatisfactor/ performance ratin! on a repair contract for the sea (all at the boat landin!s
of the C.#. Naval #tation in #ubic Ba/. The letter further said that the pro+ects had been a(arded to third parties.
-n the abovementioned Civil Case No. ??5AM, the compan/ sued the Cnited #tates of America and Messrs. ames
E. 7allo(a/, Billiam -. Collins and Robert 7ohier all members of the En!ineerin! Command of the C.#. Nav/. The
complaint is to order the defendants to allo( the plaintiff to perform the (or' on the pro+ects and, in the event
that specific performance (as no lon!er possible, to order the defendants to pa/ dama!es. The compan/ also
as'ed for the issuance of a (rit of preliminar/ in+unction to restrain the defendants from enterin! into contracts
(ith third parties for (or' on the pro+ects.
The defendants entered their special appearance for the purpose onl/ of .uestionin! the +urisdiction of this court
over the sub+ect matter of the complaint and the persons of defendants, the sub+ect matter of the complaint bein!
acts and omissions of the individual defendants as a!ents of defendant Cnited #tates of America, a forei!n
soverei!n (hich has not !iven her consent to this suit or an/ other suit for the causes of action asserted in the
complaint.D ERollo, p. 93.F
#ubse.uentl/ the defendants filed a motion to dismiss the complaint (hich included an opposition to the issuance
of the (rit of preliminar/ in+unction. The compan/ opposed the motion. The trial court denied the motion and
issued the (rit. The defendants moved t(ice to reconsider but to no avail. %ence the instant petition (hich see's
to restrain perpetuall/ the proceedin!s in Civil Case No. ??5AM for lac' of +urisdiction on the part of the trial court.
The petition is hi!hl/ impressed (ith merit.
The traditional rule of #tate immunit/ e0empts a #tate from bein! sued in the courts of another #tate (ithout its
consent or (aiver. This rule is a necessar/ conse.uence of the principles of independence and e.ualit/ of #tates.
%o(ever, the rules of -nternational "a( are not petrifiedG the/ are constantl/ developin! and evolvin!. And because
the activities of states have multiplied, it has been necessar/ to distin!uish themAbet(een soverei!n and
!overnmental acts E6ure imperiiF and private, commercial and proprietar/ acts E6ure gestionisF. The result is that
#tate immunit/ no( e0tends onl/ to acts +ure imperil The restrictive application of #tate immunit/ is no( the rule
in the Cnited #tates, the Cnited Kin!dom and other states in (estern Europe. E#ee Co.uia and $efensor #antia!o,
Public -nternational "a(, pp. 23?A235 N45<6O.F
The respondent +ud!e reco!nized the restrictive doctrine of #tate immunit/ (hen he said in his )rder den/in! the
defendants; Eno( petitionersF motion1 D A distinction should be made bet(een a strictl/ !overnmental function of
the soverei!n state from its private, proprietar/ or nonA !overnmental acts ERollo, p. 23.F %o(ever, the respondent
+ud!e also said1 D-t is the Court;s considered opinion that enterin! into a contract for the repair of (harves or
shoreline is certainl/ not a !overnmental function altho it ma/ parta'e of a public nature or character. As aptl/
pointed out b/ plaintiff;s counsel in his repl/ citin! the rulin! in the case of "/ons, -nc., N436 Phil. 956 E459<FO, and
(hich this Court .uotes (ith approval, viz.1
-t is ho(ever contended that (hen a soverei!n state enters into a contract (ith a private person, the state can be
sued upon the theor/ that it has descended to the level of an individual from (hich it can be implied that it has
!iven its consent to be sued under the contract. ...
000 000 000
Be a!ree to the above contention, and considerin! that the Cnited #tates !overnment, throu!h its a!enc/ at #ubic
Ba/, entered into a contract (ith appellant for stevedorin! and miscellaneous labor services (ithin the #ubic Ba/
Area, a C.#. Naval Reservation, it is evident that it can brin! an action before our courts for an/ contractual liabilit/
that that political entit/ ma/ assume under the contract. The trial court, therefore, has +urisdiction to entertain this
case ... ERollo, pp. 23A24.F
The reliance placed on "/ons b/ the respondent +ud!e is misplaced for the follo(in! reasons1
-n 7arr! "!ons, 3nc. vs. 0he -nited States of +merica, supra, plaintiff brou!ht suit in the Court of &irst -nstance of
Manila to collect several sums of mone/ on account of a contract bet(een plaintiff and defendant. The defendant
filed a motion to dismiss on the !round that the court had no +urisdiction over defendant and over the sub+ect
matter of the action. The court !ranted the motion on the !rounds that1 EaF it had no +urisdiction over the
defendant (ho did not !ive its consent to the suitG and EbF plaintiff failed to e0haust the administrative remedies
provided in the contract. The order of dismissal (as elevated to this Court for revie(.
-n sustainin! the action of the lo(er court, this Court said1
-t appearin! in the complaint that appellant has not complied (ith the procedure laid do(n in Article >>- of the
contract re!ardin! the prosecution of its claim a!ainst the Cnited #tates 7overnment, or, stated differentl/, it has
failed to first e0haust its administrative remedies a!ainst said 7overnment, the lo(er court acted properl/ in
dismissin! this case.EAt p. 95<.F
-t can thus be seen that the statement in respect of the (aiver of #tate immunit/ from suit (as purel/ !ratuitous
and, therefore, obiter so that it has no value as an imperative authorit/.
The restrictive application of #tate immunit/ is proper onl/ (hen the proceedin!s arise out of commercial
transactions of the forei!n soverei!n, its commercial activities or economic affairs. #tated differentl/, a #tate ma/
be said to have descended to the level of an individual and can thus be deemed to have tacitl/ !iven its consent to
be sued onl/ (hen it enters into business contracts. -t does not appl/ (here the contract relates to the e0ercise of
its soverei!n functions. -n this case the pro+ects are an inte!ral part of the naval base (hich is devoted to the
defense of both the Cnited #tates and the Philippines, indisputabl/ a function of the !overnment of the hi!hest
orderG the/ are not utilized for nor dedicated to commercial or business purposes.
That the correct test for the application of #tate immunit/ is not the conclusion of a contract b/ a #tate but the
le!al nature of the act is sho(n in S!2uia vs. "ope$, <6 Phil. 842 E4565F. -n that case the plaintiffs leased three
apartment buildin!s to the Cnited #tates of America for the use of its militar/ officials. The plaintiffs sued to
recover possession of the premises on the !round that the term of the leases had e0pired. The/ also as'ed for
increased rentals until the apartments shall have been vacated.
The defendants (ho (ere armed forces officers of the Cnited #tates moved to dismiss the suit for lac' of
+urisdiction in the part of the court. The Municipal Court of Manila !ranted the motion to dismissG sustained b/ the
Court of &irst -nstance, the plaintiffs (ent to this Court for revie( on certiorari. -n den/in! the petition, this Court
said1
)n the basis of the fore!oin! considerations (e are of the belief and (e hold that the real part/ defendant in
interest is the 7overnment of the Cnited #tates of AmericaG that an/ +ud!ment for bac' or -ncreased rentals or
dama!es (ill have to be paid not b/ defendants Moore and Tillman and their :6 coAdefendants but b/ the said C.#.
7overnment. )n the basis of the rulin! in the case of "and vs. $ollar alread/ cited, and on (hat (e have alread/
stated, the present action must be considered as one a!ainst the C.#. 7overnment. -t is clear hat the courts of the
Philippines includin! the Municipal Court of Manila have no +urisdiction over the present case for unla(ful detainer.
The .uestion of lac' of +urisdiction (as raised and interposed at the ver/ be!innin! of the action. The C.#.
7overnment has not , !iven its consent to the filin! of this suit (hich is essentiall/ a!ainst her, thou!h not in
name. Moreover, this is not onl/ a case of a citizen filin! a suit a!ainst his o(n 7overnment (ithout the latter;s
consent but it is of a citizen filin! an action a!ainst a forei!n !overnment (ithout said !overnment;s consent, (hich
renders more obvious the lac' of +urisdiction of the courts of his countr/. The principles of la( behind this rule are
so elementar/ and of such !eneral acceptance that (e deem it unnecessar/ to cite authorities in support thereof.
EAt p. 828.F
-n S!2uia,the Cnited #tates concluded contracts (ith private individuals but the contracts not(ithstandin! the
#tates (as not deemed to have !iven or (aived its consent to be sued for the reason that the contracts (ere
for6ure imperii and not for 6ure gestionis.
B%ERE&)RE, the petition is !rantedG the .uestioned orders of the respondent +ud!e are set aside and Civil Case
No. is dismissed. Costs a!ainst the private respondent.
0eehan&ee, +2uino, Concepcion, r., %elencio-7errera, Plana, G 8scolin, Relova, Gutierre$, r., #e la (uente,
Cuevas and +lampa!, ., concur.
(ernando, C.., too& no part.

Republic of the Philippines
SUPREME COURT
Manila
G.R. No. L-A0A0 Se5'e7ber 30, 19@?
FERN#N)O #. FROL#N, plaintiffAappellee,
vs.
P#N ORENT#L SHPPNG CO., defendantAappellant,
REPU!LC OF THE PHLPPNES, intervenorAappellee.
9uisumbing, S!cip, 9uisumbing and Sala$ar, for appellant.
8rnesto 'arago$a for appellee.
7ilarion -. arencio for the intervenor.
P#R#S, C.J.:
The factual antecedents of this case are sufficientl/ recited in the brief filed b/ the intervenorAappellee as follo(s1
4. )n &ebruar/ 8, 4594, plaintiffAappellee, &ernando A. &roilan, filed a complaint a!ainst the defendantAappellant,
Pan )riental #hippin! Co., alle!in! that he purchased from the #hippin! Commission the vessel &#A45? for
P233,333, pa/in! P93,333 do(n and a!reein! to pa/ the balance in installmentsG that to secure the pa/ment of
the balance of the purchase price, he e0ecuted a chattel mort!a!e of said vessel in favor of the #hippin!
CommissionG that for various reason, amon! them the nonApa/ment of the installments, the #hippin! Commission
too' possession of said vessel and considered the contract of sale cancelledG that the #hippin! Commission
chartered and delivered said vessel to the defendantAappellant Pan )riental #hippin! Co. sub+ect to the approval of
the President of the PhilippinesG that he appealed the action of the #hippin! Commission to the President of the
Philippines and, in its meetin! on Au!ust 29, 4593, the Cabinet restored him to all his ri!hts under his ori!inal
contract (ith the #hippin! CommissionG that he had repeatedl/ demanded from the Pan )riental #hippin! Co. the
possession of the vessel in .uestion but the latter refused to do so. %e, therefore, pra/ed that, upon the approval
of the bond accompan/in! his complaint, a (rit of replevin be issued for the seizure of said vessel (ith all its
e.uipment and appurtenances, and that after hearin!, he be ad+ud!ed to have the ri!htful possession thereof ERec.
on App. pp. 2A<F.
2. )n &ebruar/ 8, 4594, the lo(er court issued the (rit of replevin pra/ed for b/ &roilan and b/ virtue thereof the
Pan )riental #hippin! Co. (as divested of its possession of said vessel ERec. on App. p. 6?F.
8. )n March 4, 4594, Pan )riental #hippin! Co. filed its ans(er den/in! the ri!ht of &roilan to the possession of the
said vesselG it alle!ed that the action of the Cabinet on Au!ust 29, 4593, restorin! &roilan to his ri!hts under his
ori!inal contract (ith the #hippin! Commission (as null and voidG that, in an/ event, &roilan had not complied (ith
the conditions precedent imposed b/ the Cabinet for the restoration of his ri!hts to the vessel under the ori!inal
contractG that it suffered dama!es in the amount of P22,?:6.95 for (ron!ful replevin in the month of &ebruar/,
4594, and the sum of P4?,:94.<6 a month as dama!es suffered for (ron!ful replevin from March 4, 4594G it
alle!ed that it had incurred necessar/ and useful e0penses on the vessel amountin! to P42?,39?.84 and claimed
the ri!ht to retain said vessel until its useful and necessar/ e0penses had been reimbursed ERec. on App. pp. <A
98F.
6. )n November 43, 4594, after the leave of the lo(er court had been obtained, the intervenorAappellee,
7overnment of the Republic of the Philippines, filed a complaint in intervention alle!in! that &roilan had failed to
pa/ to the #hippin! Commission E(hich name (as later chan!ed to #hippin! AdministrationF the balance due on
the purchase price of the vessel in .uestion, the interest thereon, and its advances on insurance premium totallin!
P4:2,462.59, e0cludin! the dr/Adoc'in! e0penses incurred on said vessel b/ the Pan )riental #hippin! Co.G that
intervenor (as entitled to the possession of the said vessel either under the terms of the ori!inal contract as
supplemented b/ &roilan;s letter dated anuar/ 2<, 4565, or in order that it ma/ cause the e0tra+udicial sale
thereof under the Chattel Mort!a!e "a(. -t, therefore, pra/ed that &roilan be ordered to deliver the vessel in
.uestion to its authorized representative, the Board of "i.uidatorsG that &roilan be declared to be (ithout an/ ri!hts
on said vessel and the amounts he paid thereon forfeited or alternatel/, that the said vessel be delivered to the
Board of "i.uidators in order that the intervenor ma/ have its chattel mort!a!e e0tra+udiciall/ foreclosed in
accordance (ith the provisions of the Chattel Mort!a!e "a(G and that pendin! the hearin! on the merits, the said
vessel be delivered to it ERec. on App. pp. 96A::F.
9. )n November 25, 4594, the Pan )riental #hippin! Co. filed an ans(er to the complaint in intervention alle!in!
that the 7overnment of the Republic of the Philippines (as obli!ated to deliver the vessel in .uestion to it b/ virtue
of a contract of bareAboat charter (ith option to purchase e0ecuted on une 4:, 4565, b/ the latter in favor of the
formerG it also alle!ed that it had made necessar/ and useful e0penses on the vessel and claimed the ri!ht of
retention of the vessel. -t, therefore, pra/ed that, if the Republic of the Philippines succeeded in obtainin!
possession of the said vessel, to compl/ (ith its obli!ations of deliverin! to it EPan )riental #hippin! co.F or causin!
its deliver/ b/ recoverin! it from &roilan ERec. on App. pp. :5A<4F.
:. )n November 25, 4594, &roilan tendered to the Board of "i.uidators, (hich (as li.uidatin! the affairs of the
#hippin! Administration, a chec' in the amount of P4:2,9?:.5: in pa/ment of his obli!ation to the #hippin!
Administration for the said vessel as claimed in the complaint in intervention of the 7overnment of the Republic of
the Philippines. The Board of "i.uidators issued an official report therefor statin! that it (as a ;deposit pendin! the
issuance of an order of the Court of &irst -nstance of Manila; ERec. on App. pp. 52A58F.
?. )n $ecember ?, 4594, the 7overnment of the Republic of the Philippines brou!ht the matter of said pa/ment
and the circumstance surroundin! it to the attention of the lo(er court Din order that the/ ma/ be ta'en into
account b/ this %onorable Court in connection (ith the .uestions that are not pendin! before it for determinationD
ERec. on App. pp. <2A<:F.
<. )n &ebruar/ 8, 4592, the lo(er court held that the pa/ment b/ &roilan of the amount of P4:2,9?:.5: on
November 25, 4594, to the Board of "i.uidators constituted a pa/ment and a dischar!e of &roilan;s obli!ation to
the 7overnment of the Republic of the Philippines and ordered the dismissal of the latter;s complaint in
intervention. -n the same order, the lo(er court made it ver/ clear that said order did not preA+ud!e the .uestion
involved bet(een &roilan and the )riental #hippin! Co. (hich (as also pendin! determination in said court ERec.
on App. pp. 52A58F. This order dismissin! the complaint in intervention, but reservin! for future ad+udication the
controvers/ bet(een &roilan and the Pan )riental #hippin! Co. has alread/ become final since neither the
7overnment of the Republic of the Philippines nor the Pan )riental #hippin! Co. had appealed therefrom.
5. )n Ma/ 43, 4592, the 7overnment of the Republic of the Philippines filed a motion to dismiss the counterclaim
of the Pan )riental #hippin! Co. a!ainst it on the !round that the purpose of said counterclaim (as to compel the
7overnment of the Republic of the Philippines to deliver the vessel to it EPan )riental #hippin! Co.F in the event
that the 7overnment of the Republic of the Philippines recovers the vessel in .uestion from &roilan. -n vie(,
ho(ever, of the order of the lo(er court dated &ebruar/ 8, holdin! that the pa/ment made b/ &roilan to the Board
of "i.uidators constituted full pa/ment of &roilan;s obli!ation to the #hippin! Administration, (hich order had
alread/ become final, the claim of the Pan )riental #hippin! Co. a!ainst the Republic of the Philippines (as no
lon!er feasible, said counterclaim (as barred b/ prior +ud!ment and stated no cause of action. -t (as also alle!ed
that movant (as not sub+ect to the +urisdiction of the court in connection (ith the counterclaim. ERec. on App. pp.
56A5?F. This motion (as opposed b/ the Pan )riental #hippin! Co. in its (ritten opposition dated une 6, 4592
ERec. on app. pp. 45A436F.
43. -n an order dated ul/ 4, 4592, the lo(er court dismissed the counterclaim of the Pan )riental #hippin! Co. as
pra/ed for b/ the Republic of the Philippines ERec. on App. pp. 436A43:F.
44. -t if from this order of the lo(er court dismissin! its counterclaim a!ainst the 7overnment of the Republic of
the Philippines that Pan )riental #hippin! Co. has perfected the present appeal ERec. on App. p. 43?F.
The order of the Court of &irst -nstance of Manila, dismissin! the counterclaim of the defendant Pan )riental
#hippin! Co., from (hich the latter has appealed, reads as follo(s1
This is a motion to dismiss the counterclaim interposed b/ the defendant in its ans(er to the complaint in
intervention.
DThe counterclaim states as follo(s1
DC)CNTERC"A-M
DAs counterclaim a!ainst the intervenor Republic of the Philippines, the defendant alle!es1
D4. That the defendant reproduces herein all the pertinent alle!ations of the fore!oin! ans(er to the complaint in
intervention
D2. That, as sho(n b/ the alle!ations of the fore!oin! ans(er to the complaint in intervention, the defendant Pan
)riental #hippin! Compan/ is entitled to the possession of the vessel and the intervenor Republic of the Philippines
is bound under the contract of charter (ith option to purchase it entered into (ith the defendant to deliver that
possession to the defendant H (hether it actuall/ has the said possession or it does not have that possession from
the plaintiff &ernando A. &roilan and deliver the same to the defendantG
D8. That, not(ithstandin! demand, the intervenor Republic of the Philippines has not to date complied (ith its
obli!ation of deliverin! or causin! the deliver/ of the vessel to the defendant Pan )riental #hippin!
Compan/.:;/ph<l.n=t
DRE"-E&
DB%ERE&)RE, the defendant respectfull/ pra/s that +ud!ment be rendered orderin! the intervenor Republic of the
Philippines alternativel/ to deliver to the defendants the possession of the said vessel, or to compl/ (ith its
obli!ation to the defendant or causin! the deliver/ to the latter of the said vessel b/ recoverin! the same from
plaintiff, (ith costs.
DThe defendant pra/s for such other remed/ as the Court ma/ deem +ust and e.uitable in the premises.D
The !round of the motion to dismiss are EaF That the cause of action is barred b/ prior +ud!mentG EbF That the
counterclaim states no cause of actionG and EcF That this %onorable Court has no +urisdiction over the intervenor
!overnment of the Republic of the Philippines in connection (ith the counterclaim of the defendant Pan )riental
#hippin! Co.
The intervenor contends that the complaint in intervention havin! been dismissed and no appeal havin! been
ta'en, the dismissal of said complaint is tantamount to a +ud!ment.
The complaint in intervention did not contain an/ claim (hatsoever a!ainst the defendant Pan )riental #hippin!
Co.G hence, the counterclaim has no foundation.
The .uestion as to (hether the Court has +urisdiction over the intervenor (ith re!ard to the counterclaim, the
Court is of the opinion that it has no +urisdiction over said intervenor.
-t appearin!, therefore, that the !rounds of the motion to dismiss are (ell ta'en, the counterclaim of the defendant
is dismissed, (ithout pronouncement as to costs.
The defendant;s appeal is predicated upon the follo(in! assi!nments of error1
-. The lo(er court erred in dismissin! the counterclaim on the !round of prior +ud!ment.
--. The lo(er court erred in dismissin! the counterclaim on the !round that the counterclaim had no foundation
because made to a complaint in intervention that contained no claim a!ainst the defendant.
---. The lo(er court erred in dismissin! the counterclaim on the !round of alle!ed lac' of +urisdiction over the
intervenor Republic of the Philippines.
Be a!ree (ith appellant;s contention that its counterclaim is not barred b/ prior +ud!ment Eorder of &ebruar/ <,
4592, dismissin! the complaint in interventionF, first, because said counterclaim (as filed on November 25, 4594,
before the issuance of the order invo'edG and, secondl/, because in said order of &ebruar/ <, the court dismissed
the complaint in intervention, D(ithout, of course, precludin! the determination of the ri!ht of the defendant in the
instant case,D and sub+ect to the condition that the Drelease and cancellation of the chattel mort!a!e does not,
ho(ever, pre+ud!e the .uestion involved bet(een the plaintiff and the defendant (hich is still the sub+ect of
determination in this case.D -t is to be noted that the first condition referred to the ri!ht of the defendant, as
distin!uished from the second condition that e0pressl/ specified the controvers/ bet(een the plaintiff and the
defendant. That the first condition reserved the ri!ht of the defendant as a!ainst the intervenor, is clearl/ to be
deduced from the fact that the order of &ebruar/ < mentioned the circumstance that Dthe .uestion of the e0penses
of dr/doc'in! incurred b/ the defendant has been included in its counterclaim a!ainst the plaintiff,D apparentl/ as
one of the !rounds for !rantin! the motion to dismiss the complaint in intervention.
The defendant;s failure to appeal from the order of &ebruar/ < cannot, therefore, be held as barrin! the defendant
from proceedin! (ith its counterclaim, since, as alread/ stated, said order preserved its ri!ht as a!ainst the
intervenor. -ndeed, the maintenance of said ri!ht is in consonance (ith Rule 83, section 2, of the Rules of Court
providin! that Dif a counterclaim has been pleaded b/ a defendant prior to the service upon him of the plaintiff;s
motion to dismiss, the action shall not be dismissed a!ainst the defendant;s ob+ection unless the counterclaim can
remain pendin! for independent ad+udication b/ the court.D
The lo(er court also erred in holdin! that, as the intervenor had not made an/ claim a!ainst the defendant, the
latter;s counterclaim had no foundation. The complaint in intervention sou!ht to recover possession of the vessel in
.uestion from the plaintiff, and this claim is lo!icall/ adverse to the position assumed b/ the defendant that it has a
better ri!ht to said possession than the plaintiff (ho alle!es in his complaint that he is entitled to recover the
vessel from the defendant. At an/ rate a counterclaim should be +ud!ed b/ its o(n alle!ations, and not b/ the
averments of the adverse part/. -t should be recalled that the defendant;s theor/ is that the plaintiff had alread/
lost his ri!hts under the contract (ith the #hippin! Administration and that, on the other hand, the defendant is
rel/in! on the charter contract e0ecuted in its favor b/ the intervenor (hich is bound to protect the defendant in its
possession of the vessel. -n other (ords, the counterclaim calls for specific performance on the part of the
intervenor. As to (hether this counterclaim is meritorious is another .uestion (hich is not no( before us.
The other !round for dismissin! the defendant;s counterclaim is that the #tate is immune from suit. This is
untenable, because b/ filin! its complaint in intervention the 7overnment in effect (aived its ri!ht of nonsuabilit/.
The immunit/ of the state from suits does not deprive it of the ri!ht to sue private parties in its o(n courts. The
state as plaintiff ma/ avail itself of the different forms of actions open to private liti!ants. -n short, b/ ta'in! the
initiative in an action a!ainst a private part/, the state surrenders its privile!ed position and comes do(n to the
level of the defendant. The latter automaticall/ ac.uires, (ithin certain limits, the ri!ht to set up (hatever claims
and other defenses he mi!ht have a!ainst the state. The Cnited #tates #upreme Court thus e0plains1
DNo direct suit can be maintained a!ainst the Cnited #tates. But (hen an action is brou!ht b/ the Cnited #tates to
recover mone/ in the hands of a part/ (ho has a le!al claim a!ainst them, it (ould be a ver/ ri!id principle to
den/ to him the ri!ht of settin! up such claim in a court of +ustice, and turn him around to an application to
Con!ress.D E#inco, Philippine Political "a(, Tenth Ed., pp. 8:A8?, citin! C. #. vs. Rin!!old, < Pet. 493, < ". ed. <55.F
-t is ho(ever, contended for the intervenor that, if there (as at all an/ (aiver, it (as in favor of the plaintiff a!ainst
(hom the complaint in intervention (as directed. This contention is untenable. As alread/ stated, the complaint in
intervention (as in a sense in dero!ation of the defendant;s claim over the possession of the vessel in .uestion.
Bherefore, the appealed order is hereb/ reversed and set aside and the case remanded to the lo(er court for
further proceedin!s. #o ordered, (ithout costs.
Pablo, Padilla, %ontema!or, Re!es, +., ugo, Bautista +ngelo, Concepcion, and Re!es, .B."., ., concur.
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. L->A?00 February >9, 197>
;CTOR# #MG#!LE, plaintiffAappellant,
vs.
NCOL#S CUENC#, a* Co77+**+o%er o. Pub1+/ H+,(Hay* a%& REPU!LC OF THE PHLPPNES,
defendantsAappellees.

M#=#LNT#L, J.:p
This is an appeal from the decision of the Court of &irst -nstance of Cebu in its Civil Case No. RA95??,
dismissin! the plaintiff;s complaint.
*ictoria Ami!able, the appellant herein, is the re!istered o(ner of "ot No. :85 of the Banilad Estate in Cebu
Cit/ as sho(n b/ Transfer Certificate of Title No. TA4<3:3, (hich superseded Transfer Certificate of Title No.
RTA82?2 ETA8689F issued to her b/ the Re!ister of $eeds of Cebu on &ebruar/ 4, 4526. No annotation in
favor of the !overnment of an/ ri!ht or interest in the propert/ appears at the bac' of the certificate.
Bithout prior e0propriation or ne!otiated sale, the !overnment used a portion of said lot, (ith an area of
:,4:? s.uare meters, for the construction of the Man!o and 7orordo Avenues.
-t appears that said avenues (ere alread/ e0istin! in 4524 althou!h Dthe/ (ere in bad condition and ver/
narro(, unli'e the (ide and beautiful avenues that the/ are no(,D and Dthat the tracin! of said roads (as
be!un in 4526, and the formal construction in
4529.D G
)n March 2?, 459< Ami!able;s counsel (rote the President of the Philippines, re.uestin! pa/ment of the
portion of her lot (hich had been appropriated b/ the !overnment. The claim (as indorsed to the Auditor
7eneral, (ho disallo(ed it in his 5th -ndorsement dated $ecember 5, 459<. A cop/ of said indorsement (as
transmitted to Ami!able;s counsel b/ the )ffice of the President on anuar/ ?, 4595.
)n &ebruar/ :, 4595 Ami!able filed in the court a 2uo a complaint, (hich (as later amended on April 4?,
4595 upon motion of the defendants, a!ainst the Republic of the Philippines and Nicolas Cuenca, in his
capacit/ as Commissioner of Public %i!h(a/s for the recover/ of o(nership and possession of the :,4:?
s.uare meters of land traversed b/ the Man!o and 7orordo Avenues. #he also sou!ht the pa/ment of
compensator/ dama!es in the sum of P93,333.33 for the ille!al occupation of her land, moral dama!es in
the sum of P29,333.33, attorne/;s fees in the sum of P9,333.33 and the costs of the suit.
Bithin the re!lementar/ period the defendants filed a +oint ans(er den/in! the material alle!ations of the
complaint and interposin! the follo(in! affirmative defenses, to (it1 E4F that the action (as premature, the
claim not havin! been filed first (ith the )ffice of the Auditor 7eneralG E2F that the ri!ht of action for the
recover/ of an/ amount (hich mi!ht be due the plaintiff, if an/, had alread/ prescribedG E8F that the action
bein! a suit a!ainst the 7overnment, the claim for moral dama!es, attorne/;s fees and costs had no valid
basis since as to these items the 7overnment had not !iven its consent to be suedG and E6F that inasmuch
as it (as the province of Cebu that appropriated and used the area involved in the construction of Man!o
Avenue, plaintiff had no cause of action a!ainst the defendants.
$urin! the scheduled hearin!s nobod/ appeared for the defendants not(ithstandin! due notice, so the trial
court proceeded to receive the plaintiff;s evidence ex parte. )n ul/ 25, 4595 said court rendered its decision
holdin! that it had no +urisdiction over the plaintiff;s cause of action for the recover/ of possession and
o(nership of the portion of her lot in .uestion on the !round that the !overnment cannot be sued (ithout its
consentG that it had neither ori!inal nor appellate +urisdiction to hear, tr/ and decide plaintiff;s claim for
compensator/ dama!es in the sum of P93,333.33, the same bein! a mone/ claim a!ainst the !overnmentG
and that the claim for moral dama!es had lon! prescribed, nor did it have +urisdiction over said claim
because the !overnment had not !iven its consent to be sued. Accordin!l/, the complaint (as dismissed.
Cnable to secure a reconsideration, the plaintiff appealed to the Court of Appeals, (hich subse.uentl/
certified the case to Cs, there bein! no .uestion of fact involved.
The issue here is (hether or not the appellant ma/ properl/ sue the !overnment under the facts of the case.
-n the case of %inisterio vs. Court of (irst 3nstance of Cebu,
1
involvin! a claim for pa/ment of the value of a
portion of land used for the (idenin! of the 7orordo Avenue in Cebu Cit/, this Court, throu!h Mr. ustice
Enri.ue M. &ernando, held that (here the !overnment ta'es a(a/ propert/ from a private lando(ner for
public use (ithout !oin! throu!h the le!al process of e0propriation or ne!otiated sale, the a!!rieved part/
ma/ properl/ maintain a suit a!ainst the !overnment (ithout thereb/ violatin! the doctrine of !overnmental
immunit/ from suit (ithout its consent. Be there said1 .
... . -f the constitutional mandate that the o(ner be compensated for propert/ ta'en for public use (ere to
be respected, as it should, then a suit of this character should not be summaril/ dismissed. The doctrine of
!overnmental immunit/ from suit cannot serve as an instrument for perpetratin! an in+ustice on a citizen.
%ad the !overnment follo(ed the procedure indicated b/ the !overnin! la( at the time, a complaint (ould
have been filed b/ it, and onl/ upon pa/ment of the compensation fi0ed b/ the +ud!ment, or after tender to
the part/ entitled to such pa/ment of the amount fi0ed, ma/ it Dhave the ri!ht to enter in and upon the land
so condemned, to appropriate the same to the public use defined in the +ud!ment.D -f there (ere an
observance of procedural re!ularit/, petitioners (ould not be in the sad plaint the/ are no(. -t is unthin'able
then that precisel/ because there (as a failure to abide b/ (hat the la( re.uires, the !overnment (ould
stand to benefit. -t is +ust as important, if not more so, that there be fidelit/ to le!al norms on the part of
officialdom if the rule of la( (ere to be maintained. -t is not too much to sa/ that (hen the !overnment
ta'es an/ propert/ for public use, (hich is conditioned upon the pa/ment of +ust compensation, to be
+udiciall/ ascertained, it ma'es manifest that it submits to the +urisdiction of a court. There is no thou!ht
then that the doctrine of immunit/ from suit could still be appropriatel/ invo'ed.
Considerin! that no annotation in favor of the !overnment appears at the bac' of her certificate of title and
that she has not e0ecuted an/ deed of conve/ance of an/ portion of her lot to the !overnment, the appellant
remains the o(ner of the (hole lot. As re!istered o(ner, she could brin! an action to recover possession of
the portion of land in .uestion at an/time because possession is one of the attributes of o(nership. %o(ever,
since restoration of possession of said portion b/ the !overnment is neither convenient nor feasible at this
time because it is no( and has been used for road purposes, the onl/ relief available is for the !overnment
to ma'e due compensation (hich it could and should have done /ears a!o. To determine the due
compensation for the land, the basis should be the price or value thereof at the time of the ta'in!.
>
As re!ards the claim for dama!es, the plaintiff is entitled thereto in the form of le!al interest on the price of
the land from the time it (as ta'en up to the time that pa/ment is made b/ the !overnment.
3
-n addition,
the !overnment should pa/ for attorne/;s fees, the amount of (hich should be fi0ed b/ the trial court after
hearin!.
B%ERE&)RE, the decision appealed from is hereb/ set aside and the case remanded to the court a 2uo for
the determination of compensation, includin! attorne/;s fees, to (hich the appellant is entitled as above
indicated. No pronouncement as to costs.
Concepcion, C.., Re!es, .B."., 'aldivar, Castro, (ernando, 0eehan&ee, Barredo, )illamor and %a&asiar .,
concur.
Republic of the Philippines
SUPREME COURT
Manila
#EC)N$ $-*-#-)N

G.R. No. L-300?? )e/e7ber 19, 1973
LORENCO S#$SON, a* H+,(Hay #u&+'or, !ureau o. Pub1+/ H+,(Hay*, Cebu F+r*' E%,+%eer+%,
)+*'r+/'I CORNELO FORNER, a* Re,+o%a1 Su5erE+*+%, #u&+'or, Ea*'er% ;+*aya* Re,+o%I #STERO,
!U3UERON, #);ENTOR FERN#N)EC, M#NUEL S. LEP#T#N, R#MON 3UR#NTE, a%& TEO)ULFO
REGS, petitioners,
vs.
FELPE SNGSON, a* *o1e oH%er a%& 5ro5r+e'or o. S+%,9+er Mo'or SerE+/e, respondent.
Office of the Solicitor General (elix ). %a&asiar and Solicitor Bernardo P. Pardo for petitioners.
Teodoro Almase and Casiano C. "aput for respondent.

FERN#N)O, J.:
The real part/ in interest before this Court in this certiorari proceedin! to revie( a decision of the Court of
&irst -nstance of Cebu is the Republic of the Philippines, althou!h the petitioners are the public officials (ho
(ere named as respondents
1
in a mandamus suit belo(. #uch is the contention of the then #olicitor 7eneral,
no( Associate ustice, &eli0 *. Ma'asiar,
>
for as he did point out, (hat is involved is a mone/ claim a!ainst
the !overnment, predicated on a contract. The basic doctrine of nonAsuabilit/ of the !overnment (ithout its
consent is thus decisive of the controvers/. There is a !overnin! statute that is controllin!.
3
Respondent
&elipe #in!son, the claimant, for reasons 'no(n to him, did not choose to abide b/ its terms. That (as a
fatal misstep. The lo(er court, ho(ever, did not see it that (a/. Be cannot affirm its decision.
As found b/ the lo(er court, the facts are the follo(in!1 D-n anuar/, 45:?, the )ffice of the $istrict En!ineer
re.uisitioned various items of spare parts for the repair of a $A< bulldozer, ... . The re.uisition ER-* No.
:?L3884F (as si!ned b/ the $istrict En!ineer, Adventor &ernandez, and the Re.uisitionin! )fficer Ecivil
en!ineerF, Manuel #. "epatan. ... -t (as approved b/ the #ecretar/ of Public Bor's and Communications,
Antonio *. Ra.uiza. -t is noted in the approval of the said re.uisition that DThis is an e0ception to the
tele!ram dated &eb. 24, 45:? of the #ecretar/ of Public Bor's and Communications.D ... #o, a canvass or
public biddin! (as conducted on Ma/ 9, 45:? ... . The committee on a(ard accepted the bid of the #in!'ier
Motor #ervice No(ned b/ respondent &elipe #in!sonO for the sum of P68,983.33. ... #ubse.uentl/, it (as
approved b/ the #ecretar/ of Public Bor's and CommunicationsG and on Ma/ 4:, 45:? the #ecretar/ sent a
letterAorder to the #in!'ier Motor #ervice, Mandaue, Cebu re.uestin! it to immediatel/ deliver the items
listed therein for the lot price of P68,983.33. ... -t (ould appear that a purchase order si!ned b/ the $istrict
En!ineer, the Re.uisitionin! )fficer and the Procurement )fficer, (as addressed to the #in!'ier Motor
#ervice. ... -n due course the *oucher No. 3?<3: reached the hands of %i!h(a/ Auditor #a/son for preA
audit. %e then made in.uiries about the reasonableness of the price. ... Thus, after findin! from the
indorsements of the $ivision En!ineer and the Commissioner of Public %i!h(a/s that the prices of the
various spare parts are +ust and reasonable and that the re.uisition (as also approved b/ no less than the
#ecretar/ of Public Bor's and Communications (ith the verification of *.M. #ecarro a representative of the
Bureau of #uppl/ Coordination, Manila, he approved it for pa/ment in the sum of P86,<26.33, (ith the
retention of 23@ e.uivalent to P<,?3:.33. ... %is reason for (ithholdin! the 23@ e.uivalent to P<,?3:.33
(as to submit the voucher (ith the supportin! papers to the #upervisin! Auditor, (hich he did. ... The
voucher ... (as paid on une 5, 45:? in the amount of P86,<26.33 to the petitioner Nrespondent #in!sonO.
)n une 43,45:?, %i!h(a/ Auditor #a/son received a tele!ram from #upervisin! Auditor &ornier .uotin! a
tele!raphic messa!e of the 7eneral Auditin! )ffice (hich states1 D-n vie( of e0cessive prices char!e for
purchase of spare parts and e.uipment sho(n b/ vouchers alread/ submitted this )ffice direct all hi!h(a/
auditors refer 7eneral )ffice pa/ment similar nature for appropriate action.D ... -n the interim it (ould
appear that (hen the voucher and the supportin! papers reached the 7A), a canvass (as made of the spare
parts amon! the suppliers in Manila, particularl/, the C#- EPhil.F, (hich is the e0clusive dealer of the spare
parts of the caterpillar tractors in the Philippines. #aid firm thus submitted its .uotations at P2,925.:6 onl/
(hich is P63,333.33 less than the price of the #in!'ier. ... -n vie( of the overpricin! the 7A) too' up the
matter (ith the #ecretar/ of Public Bor's in a third indorsement of ul/ 4<, 45:?. ... The #ecretar/ then
circularized a tele!ram holdin! the district en!ineer responsible for overpricin!.D
?
Bhat is more, char!es for
malversation (ere filed a!ainst the district en!ineer and the civil en!ineer involved. -t (as the failure of the
%i!h(a/s Auditor, one of the petitioners before us, that led to the filin! of the mandamus suit belo(, (ith
no( respondent #in!son as sole proprietor of #in!'ier Motor #ervice, bein! ad+ud!ed as entitled to collect
the balance of P<,?3:.33, the contract in .uestion havin! been upheld. %ence this appeal b/ certiorari.
4. To state the facts is to ma'e clear the solidit/ of the stand ta'en b/ the Republic. The lo(er court (as
unmindful of the fundamental doctrine of nonAsuabilit/. #o it (as stressed in the petition of the then #olicitor
7eneral Ma'asiar. Thus1 D-t is apparent that respondent #in!son;s cause of action is a mone/ claim a!ainst
the !overnment, for the pa/ment of the alle!ed balance of the cost of spare parts supplied b/ him to the
Bureau of Public %i!h(a/s. Assumin! momentaril/ the validit/ of such claim, althou!h as (ill be sho(n
hereunder, the claim is void for the cause or consideration is contrar/ to la(, morals or public polic/,
mandamus is not the remed/ to enforce the collection of such claim a!ainst the #tate but a ordinar/ action
for specific performance ... . Actuall/, the suit dis!uised as one for mandamus to compel the Auditors to
approve the vouchers for pa/ment, is a suit a!ainst the #tate, (hich cannot prosper or be entertained b/ the
Court e0cept (ith the consent of the #tate ... . -n other (ords, the respondent should have filed his claim
(ith the 7eneral Auditin! )ffice, under the provisions of Com. Act 82? ... (hich prescribe the conditions
under (hich mone/ claim a!ainst the !overnment ma/ be
filed ....D
@
Common(ealth Act No. 82? is .uite e0plicit. -t is therein provided1 D-n all cases involvin! the
settlement of accounts or claims, other than those of accountable officers, the Auditor 7eneral shall act and
decide the same (ithin si0t/ da/s, e0clusive of #unda/s and holida/s, after their presentation. -f said
accounts or claims need reference to other persons, office or offices, or to a part/ interested, the period
aforesaid shall be counted from the time the last comment necessar/ to a proper decision is received b/
him.D
A
Thereafter, the procedure for appeal is indicated1 DThe part/ a!!rieved b/ the final decision of the
Auditor 7eneral in the settlement of an account or claim ma/, (ithin thirt/ da/s from receipt of the decision,
ta'e an appeal in (ritin!1 EaF To the President of the Cnited #tates, pendin! the final and complete
(ithdra(al of her soverei!nt/ over the Philippines, or EbF To the President of the Philippines, or EcF To the
#upreme Court of the Philippines if the appellant is a private person or entit/.D
7
2. Bith the facts undisputed and the statute far from indefinite or ambi!uous, the appealed decision defies
e0planation. -t (ould be to disre!ard a basic corollar/ of the cardinal postulate of nonAsuabilit/. -t is true
that once consent is secured, an action ma/ be filed. There is nothin! to prevent the #tate, ho(ever, in such
statutor/ !rant, to re.uire that certain administrative proceedin!s be had and be e0hausted. Also, the proper
forum in the +udicial hierarch/ can be specified if thereafter an appeal (ould be ta'en b/ the part/
a!!rieved. %ere, there (as no rulin! of the Auditor 7eneral. Even had there been such, the court to (hich
the matter should have been elevated is this TribunalG the lo(er court could not le!all/ act on the matter.
Bhat transpired (as an/thin! but that. -t is .uite obvious then that it does not have the imprint of validit/.
B%ERE&)RE, the decision of the Court of &irst -nstance of Cebu of #eptember 6, 45:< is reversed and set
aside, and the suit for mandamus filed a!ainst petitioners, respondents belo(, is dismissed. Bith costs
a!ainst respondent &elipe #in!son.
'aldivar >Chairman?, Barredo, +ntonio, (ernande$ and +2uino, ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L->3139 )e/e7ber 17, 19AA
MO!L PHLPPNES E2PLOR#TON, NC., plaintiffAappellant,
vs.
CUSTOMS #RR#STRE SER;CE a%& !URE#U o. CUSTOMS, defendantsAappellees.
+le6andro Basin, r. and +ssociates for plaintiff-appellant.
(elipe 0. Cuison for defendants-appellees.
!ENGCON, -.P., J.:
&our cases of rotar/ drill parts (ere shipped from abroad on #.#. D"eovilleD sometime in November of 45:2,
consi!ned to Mobil Philippines E0ploration, -nc., Manila. The shipment arrived at the Port of Manila on April
43, 45:8, and (as dischar!ed to the custod/ of the Customs Arrastre #ervice, the unit of the Bureau of
Customs then handlin! arrastre operations therein. The Customs Arrastre #ervice later delivered to the
bro'er of the consi!nee three cases onl/ of the shipment.
)n April 6, 45:6 Mobil Philippines E0ploration, -nc., filed suit in the Court of &irst -nstance of Manila a!ainst
the Customs Arrastre #ervice and the Bureau of Customs to recover the value of the undelivered case in the
amount of P4<,658.8? plus other dama!es.
)n April 23, 45:6 the defendants filed a motion to dismiss the complaint on the !round that not bein!
persons under the la(, defendants cannot be sued.
After plaintiff opposed the motion, the court, on April 29, 45:6, dismissed the complaint on the !round that
neither the Customs Arrastre #ervice nor the Bureau of Customs is suable. Plaintiff appealed to Cs from the
order of dismissal.
Raised, therefore, in this appeal is the purel/ le!al .uestion of the defendants; suabilit/ under the facts
stated.
Appellant contends that not all !overnment entities are immune from suitG that defendant Bureau of
Customs as operator of the arrastre service at the Port of Manila, is dischar!in! proprietar/ functions and as
such, can be sued b/ private individuals.
The Rules of Court, in #ection 4, Rule 8, provide1
#ECT-)N 4. 4ho ma! be parties.H)nl/ natural or +uridical persons or entities authorized b/ la( ma/ be
parties in a civil action.
Accordin!l/, a defendant in a civil suit must be E4F a natural personG E2F a +uridical person or E8F an entit/
authorized b/ la( to be sued. Neither the Bureau of Customs nor Ea fortioriF its function unit, the Customs
Arrastre #ervice, is a person. The/ are merel/ parts of the machiner/ of 7overnment. The Bureau of
Customs is a bureau under the $epartment of &inance E#ec. <4, Revised Administrative CodeFG and as
stated, the Customs Arrastre #ervice is a unit of the Bureau of Custom, set up under Customs Administrative
)rder No. <A:2 of November 5, 45:2 EAnne0 DAD to Motion to $ismiss, pp. 48A49, Record an AppealF. -t
follo(s that the defendants herein cannot he sued under the first t(o abovementioned cate!ories of natural
or +uridical persons.
Nonetheless it is ur!ed that b/ authorizin! the Bureau of Customs to en!a!e in arrastre service, the la(
thereb/impliedl! authori$es it to be sued as arrastre operator, for the reason that the nature of this function
Earrastre serviceF is proprietar/, not !overnmental. Thus, insofar as arrastre operation is concerned,
appellant (ould put defendants under the third cate!or/ of Dentities authorized b/ la(D to be sued. #tated
differentl/, it is ar!ued that (hile there is no la( e0pressl/ authorizin! the Bureau of Customs to sue or be
sued, still its capacit/ to be sued is implied from its ver/ po(er to render arrastre service at the Port of
Manila, (hich it is alle!ed, amounts to the transaction of a private business.
The statutor/ provision on arrastre service is found in #ection 4248 of Republic Act 458? ETariff and Customs
Code, effective une 4, 459?F, and it states1
#EC. 4248. Receiving, 7andling, Custod! and #eliver! of +rticles.HThe Bureau of Customs shall have
e0clusive supervision and control over the receivin!, handlin!, custod/ and deliver/ of articles on the
(harves and piers at all ports of entr/ and in the e0ercise of its functions it is hereb/ authorized to ac.uire,
ta'e over, operate and superintend such plants and facilities as ma/ be necessar/ for the receivin!,
handlin!, custod/ and deliver/ of articles, and the convenience and comfort of passen!ers and the handlin!
of ba!!a!eG as (ell as to ac.uire fire protection e.uipment for use in the piers1 Provided, That (henever in
his +ud!ment the receivin!, handlin!, custod/ and deliver/ of articles can be carried on b/ private parties
(ith !reater efficienc/, the Commissioner ma/, after public biddin! and sub+ect to the approval of the
department head, contract (ith an/ private part/ for the service of receivin!, handlin!, custod/ and deliver/
of articles, and in such event, the contract ma/ include the sale or lease of !overnmentAo(ned e.uipment
and facilities used in such service.
-n +ssociated 4or&ers -nion, et al. vs. Bureau of Customs, et al., "A2485?, resolution of Au!ust :, 45:8,
this Court indeed held Dthat the fore!oin! statutor/ provisions authorizin! the !rant b/ contract to an/
private part/ of the ri!ht to render said arrastre services necessaril/ impl/ that the same is deemed b/
Con!ress to be proprietar/ or nonA!overnmental function.D The issue in said case, ho(ever, (as (hether
laborers en!a!ed in arrastre service fall under the concept of emplo!ees in the 7overnment emplo!ed in
governmental functions for purposes of the prohibition in #ection 44, Republic Act <?9 to the effect that
Demplo/ees in the 7overnment . . . shall not stri'e,D but Dma/ belon! to an/ labor or!anization (hich does
not impose the obli!ation to stri'e or to +oin in stri'e,D (hich prohibition Dshall appl/ onl/ to emplo/ees
emplo/ed in !overnmental functions of the 7overnment . . . .
Thus, the rulin! therein (as that the Court of -ndustrial Relations had +urisdiction over the sub+ect matter of
the case, but not that the Bureau of Customs can be sued. #aid issue of suabilit/ (as not resolved, the
resolution statin! onl/ that Dthe issue on the personalit/ or lac' of personalit/ of the Bureau of Customs to
be sued does not affect the +urisdiction of the lo(er court over the sub+ect matter of the case, aside from the
fact that amendment ma/ be made in the pleadin!s b/ the inclusion as respondents of the public officers
deemed responsible, for the unfair labor practice acts char!ed b/ petitionin! CnionsD.
No(, the fact that a nonAcorporate !overnment entit/ performs a function proprietar/ in nature does not
necessaril/ result in its bein! suable. -f said nonA!overnmental function is underta'en as an incident to its
!overnmental function, there is no (aiver thereb/ of the soverei!n immunit/ from suit e0tended to such
!overnment entit/. This is the doctrine reco!nized in Bureau of Printing, et al. vs. Bureau of Printing
8mplo!ees +ssociation, et al., "A49?94, anuar/ 2<, 45:41
The Bureau of Printin! is an office of the 7overnment created b/ the Administrative Code of 454: EAct No.
2:9?F. As such instrumentalit/ of the 7overnment, it operates under the direct supervision of the E0ecutive
#ecretar/, )ffice of the President, and is Dchar!ed (ith the e0ecution of all printin! and bindin!, includin!
(or' incidental to those processes, re.uired b/ the National 7overnment and such other (or' of the same
character as said Bureau ma/, b/ la( or b/ order of the E#ecretar/ of &inanceF E0ecutive #ecretar/, be
authorized to underta'e . . . .D E#ec. 4:66, Rev. Adm. Code.F -t has no corporate e0istence, and its
appropriations are provided for in the 7eneral Appropriations Act. $esi!ned to meet the printin! needs of the
7overnment, it is primaril/ a service bureau and, obviousl/, not en!a!ed in business or occupation for
pecuniar/ profit.
000 000 000
. . . Clearl/, (hile the Bureau of Printin! is allo(ed to underta'e private printin! +obs, it cannot be pretended
that it is thereb/ an industrial or business concern. The additional (or' it e0ecutes for private parties is
merel/ incidental to its function, and althou!h such (or' ma/ be deemed proprietar/ in character, there is
no sho(in! that the emplo/ees performin! said proprietar/ function are separate and distinct from those
emolo/ed in its !eneral !overnmental functions.
000 000 000
-ndeed, as an office of the 7overnment, (ithout an/ corporate or +uridical personalit/, the Bureau of Printin!
cannot be sued E#ec. 4, Rule 8, Rules of Court.F An/ suit, action or proceedin! a!ainst it, if it (ere to
produce an/ effect, (ould actuall/ be a suit, action or proceedin! a!ainst the 7overnment itself, and the rule
is settled that the 7overnment cannot be sued (ithout its consent, much less over its ob+ection. E#ee Metran
vs. Paredes, 69 )ff. 7az. 2<89G An!at River -rri!ation #/stem, et al. vs. An!at River Bor'ers Cnion, et al.,
7.R. Nos. "A43568A66, $ecember 2<, 459?.F
The situation here is not materiall/ different. The Bureau of Customs, to repeat, is part of the $epartment of
&inance E#ec. <4, Rev. Adm. CodeF, (ith no personalit/ of its o(n apart from that of the national
!overnment. -ts primar/ function is !overnmental, that of assessin! and collectin! la(ful revenues from
imported articles and all other tariff and customs duties, fees, char!es, fines and penalties E#ec. :32, R.A.
458?F. To this function, arrastre service is a necessar/ incident. &or practical reasons said revenues and
customs duties can not be assessed and collected b/ simpl/ receivin! the importer;s or ship a!ent;s or
consi!nee;s declaration of merchandise bein! imported and imposin! the dut/ provided in the Tariff la(.
Customs authorities and officers must see to it that the declaration tallies (ith the merchandise actuall/
landed. And this chec'in! up re.uires that the landed merchandise be hauled from the ship;s side to a
suitable place in the customs premises to enable said customs officers to ma'e it, that is, it re.uires arrastre
operations.
4
Clearl/, therefore, althou!h said arrastre function ma/ be deemed proprietar/, it is a necessar/ incident of
the primar/ and !overnmental function of the Bureau of Customs, so that en!a!in! in the same does not
necessaril/ render said Bureau liable to suit. &or other(ise, it could not perform its !overnmental function
(ithout necessaril/ e0posin! itself to suit. #overei!n immunit/, !ranted as to the end, should not be denied
as to the necessar/ means to that end.
And herein lies the distinction bet(een the present case and that of 5ational +irports Corporation vs.
0eodoro, 54 Phil. 238, on (hich appellant (ould rel/. &or there, the Civil Aeronautics Administration (as
found have for its prime reason for e0istence not a !overnmental but a proprietar/ function, so that to it the
latter (as not a mere incidental function1
Amon! the !eneral po(ers of the Civil Aeronautics Administration are, under #ection 8, to e0ecute contracts
of an/ 'ind, to purchase propert/, and to !rant concessions ri!hts, and under #ection 6, to char!e landin!
fees, ro/alties on sales to aircraft of aviation !asoline, accessories and supplies, and rentals for the use of
an/ propert/ under its mana!ement.
These provisions confer upon the Civil Aeronautics Administration, in our opinion, the po(er to sue and be
sued. The po(er to sue and be sued is implied from the po(er to transact private business. . . .
000 000 000
The Civil Aeronautics Administration comes under the cate!or/ of a private entit/. Althou!h not a bod/
corporate it (as created, li'e the National Airports Corporation, not to maintain a necessar/ function of
!overnment, but to run (hat is essentiall/ a business, even if revenues be not its prime ob+ective but rather
the promotion of travel and the convenience of the travellin! public. . . .
Re!ardless of the merits of the claim a!ainst it, the #tate, for obvious reasons of public polic/, cannot be
sued (ithout its consent. Plaintiff should have filed its present claim to the 7eneral Auditin! )ffice, it bein!
for mone/ under the provisions of Common(ealth Act 82?, (hich state the conditions under (hich mone/
claims a!ainst the 7overnment ma/ be filed.
-t must be remembered that statutor/ provisions (aivin! #tate immunit/ from suit are strictl/ construed and
that (aiver of immunit/, bein! in dero!ation of soverei!nt/, (ill not be li!htl/ inferred. E65 Am. ur., #tates,
Territories and $ependencies, #ec. 5:, p. 846G Pett/ vs. TennesseeAMissouri Brid!e Com., 895 C.#. 2?9, 8 ".
Ed. <36, ?5 #. Ct. ?<9F. &rom the provision authorizin! the Bureau of Customs to lease arrastre operations
to private parties, Be see no authorit/ to sue the said Bureau in the instances (here it underta'es to
conduct said operation itself. The Bureau of Customs, actin! as part of the machiner/ of the national
!overnment in the operation of the arrastre service, pursuant to e0press le!islative mandate and as a
necessar/ incident of its prime !overnmental function, is immune from suit, there bein! no statute to the
contrar/.
B%ERE&)RE, the order of dismissal appealed from is hereb/ affirmed, (ith costs a!ainst appellant. #o
ordered.
Concepcion, C.., Re/es, .B."., Barrera, $izon, Re!ala, Raldivar and #anchez, ., concur.
%a&alintal, ., concurs in the result.
Castro, ., reserves his vote.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-1@7@1 -a%uary >8, 19A1
!URE#U OF PRNTNG, SER#FN S#L;#)OR a%& M#R#NO LE)ESM#, petitioners,
vs.
THE !URE#U OF PRNTNG EMPLO$EES #SSOC#TON 4NLU6, P#CFCO #);NCUL#, RO!ERTO
MEN)OC#, PONC#NO #RG#N)# a%& TEO)ULO TOLER#N, respondents.
Office of the Solicitor General for petitioners.
8ulogio R. "erum for respondents.
GUTERREC )#;), J.B
This is a petition for certiorari and prohibition (ith preliminar/ in+unction to annul Certain orders of the
respondent Court of -ndustrial Relations and to restrain it from further proceedin! in the action for unfair
labor practice pendin! before it on the !round of lac' of +urisdiction. 7ivin! due course to the petition, this
Court ordered the issuance of the (rit of preliminar/ in+unction pra/ed for (ithout bond.
The action in .uestion (as H upon complaint of the respondents Bureau of Printin! Emplo/ees Association
EN"CF Pacifico Advincula, Roberto Mendoza, Ponciano Ar!anda and Teodulo Toleran H filed b/ an actin!
prosecutor of the -ndustrial Court a!ainst herein petitioner Bureau of Printin!, #erafin #alvador, the Actin!
#ecretar/ of the $epartment of 7eneral #ervices, and Mariano "edesma the $irector of the Bureau of
Printin!. The complaint alle!ed that #erafin #alvador and Mariano "edesma have been en!a!in! in unfair
labor practices b/ interferin! (ith, or coercin! the emplo/ees of the Bureau of Printin! particularl/ the
members of the complainin! association petition, in the e0ercise of their ri!ht to selfAor!anization an
discriminatin! in re!ard to hire and tenure of their emplo/ment in order to discoura!e them from pursuin!
the union activities.
Ans(erin! the complaint, the petitioners Bureau of Printin!, #erafin #alvador and Mariano "edesma denied
the char!es of unfair labor practices attributed to the and, b/ (a/ of affirmative defenses, alle!ed, amon!
other thin!s, that respondents Pacifico Advincula, Roberto Mendoza Ponciano Ar!anda and Teodulo Toleran
(ere suspended pendin! result of an administrative investi!ation a!ainst them for breach of Civil #ervice
rules and re!ulations petitionsG that the Bureau of Printin! has no +uridical personalit/ to sue and be suedG
that said Bureau of Printin! is not an industrial concern en!a!ed for the purpose of !ain but is an a!enc/ of
the Republic performin! !overnment functions. &or relief, the/ pra/ed that the case be dismissed for lac' of
+urisdiction. Thereafter, before the case could be heard, petitioners filed an D)mnibus MotionD as'in! for a
preliminar/ hearin! on the .uestion of +urisdiction raised b/ them in their ans(er and for suspension of the
trial of the case on the merits pendin! the determination of such +urisdictional .uestion. The motion (as
!ranted, but after hearin!, the trial +ud!e of the -ndustrial Court in an order dated anuar/ 2?, 4595
sustained the +urisdiction of the court on the theor/ that the functions of the Bureau of Printin! are
De0clusivel/ proprietar/ in nature,D and, conse.uentl/, denied the pra/er for dismissal. Reconsideration of
this order havin! been also denied b/ the court in banc, the petitioners brou!ht the case to this Court
throu!h the present petition for certiorari and prohibition.
Be find the petition to be meritorious.
The Bureau of Printin! is an office of the 7overnment created b/ the Administrative Code of 454: EAct No.
2:9?F. As such instrumentalit/ of the 7overnment, it operates under the direct supervision of the E0ecutive
#ecretar/, )ffice of the President, and is Dchar!ed (ith the e0ecution of all printin! and bindin!, includin!
(or' incidental to those processes, re.uired b/ the National 7overnment and such other (or' of the same
character as said Bureau ma/, b/ la( or b/ order of the E#ecretar/ of &inanceF E0ecutive #ecretar/, be
authorized to underta'e . . ..D E#ee. 4:66, Rev. Adm. CodeF. -t has no corporate e0istence, and its
appropriations are provided for in the 7eneral Appropriations Act. $esi!ned to meet the printin! needs of the
7overnment, it is primaril/ a service bureau and obviousl/, not en!a!ed in business or occupation for
pecuniar/ profit.
-t is true, as stated in the order complained of, that the Bureau of Printin! receives outside +obs and that
man/ of its emplo/ees are paid for overtime (or' on re!ular (or'in! da/s and on holida/s, but these facts
do not +ustif/ the conclusion that its functions are De0clusivel/ proprietar/ in nature.D )vertime (or' in the
Bureau of Printin! is done onl/ (hen the interest of the service so re.uires Esec. 9::, Rev. Adm. CodeF. As a
matter of administrative polic/, the overtime compensation ma/ be paid, but such pa/ment is discretionar/
(ith the head of the Bureau dependin! upon its current appropriations, so that it cannot be the basis for
holdin! that the functions of said Bureau are (holl/ proprietar/ in character. Anent the additional (or' it
e0ecutes for private persons, (e find that such (or' is done upon re.uest, as distin!uished from those
solicited, and onl/ Das the re.uirements of 7overnment (or' (ill permitD Esec. 4:96, Rev. Adm. CodeF, and
Dupon terms fi0ed b/ the $irector of Printin!, (ith the approval of the $epartment %eadD Esec. 4:99, id.F. As
sho(n b/ the uncontradicted evidence of the petitioners, most of these (or's consist of orders for !reetin!
cards durin! Christmas from !overnment officials, and for printin! of chec's of private ban'in! institutions.
)n those !reetin! cards, the 7overnment seal, of (hich onl/ the Bureau of Printin! is authorized to use, is
embossed, and on the ban' chee's, onl/ the Bureau of Printin! can print the reproduction of the official
documentar/ stamps appearin! thereon. The volume of private +obs done, in comparison (ith !overnment
+obs, is onl/ oneAhalf of 4 per cent, and in computin! the costs for (or' done for private parties, the Bureau
does not include profit because it is not allo(ed to ma'e an/. Clearl/, (hile the Bureau of Printin! is allo(ed
to underta'e private printin! +obs, it cannot be pretended that it is thereb/ an industrial or business concern.
The additional (or' it e0ecutes for private parties is merel/ incidental to its function, and althou!h such
(or' ma/ be deemed proprietar/ in character, there is no sho(in! that the emplo/ees performin! said
proprietar/ function are separate and distinct from those emplo/ed in its !eneral !overnmental functions.
&rom (hat has been stated, it is obvious that the Court of -ndustrial Relations did not ac.uire +urisdiction
over the respondent Bureau of Printin!, and is thus devoid of an/ authorit/ to ta'e co!nizance of the case.
This Court has alread/ held in a lon! line of decisions that the -ndustrial Court has no +urisdiction to hear
and determine the complaint for unfair labor practice filed a!ainst institutions or corporations not or!anized
for profit and, conse.uentl/, not an industrial or business or!anization. This is so because the -ndustrial
Peace Act (as intended to appl/ onl/ to industrial emplo/ment, and to !overn the relations bet(een
emplo/ers en!a!ed in industr/ and occupations for purposes of !ain, and their industrial emplo/ees.
ECniversit/ of the Philippines, et al. vs. C-R, et al., 7.R. No. "A4964:, April 2<, 45:3G Cniversit/ of #to.
Tomas vs. *illanueva, et al., 7.R. No. "A48?6<, )ctober 83, 4595G "a Consolacion Colle!e vs. C-R, 7.R. No.
"A482<2, April 22, 45:3G #ee also the cases cited therein.F .
-ndeed, as an office of the 7overnment, (ithout an/ corporate or +uridical personalit/, the Bureau of Printin!
cannot be sued. E#ec. 4, Rule 8, Rules of CourtF. An/ suit, action or proceedin! a!ainst it, if it (ere to
produce an/ effect, (ould actuall/ be a suit, action or proceedin! a!ainst the 7overnment itself, and the rule
is settled that the 7overnment cannot be sued (ithout its consent, much less over its ob+ection. E#ee Metran
vs. Paredes, 69 )ff. 7az. 2<89G An!at River -rri!ation #/stem, et al. vs. An!at River Bor'ers; Cnion, et. al.,
7.R. Nos. "A43568A66, $ecember 2<, 459?F.
The record also discloses that the instant case arose from the filin! of administrative char!es a!ainst some
officers of the respondent Bureau of Printin! Emplo/ees; Association b/ the Actin! #ecretar/ of 7eneral
#ervices. #aid administrative char!es are for insubordination, !rave misconduct and acts pre+udicial to public
service committed b/ incitin! the emplo/ees, of the Bureau of Printin! to (al' out of their +obs a!ainst the
order of the dul/ constituted officials. Cnder the la(, the %eads of $epartments and Bureaus are authorized
to institute and investi!ate administrative char!es a!ainst errin! subordinates. &or the -ndustrial Court no(
to ta'e co!nizance of the case filed before it, (hich is in effect a revie( of the acts of e0ecutive officials
havin! to do (ith the discipline of !overnment emplo/ees under them, (ould be to interfere (ith the
dischar!e of such functions b/ said officials. B%ERE&)RE, the petition for a (rit of prohibition is !ranted.
The orders complained of are set aside and the complaint for unfair labor practice a!ainst the petitioners is
dismissed, (ith costs a!ainst respondents other than the respondent court.
Beng$on, Bautista +ngelo, "abrador, Paredes and #i$on, ., concur.
Re!es, .B."., ., concurs in the result.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-1A@>? -u%e 30, 19A?
FR#NCSCO S. OLCON, plaintiffAappellee,
vs.
CENTR#L !#N= OF THE PHLPPNES, defendantAappellant.
Bienvenido ". Garcia for plaintiff-appellee.
5at. %. Balboa and (. 8. 8vangelista for defendant-appellant.
REG#L#, J.:
This is an appeal from the decision of the Court of &irst -nstance of Manila, rendered in Case No. 63249, orderin!
the appellant Central Ban' to refund to the herein appellee the sum of P5,?48.56 plus interest, cost and attorne/;s
fees.
The facts !ivin! rise to this suit, as recited in the lo(er court decision and borne b/ the records transmitted to Cs,
are as follo(s1
... . The defendant on March 24, 4592, $ecember 6, 4592, November 29, 4598, and anuar/ 6, 4599, collected
from the plaintiff Eherein appelleeF the amounts of P8,4<:.26, P<63.:9, P2,6<<.5<, and P2,?86.98, under Central
Ban' )fficial Receipts Nos. 36?<59, 3922?5, 654?68, and ::8885, respectivel/, in pa/ment of #pecial E0cise Ta0
on &orei!n E0chan!e coverin! transactions, the details of (hich are described in said receipts, that those amounts,
as admitted b/ the defendant, (ere collected pursuant to its Monetar/ Board Resolution No. 2<:, dated Ma/ 8,
4594 EAns(er to Re.uest for Admission, par. ?FG That on March 43, 459<, plaintiff re.uested the defendant to
refund to him the amounts abovestated, plus the sum of P6:8.96, (hich is supported b/ a statement from the
Philippine National Ban'G subse.uentl/, re.uests (ere made b/ the plaintiff citin! various rulin!s of the #upreme
Court in support thereof but the Central Ban' refused to accede to these re.uests.
The Central Ban' concedes the ille!alit/ of the resolution under (hich it made the lev/. -t e0pressl/ adverts to the
cases of P5B v. 'ulueta, 7.R. No. "A?2?4, Au!ust 83, 459?, 99 ).7. pp. 222A284 and P5B and Central Ban& v.
-nion Boo&s, 3nc. 7.R. No. "A<653, Au!ust 83, 459? and sa/s that Dthere (as no lon!er an/ necessit/ for this
%onorable Court Ethe lo(er courtF to declare Monetar/ Board Resolution No. 2<: dated Ma/ 8, 4594, as ille!al.
There is no dispute about this.D
$espite the above admission, ho(ever, the Ban' still refused to !rant the refund on the !round that the claim for
the same had alread/ prescribed. -t vi!orousl/ ar!ued the theor/ that Dfor purposes of recoverin! a ta0 paid
ille!all/ or erroneousl/ ..., the action should be filed (ithin five E9F /ears, from the date of pa/ment of the ta0.D -t
arrived at the said period on the reasonin! that since the ta0 code does not provide for the same, the deficienc/
should be !overned b/ Article 4465 of the Civil Code (hich sa/s1
All other actions (hose periods are not fi0ed in this Code or in other la(s must be brou!ht (ithin five /ears from
the time the ri!ht b/ action accrues.
After the dispute (as tried in the lo(er court, the trial +ud!e re+ected the appellant;s theor/ and ruled that the
prescriptive period (as ten E43F /ears, holdin! that the obli!ation to refund (as one created b/ la( and (hich,
therefore, under Article 4466 of the Civil Code, prescribed in ten /ears. %ence, this appeal.
$urin! the pendenc/ of the appeal, ho(ever, this Court handed do(n its decision in the case of Belman Cia, 3nc. v.
Central Ban&, 7.R. No. "A49366, Ma/ 83, 45:3, e0pressl/ rulin! Ein the Resolution to a Motion for reconsideration
filed thereto b/ the same Central Ban' hereinF that the prescriptive period is si0 E:F /ears.
PlaintiffAappellee has filed a motion for reconsideration ar!uin! that this action (as still timel/ because, it is
ar!ued, the period of prescription applicable to the case is ten E43F /ears from date of pa/ment. To support this
contention, Article 4466, para!raph E2F is cited, (hich provides1
DART. 4466. The follo(in! actions must be brou!ht (ithin ten /ears from the time the ri!ht of action accrues1
E4F ...
E2F Cpon an obli!ation created b/ la(.
since, it is claimed, the pa/ment here (as made b/ reason of a mista'e in the interpretation of Republic Act :34,
the obli!ation to return arises b/ virtue of Article 2499, in relation to Article 2496 of the Ne( Civil Code and is,
therefore, one created b/ la(.
MovantAappellee is partl/ correct. %o(ever, Articles 2496 and 2499 relied upon, specificall/ refer to obli!ations of
the nature of solutio indebiti (hich are e0press(a/ classified as .uasiAcontracts under #ection 2, Chapter - of Title
>*-- )f the Ne( Civil Code. Conse.uentl/, the la( re!ardin! prescription applicable to the action herein involved is
not Article 4466 E2F cited b/ the movant, but Article 4469 E2F of the Ne( Civil Code providin!1
E4F DART. 4469. The follo(in! actions mu! be commenced (ithin si0 /ears1
E2F ...
E8F Cpon a .uasiAcontract.D
-n vie( of the rulin! in the aboveAmentioned the Central Ban' filed a memorandum concedin! the refundabilit/ of
all the claims e0cept for the amount of P68:.96. The Ban' claims that Dthere is no (a/ to determine (hether the
action for refund of this amount has alread/ prescribed or notD as the papers necessar/ for its proper processin!
(ere no lon!er available or have been lost. &urther more, ho(ever, of the claims it concedes to have been filed
(ithin the prescriptive period and of (hich it accepts the obli!ation to refund, the Ban' asserts Dshould be
refundedD onl/ Dupon presentation of satisfactor/ proof.D
Be do not understand +ust (hat e0actl/ the appellant Ban' means b/ the Dpresentation of satisfactor/ proof.D -t
admits it received from the appellee the of P5,?48.56.
)n various dates and under Central Ban' )fficial receipts hereunder indicated, plaintiffAappellee paid as 4?@
special e0cise ta0 throu!h the Philippine National Ban', in settlement of various collection bills, due to forei!n
suppliers from plaintiffAappellee the total sum of P5,?48.56, itemized as follo(s1 E#tatement of &acts, Appellant;s
Brief, p. 9.F EEmphasis suppliedF
-t li'e(ise admits that the Monetar/ Board Resolution on the authorit/ of (hich it e0acted the said amount is
ille!al.
Be respectfull/ contend that there (as no lon!er an/ necessit/ for this %onorable Court Ethe lo(er courtF to
declare Monetar/ Board Res. 2<: dated Ma/ 8, 4594, as ille!al. There is no dispute about this. No alle!ation can be
found in defendant;s pleadin!s EAns(er to Re.uest for Admission, and Ans(er to -nterro!atoriesF to the effect that
defendant still upholds the validit/ of said resolution. ... Epp. 285A263, Record on AppealF
"astl/, it admits its obli!ation to refund as (ell as the timeliness of the claim of the same.
As sho(n b/ the letter of the Philippine National Ban' to the "e!al Counsel of the Central Ban' dated une 49,
4595, the remittances of the forei!n e0chan!e involved in the collection bills (ith respect to the seven items (ere
made on various dates bet(een Au!ust 28, 4565 and November 2<, 4565. 3f the dollar proceeds for the account of
(rancisco Oli$on /ere all in :@A@, before the effectivit! of the special excise tax la/EMarch 2<, 4594F, therefore,
the assessment and collection of the exchange taxes in 2uestion /ere erroneous and illegal . -n accordance (ith
Arts. 2496 and 2499 of the ne( Civil Code of the Philippines,there /ould be an obligation on the part of defendant
Central Ban& to refund the said amounts received b! reason of a mista&e in the construction or application of a
doubtful 2uestion of la/ Ep. :, Memorandum in lieu of )ral Ar!ument.F
3t has been verified from the (oreign #epartment, Philippine 5ational Ban&, that all foreign exchange >-.S. dollars?
involved in said collection bills /ere remitted to the -nited States on the various dates bet/een +ugust BC, :@A@
and 5ovember BC, :@A@, before %arch BC, :@D:, /hen the 8xchange 0ax "a/ too& effect. Epp. E-F, Statement of
(acts, +ppellant*s BriefF. EEmphasis in the above t(o para!raphs supplied.F
-n the face of all these admissions, Be do not see (hat else needs be proved. This case (as submitted on the issue
of prescription the appellant contendin! that the period (as five E9F /ears. -t no( admits its error and accepts the
correct period to be si0 /ears. Therefore, insofar as this suit is concerned, the in.uir/ need not !o be/ond
determinin! (hether the claim, for refund (as filed (ithin the si0A/ear period or not. And, since the Ban' e0plicitl/
and une.uivocabl/ confirms that the claims (ere made (ithin that time, it ou!ht not be too technical, but, on the
contrar/, it should earnestl/ endeavor to remove or overcome the minor technicalities that mi!ht stand in the (a/
of a prompt refund.
-t is ne0t ur!ed that inasmuch as the amounts here involved have alread/ been turned over to the national
treasur/ the present action ma/ no lon!er be maintained since it (ould, in effect, be a suit a!ainst the #tate
(ithout its consent.:G/ph<:.,Ht
Be cannot a!ree to the proposition. This suit is brou!ht a!ainst the Central Ban' of the Philippines, an entit/
authorized b/ its charter to sue and be sued. The consent of the #tate to thus be sued, therefore, has been !iven.
As Be said in the case of Central +$ucarera San Pedro v. Central Ban&, 7.R. No. "A??48, #eptember 25, 459<, in
suits for refund, Dbein! a corporation that ma/ sue and be sued, the Central Ban' is the proper part/ defendant
pursuant to section 9 of Republic Act No. :34, (hich provides that Dthe refund of ta0es pursuant to sections t(o
and three of this Act shall be made b/ the Central Ban' of the Philippines.D
-n the memorandum submitted in lieu of oral ar!ument, the appellant Ban' represented for the first time that the
plaintiffAappellee has an outstandin! liabilit/ of P6,5:8.:2 b/ (a/ of unpaid 4?@ special e0cise ta0 on the
remittance of forei!n e0chan!e to import cotton !oods and !ladiolus bulbs.D -t then ur!ed that (hatever term this
Court should order to be refunded should be set off a!ainst the said Doutstandin! liabilit/D of the appellee.
The representation impresses Cs as untenable. The matter of appellee;s outstandin! unpaid accounts (ith the Ban'
is a fit sub+ect for a counterAclaim and the Rules of Court provide for the manner b/ (hich the/ ma/ be impleaded
or raised in this suit. These rules (ere devised not onl/ to provide a more ade.uate and elastic procedure for the
prompt dispatch of liti!ation, but more importantl/, to full/ protect the ri!hts of the parties. *eril/, therefore, the
public polic/ involved in the observance of those rules should not be li!htl/ estimated. Bithin the perspective of the
fore!oin! discussion therefore, it (ould seem that the appellant has not onl/ (ithheld proper deference for the
rulesG it has been unfair to the appellee as (ell. &or in raisin! a counterclaim at so late a sta!e in the proceedin! as
the period for oral ar!ument, it denies to the appellee full and complete protection of his ri!hts since b/ then the
proceedin!s in the court have practicall/ terminated and the appellee (ould hardl/ have time to e0plain or defend
himself from the countersuit.
-N *-EB )& A"" T%E &)RE7)-N7, the +ud!ment appealed from and the a(ards made thereunder are hereb/
affirmed. Costs a!ainst the appellant.
Beng$on, C.., Padilla, Bautista +ngelo, Concepcion, Re!es, .B."., Paredes and %a&alintal, ., concur.
"abrador, Barrera and #i$on, ., too& no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-9990 Se5'e7ber 30, 19@7
ENR3UE -. L. RUC a%& -OSE ;. HERRER#, +% '(e+r be(a1. a%& a* 7+%or+'y *'o/9(o1&er* o. '(e
#11+e& Te/(%o1o,+*'*, %/., plaintiffsAappellants,
vs.
HON. SOTERO !. C#!#HUG, Se/re'ary o. Na'+o%a1 )e.e%*e, Co1. NCOL#S -MENEC, Hea& o. '(e
E%,+%eer Grou5, O..+/e o. '(e Se/re'ary o. Na'+o%a1 )e.e%*e, THE FN#NCE OFFCER o. '(e
)e5ar'7e%' o. Na'+o%a1 )e.e%*e, '(e #U)TOR o. '(e )e5ar'7e%' o. '(e Na'+o%a1 )e.e%*e, P#!LO
). P#NLLO a%& #LLE) TECHNOLOGSTS NC., defendantsAappellees.
#io&no and Sison for appellants.
". #. Panlilio for appellee Pablo Panlilio.
%anuel Sales for defendant +llied 0echnologists, 3nc.
Office of the Solicitor General +mbrocio Padilla and +ssistant Solicitor ose G. Bautista for appellees 7on.
Sotero Cabahug and Col. 5icolas imene$, et al.
L#!R#)OR, J.:
Appeal from a +ud!ment of the Court of &irst -nstance of Manila dismissin! plaintiffs; amended complaint.
The facts upon (hich plaintiffs; first cause of action are based are allo(ed as follo(s1
)n ul/ 84, 4593 the #ecretar/ of National $efense accepted the bid of the Allied Technolo!ists, -nc., to furnish the
architectural and en!ineerin! services in the construction of the *eterans %ospital at a price of P832,?33. The
plans, specifications, s'etches and detailed dra(in!s and other architectural re.uirements submitted b/ the Allied
Technolo!ists throu!h thereof its architects, Messrs. Enri.ue . ". Ruiz, ose *. %errera and Pablo $. Panlilio (ere
approved b/ the Cnited #tates *eterans Administration in Bashin!ton, $.C. Because of the technical ob+ection to
the capacit/ of the Allied Technolo!ists, -nc. to practice architecture and upon the advice of the #ecretar/ of
ustice, the contract (as si!ned on the part of the Allied Technolo!ists, -nc. b/ E..". Ruiz as President and P.$.
Panlilio as Architect. Bhen the defendantsAofficials paid the Allied Technolo!ists the contract price for the
architectural en!ineerin! service, the/ retained 49 per cent of the sum due, for the reason that defendant Panlilio
has asserted that he is the sole and onl/ architect of the *eterans %ospital to the e0clusion of plaintiffs Ruiz and
%errera, assertion aided and abetted b/ defendant imenez. Cnless defendants are prevented from reco!nizin!
defendant Panlilio as the sole architect of the contract and from pa/in! the 49 per cent retained, plaintiffs (ill be
deprived of the monetar/ value of their professional services and their professional presti!e and standin! (ould be
seriousl/ impaired.
Cnder the second cause of action the follo(in! facts are alle!ed1 Cnder Title -- of the contract entered into
bet(een plaintiffs and the #ecretar/ of National $efense, at an/ time prior to si0 months after completion and
acceptance of the (or' under Title -, the 7overnment ma/ direct the Allied Technolo!ists, -nc. to perform the
services specified in said Title --. But not(ithstandin! such completion or acceptance, the 7overnment has refused
to direct the plaintiffs to perform the (or', entrustin! such (or' to a !roup of ine0perienced and un.ualified
en!ineers.
The pra/er based on the first cause of action is that defendants desist from reco!nizin! Panlilio as the sole and onl/
architect of the *eterans %ospital and from pa/in! him 49 per cent retained as above indicated, and that after
hearin! Ruiz, %errera and Panlilio be reco!nized as the architects of the *eterans %ospital. Cnder the second cause
of action it is pra/ed that the defendants be directed to turn over the supervision called for b/ Title -- of the
contract.
The court a 2uo dismissed the complaint on the !round that the suit involved is one a!ainst the 7overnment, (hich
ma/ not sued (ithout its consent. -t is held that as the ma+orit/ of the stoc'holders of the Allied Technolo!ists, -nc.
have not +oined in the action, the minorit/ suit does not lie. -t dismissed the second cause of action on the !round
that the optional services under Title -- have alread/ been performed.
)n this appeal the plaintiffs assi!n the follo(in! errors1
-
T%E ")BER C)CRT ERRE$ -N RC"-N7 T%AT T%E PRE#ENT #C-T -# )NE A7A-N#T T%E 7)*ERNMENT AN$
T%ERE&)RE CANN)T BE *A"-$"I ENTERTA-NE$ BECAC#E T%E 7)*ERNMENT CANN)T BE #CE$ B-T%)CT -T#
C)N#ENT.
--
T%E ")BER C)CRT ERRE$ -N %)"$-N7 T%AT T%E PR)*-#-)N# )& ACT 838<, A# AMEN$E$ BI C)MM)NBEA"T%
ACT 82? ARE APP"-CAB"E T) T%-# CA#EG -T ERRE$ -N %)"$-N7 T%AT P"A-NT-&&#; C"A-M #%)C"$ %A*E BEEN
&-"E$ B-T% T%E AC$-T)R 7ENERA".
---
T%E ")BER C)CRT ERRE$ -N RC"-N7 T%AT T%E M-N)R-TI #C-T -# CNTENAB"E.
-*
T%E ")BER C)CRT ERRE$ -N $-#M-##-N7 T%E AMEN$E$ C)MP"A-NT -NCNCT-)N.
Evidentl/, the plaintiffsAappellants do not .uestion the dismissal of the second cause of action. #o, the appeal has
relation to the first cause of action onl/.
A careful stud/ of the alle!ations made in the amended complaint discloses the follo(in! facts and circumstances1
The contract price for the architectural en!ineerin! services rendered b/ the Allied Technolo!ists, -nc. and the
plaintiffs is P284,:33. All of that sum has been set aside for pa/ment to the Allied Technolo!ists, -nc. and its
architects, e0cept the sum of P86,?63, representin! 49 per cent of the total costs, (hich has been retained b/ the
defendantsAofficials. -nsofar as the 7overnment of the Philippines is concerned, the full amount of the contract
price has been set aside and said full amount authorized to be paid. The 7overnment does not an/ lon!er have an/
interest in the amount, (hich the defendantsAofficials have retained and have refused to pa/ to the plaintiffs, or to
the person or entit/ to (hich it should be paid. And the plaintiffs do not see' to sue the 7overnment to re.uire it to
pa/ the amount or involve it in the liti!ation. The defendant imenez is claimed to have Daided and abetted
defendant Panlilio in deprivin! the Allied Technolo!ists, -nc. and its t(o architects ERuiz and %erreraF of the honor
and benefit due to them under the contract Anne0 SCS thereof.D -t is further claimed b/ plaintiffs that the
defendantAofficials are about to reco!nize Panlilio as the sole architect and are about to pa/ him the 49 per cent
(hich the/ had retained, and thus deprive plaintiffs of their ri!ht to share therein and in the honor conse.uent to
the reco!nition of their ri!ht. The suit, therefore, is properl/ directed a!ainst the officials and a!ainst them alone,
not a!ainst the 7overnment, (hich does nor have an/ interest in the outcome of the controvers/ bet(een plaintiffs
on the one hand, and Panlilio on the other. The suit is bet(een these alone, to determine (ho is entitled to the
amount retained b/ the officialsG and if the latter did aid and abet Panlilio in his pretense, to the e0clusion and
pre+udice of plaintiffs, it is natural that the/ alone, and not the 7overnment, should be the sub+ect of the suit. %e
said officials chosen not to ta'e sides in the controvers/ bet(een the architects, and had disclaimed interest in said
controvers/, the suit (ould have been converted into one of interpleader. But the/ have acted to favor one side,
and have abetted him in his effort to obtain pa/ment to him of the sum remainin! unpaid and credit for the (or',
to the e0clusion of the plaintiffs. %ence, the suit.:;/ph<l.n=t
Be are not (antin! in authorit/ to sustain the vie( that the #tate need not be a part/ in this and parallel cases.
There is no proposition of la( (hich is better settled than the !eneral rule that a soverei!n state and its political
subdivision cannot be sued in the courts e0cept upon the statutor/ consent of the state. Numerous decisions of this
court to that effect ma/ be citedG but it is enou!h to note that this court, in banc in a recent case, #tate vs.
Boodruff EMiss.F, 493 #o. ?:3, %asso heldG and therein overruled a previous decision (hich had ad+udicated that
such consent could be (or'ed out of a statute b/ implication, (hen e0press consent (as absent from the terms of
that statute.
But the rule applies onl/ (hen the state or its subdivision is actuall/ made a part/ upon the record, or is actuall/
necessar/ to be made a part/ in order to furnish the relief demanded b/ the suit. -t does not appl/ (hen the suit is
a!ainst an officer or a!ent of the state, and the relief demanded b/ the suit re.uires no affirmative dischar!e of
an/ obli!ation (hich belon!s to the state in its political capacit/, even thou!h the officers or a!ents (ho are made
defendants disclaim an/ personal interest in themselves and claim to hold or to act onl/ b/ virtue of a title of the
state and as its a!ents and servants.
Thus it (ill be found, as illustrative of (hat has been above said, that nearl/ all the cases (herein the rule of
immunit/ from suit a!ainst the state or a subdivision thereof, has been applied and upheld, are those (hich
demanded a mone/ +ud!ment, and (herein the dischar!e of the +ud!ment, if obtained, (ould re.uire the
appropriation or an e0penditure therefrom, (hich bein! le!islative in its character is a province e0clusivel/ of the
political departments of the state. And in the less fre.uent number of cases (here no mone/ +ud!ment is
demanded, and the rule of immunit/ is still upheld, it (ill be found in them that the relief demanded (ould be,
nevertheless, to re.uire of the state or its political subdivision the affirmative performance of some asserted
obli!ation, belon! to the state in its political capacit/.
Bhen, therefore, officers or a!ents of the state, althou!h actin! officiall/ and not as individuals, seize the private
propert/ of a citizen, the state havin! no valid ri!ht or title thereto, or trespass upon that propert/ or dama!e it,
the +urisdiction of the courts to e+ect the officers or a!ents, is as (ell settled in the +urisprudence of this countr/ as
is the !eneral rule first above mentionedG for in such a suit no relief is demanded (hich re.uires an/ affirmative
action on the part of the state. #uch a suit is onl/ to the end that the officers and a!ents of the state sta/ off the
propert/ of the citizen and cease to dama!e that propert/, the state havin! no ri!ht or title thereto.D E#tate Mineral
"ease Commission vs. "a(rence N4586O, 49? #o. <5?, <5<A<55.F.
Be hold that under the facts and circumstances alle!ed in the amendment complaint, (hich should be ta'en on its
face value, the suit is not one a!ainst the 7overnment, or a claim a!ainst it, but one a!ainst the officials to compel
them to act in accordance (ith the ri!hts to be established b/ the contendin! architects, or to prevent them from
ma'in! pa/ment and reco!nition until the contendin! architects have established their respective ri!hts and
interests in the funds retained and in the credit for the (or' done. The order of dismissal is hereb/ reversed and
set aside, and the case is remanded to the court a 2uo for further proceedin!s. Bith costs a!ainst the defendantsA
appellees.:;/ph<l.n=t
Beng$on, Paras, C.., %ontema!or, Re!es, +., Bautista +ngelo, Concepcion, Re!es, .B."., 8ndencia and (elix, .,
concur.
Republic of the Philippines
SUPREME COURT
Manila
#EC)N$ $-*-#-)N
G.R. No. 11@A3? #5r+1 >7, >000
FELPE C#LU! a%& RC#R)O ;#LENC#, )EP#RTMENT o. EN;RONMENT a%& N#TUR#L
RESOURCES 4)ENR6, C#T!#LOG#N, S#M#R, petitioners,
vs.
COURT OF #PPE#LS, M#NUEL# T. !#!#LCON, a%& CONST#NCO #!UG#N)#, respondents.
3USUM!NG, J.:
&or revie( is the decision
4
dated Ma/ 2?, 4556, of the Court of Appeals in CAA7.R. #P No. 25454, den/in!
the petition filed b/ herein petitioners for certiorari, prohibition and mandamus, in order to annul the )rder
dated Ma/ 2?, 4552, b/ the Re!ional Trial Court of Catbalo!an, #amar. #aid )rder had denied petitioners; EaF
Motion to $ismiss the replevin case filed b/ herein private respondents, as (ell as EbF petitioners Motion for
Reconsideration of the )rder of said trial court dated April 26, 4552, !rantin! an application for a Brit of
replevin.
2
The pertinent facts of the case, borne b/ the records, are as follo(s1
)n anuar/ 2<, 4552, the &orest Protection and "a( Enforcement Team of the Communit/ Environment and
Natural Resources )ffice ECENR)F of the $ENR apprehended t(o E2F motor vehicles, described as follo(s1
4. Motor *ehicle (ith Plate No. %AKA?88 loaded (ith one thousand and t(ent/ si0 E4,32:F board feet of
ille!all/ sourced lumber valued at P<,966.?9, bein! driven b/ one Pio 7abon and o(ned b/ Na certainO ose
*ar!as.
2. Motor *ehicle (ith Plate No. &CNA468 loaded (ith one thousand t(o hundred t(ent/ four and ninet/
seven E4,226.5?F board feet of ille!all/Asourced lumber valued at P5,4<?.2?, bein! driven b/ one Constancio
Abu!anda and o(ned b/ Na certainO Manuela Babalcon. . . .
8
Constancio Abu!anda and Pio 7abon, the drivers of the vehicles, failed to present proper documents andLor
licenses. Thus, the apprehendin! team seized and impounded the vehicles and its load of lumber at the
$ENRAPENR E$epartment of Environment and Natural ResourcesAProvincial Environment and Natural
ResourcesF )ffice in Catbalo!an.
6
#eizure receipts (ere issued but the drivers refused to accept the
receipts.
9
&elipe Calub, Provincial Environment and Natural Resources )fficer, then filed before the Provincial
Prosecutor;s )ffice in #amar, a criminal complaint a!ainst Abu!anda, in Criminal Case No. 8?59, for violation
of #ection :< N?<O, Presidential $ecree ?39 as amended b/ E0ecutive )rder 2??, other(ise 'no(n as the
Revised &orestr/ Code.
:
)n anuar/ 84, 4552, the impounded vehicles (ere forcibl/ ta'en b/ 7abon and Abu!anda from the custod/
of the $ENR, promptin! $ENR )fficer Calub this time to file a criminal complaint for !rave coercion a!ainst
7abon and Abu!anda. The complaint (as, ho(ever, dismissed b/ the Public Prosecutor.
?
)n &ebruar/ 44, 4552, one of the t(o vehicles, (ith plate number &CN 468, (as a!ain apprehended b/ a
composite team of $ENRACENR in Catbalo!an and Philippine Arm/ elements of the <32nd -nfantr/ Bri!ade at
Baran!a/ Bura/, Paranas, #amar. -t (as a!ain loaded (ith forest products (ith an e.uivalent volume of
4,339.6? board feet, valued at P43,396.?3. Calub dul/ filed a criminal complaint a!ainst Constancio
Abu!anda, a certain Abe!onia, and several ohn $oes, in Criminal Case No. 8:29, for violation of #ection :<
N?<O, Presidential $ecree ?39 as amended b/ E0ecutive )rder 2??, other(ise 'no(n as the Revised &orestr/
Code.
<
-n Criminal Cases Nos. 8?59 and 8:29, ho(ever, Abe!onia and Abu!anda (ere ac.uitted on the !round of
reasonable doubt. But note the trial court ordered that a cop/ of the decision be furnished the #ecretar/ of
ustice, in order that the necessar/ criminal action ma/ be filed a!ainst Noe Pa!arao and all other persons
responsible for violation of the Revised &orestr/ Code. &or it appeared that it (as Pa!arao (ho chartered the
sub+ect vehicle and ordered that cut timber be loaded on it.
5
#ubse.uentl/, herein private respondents Manuela Babalcon, the vehicle o(ner, and Constancio Abu!anda,
the driver, filed a complaint for the recover/ of possession of the t(o E2F impounded vehicles (ith an
application for replevin a!ainst herein petitioners before the RTC of Catbalo!an. The trial court !ranted the
application for replevin and issued the correspondin! (rit in an )rder dated April 26, 4552.
43
Petitioners
filed a motion to dismiss (hich (as denied b/ the trial court.
44
Thus, on une 49, 4552, petitioners filed (ith the #upreme Court the present Petition for Certiorari,
Prohibition and%andamus (ith application for Preliminar/ -n+unction andLor a Temporar/ Restrainin! )rder.
The Court issued a TR), en+oinin! respondent RTC +ud!e from conductin! further proceedin!s in the civil
case for replevinG and en+oinin! private respondents from ta'in! or attemptin! to ta'e the motor vehicles
and forest products seized from the custod/ of the petitioners. The Court further instructed the petitioners to
see to it that the motor vehicles and other forest products seized are 'ept in a secured place and protected
from deterioration, said propert/ bein! incustodia legis and sub+ect to the direct order of the #upreme Court.
42
-n a Resolution issued on #eptember 2<, 4552, the Court referred said petition to respondent appellate
court for appropriate disposition.
48
)n Ma/ 2?, 4556, the Court of Appeals denied said petition for lac' of merit. -t ruled that the mere seizure
of a motor vehicle pursuant to the authorit/ !ranted b/ #ection :< N?<O of P.$. No. ?39 as amended b/ E.).
No. 2?? does not automaticall/ place said conve/ance in custodia legis. Accordin! to the appellate court,
such authorit/ of the $epartment %ead of the $ENR or his dul/ authorized representative to order the
confiscation and disposition of ille!all/ obtained forest products and the conve/ance used for that purpose is
not absolute and un.ualified. -t is sub+ect to pertinent la(s, re!ulations, or policies on that matter, added the
appellate court. The $ENR Administrative )rder No. 95, series of 4553, is one such re!ulation, the appellate
court said. &or it prescribes the !uidelines in the confiscation, forfeiture and disposition of conve/ances used
in the commission of offenses penalized under #ection :< N?<O of P.$. No. ?39 as amended b/ E.). No. 2??.
46
Additionall/, respondent Court of Appeals noted that the petitioners failed to observe the procedure outlined
in $ENR Administrative )rder No. 95, series of 4553. The/ (ere unable to submit a report of the seizure to
the $ENR #ecretar/, to !ive a (ritten notice to the o(ner of the vehicle, and to render a report of their
findin!s and recommendations to the #ecretar/. Moreover, petitioners; failure to compl/ (ith the procedure
laid do(n b/ $ENR Administrative )rder No. 95, series of 4553, (as confirmed b/ the admission of
petitioners; counsel that no confiscation order has been issued prior to the seizure of the vehicle and the
filin! of the replevin suit. Therefore, in failin! to follo( such procedure, accordin! to the appellate court, the
sub+ect vehicles could not be considered in custodia legis.
49
Respondent Court of Appeals also found no merit in petitioners; claim that private respondents; complaint for
replevin is a suit a!ainst the #tate. Accordin!l/, petitioners could not shield themselves under the principle of
state immunit/ as the propert/ sou!ht to be recovered in the instant suit had not /et been la(full/ ad+ud!ed
forfeited in favor of the !overnment. Moreover, accordin! to respondent appellate court, there could be no
pecuniar/ liabilit/ nor loss of propert/ that could ensue a!ainst the !overnment. -t reasoned that a suit
a!ainst a public officer (ho acted ille!all/ or be/ond the scope of his authorit/ could not be considered a suit
a!ainst the #tateG and that a public officer mi!ht be sued for ille!all/ seizin! or (ithholdin! the possession of
the propert/ of another.
4:
Respondent court brushed aside other !rounds raised b/ petitioners based on the claim that the sub+ect
vehicles (ere validl/ seized and held in custod/ because the/ (ere contradicted b/ its o(n findin!s.
4?
Their
petition (as found (ithout merit.
4<
No(, before us, the petitioners assi!n the follo(in! errors1
45
E4F T%E C)CRT )& APPEA"# ERRE$ -N %)"$-N7 T%AT MERE #E-RCRE )& A C)N*EIANCE PCR#CANT T)
#ECT-)N :<AA N?<AAO )& P.$. N). ?39 A# AMEN$E$ BI E>ECCT-*E )R$ER 2?? $)E# N)T P"ACE #A-$
C)N*EIANCE -N C-S0O#3+ "8G3SI
E2F T%E C)CRT )& APPEA"# ERRE$ -N N)T %)"$-N7 T%AT T%E )PERAT-*E ACT 7-*-N7 R-#E &)R T%E
#CBECT C)N*EIANCE T) BE -N C-S0O#3+ "8G3S -# -T# "AB&C" #E-RCRE BI T%E $ENR PCR#CANT T)
#ECT-)N :<AA N?<AAO )& P.$. N). ?39, A# AMEN$E$ BI E.). N). 2??G AN$
E8F T%E C)CRT )& APPEA"# ERRE$ -N %)"$-N7 T%AT T%E C)MP"A-NT &)R REP"E*-N A7A-N#T T%E
PET-T-)NER# -# N)T A #C-T A7A-N#T T%E #TATE.
-n brief, the pertinent issues for our consideration are1
E4F Bhether or not the $ENRAseized motor vehicle, (ith plate number &CN 468, is in custodia legis.
E2F Bhether or not the complaint for the recover/ of possession of impounded vehicles, (ith an application
for replevin, is a suit a!ainst the #tate.
Be (ill no( resolve both issues.
The Revised &orestr/ Code authorizes the $ENR to seize all conve/ances used in the commission of an
offense in violation of #ection ?<. #ection ?< states1
#ec. ?<. Cutting, Gathering, andJor Collecting 0imber, or Other (orest Products /ithout "icense. H An/
person (ho shall cut, !ather, collect, remove timber or other forest products from an/ forestland, or timber
from alienable or disposable public land, or from private land, (ithout an/ authorit/, or possess timber or
other forest products (ithout the le!al documents as re.uired under e0istin! forest la(s and re!ulations,
shall be punished (ith the penalties imposed under Articles 835 and 843 of the Revised Penal Code. . .
The Court shall further order the confiscation in favor of the !overnment of the timber or an/ forest products
cut, !athered, collected, removed, or possessed, as (ell as the machiner/, e.uipment, implements and tools
ille!all/ used in the area (here the timber or forest products are found.
This provision ma'es mere possession of timber or other forest products (ithout the accompan/in! le!al
documents unla(ful and punishable (ith the penalties imposed for the crime of theft, as prescribed in
Articles 835A843 of the Revised Penal Code. -n the present case, the sub+ect vehicles (ere loaded (ith forest
products at the time of the seizure. But admittedl/ no permit evidencin! authorit/ to possess and transport
said load of forest products (as dul/ presented. These products, in turn, (ere deemed ille!all/ sourced.
Thus there (as a prima facie violation of #ection :< N?<O of the Revised &orestr/ Code, althou!h as found b/
the trial court, the persons responsible for said violation (ere not the ones char!ed b/ the public prosecutor.
The correspondin! authorit/ of the $ENR to seize all conve/ances used in the commission of an offense in
violation of #ection ?< of the Revised &orestr/ Code is pursuant to #ections ?<AA and <5 of the same Code.
The/ read as follo(s1
#ec. ?<AA. +dministrative +uthorit! of the #epartment 7ead or 7is #ul! +uthori$ed Representative to Order
Confiscation. H -n all cases of violation of this Code or other forest la(s, rules and re!ulations, the
$epartment %ead or his dul/ authorized representative, ma/ order the confiscation of an/ forest products
ille!all/ cut, !athered, removed, or possessed or abandoned, and all conve/ances used either b/ land, (ater
or air in the commission of the offense and to dispose of the same in accordance (ith pertinent la(s,
re!ulations or policies on the matter.
#ec. <5. +rrestG 3nstitution of criminal actions. H A forest officer or emplo/ee of the Bureau N$epartmentO or
an/ personnel of the Philippine Constabular/LPhilippine National Police shall arrest even (ithout (arrant an/
person (ho has committed or is committin! in his presence an/ of the offenses defined in this Chapter. %e
shall also seize and confiscate, in favor of the 7overnment, the tools and e.uipment used in committin! the
offense. . . NEmphasis supplied.O
Note that $ENR Administrative )rder No. 95, series of 4553, implements #ections ?<AA and <5 of the
&orestr/ Code, as follo(s1
#ec. 2. Conve!ances Sub6ect to Confiscation and (orfeiture. H All conve/ances used in the transport of an/
forest product obtained or !athered ille!all/ (hether or not covered (ith transport documents, found
spurious or irre!ular in accordance (ith #ec. :<AA N?<AAO of P.$. No. ?39, shall be confiscated in favor of the
!overnment or disposed of in accordance (ith pertinent la(s, re!ulations or policies on the matter.
#ec. 6. 4ho are +uthori$ed to Sei$e Conve!ance. H The #ecretar/ or his dul/ authorized representative
such as the forest officers andLor natural resources officers, or deputized officers of the $ENR areauthori$ed
to sei$e said conve/ances sub+ect to policies and !uidelines pertinent thereto. $eputized militar/ personnel
and officials of other a!encies apprehendin! ille!al lo!s and other forest products and their conve/ances
shall notif/ the nearest $ENR field offices, and turn oversaid forest products and conve/ances for proper
action and disposition. -n case (here the apprehension is made b/ $ENR field officer, the conve/ance shall
be deposited (ith the nearest CENR)LPENR)LRE$ )ffice as the case ma/ be, for safe'eepin! (herever it is
most convenient and secured. NEmphasis supplied.O
Cpon apprehension of the ille!all/Acut timber (hile bein! transported (ithout pertinent documents that
could evidence title to or ri!ht to possession of said timber, a (arrantless seizure of the involved vehicles and
their load (as allo(ed under #ection ?< and <5 of the Revised &orestr/ Code.
Note further that petitioners; failure to observe the procedure outlined in $ENR Administrative )rder No. 95,
series of 4553 (as +ustifiabl/ e0plained. Petitioners did not submit a report of the seizure to the #ecretar/
nor !ive a (ritten notice to the o(ner of the vehicle because on the 8rd da/ follo(in! the seizure, 7abon
and Abu!anda, drivers of the seized vehicles, forcibl/ too' the impounded vehicles from the custod/ of the
$ENR. Then a!ain, (hen one of the motor vehicles (as apprehended and impounded for the second time,
the petitioners, a!ain (ere not able to report the seizure to the $ENR #ecretar/ nor !ive a (ritten notice to
the o(ner of the vehicle because private respondents immediatel/ (ent to court and applied for a (rit of
replevin. The seizure of the vehicles and their load (as done upon their apprehension for a violation of the
Revised &orestr/ Code. -t (ould be absurd to re.uire a confiscation order or notice and hearin! before said
seizure could be effected under the circumstances.
#ince there (as a violation of the Revised &orestr/ Code and the seizure (as in accordance (ith la(, in our
vie( the sub+ect vehicles (ere validl/ deemed in custodia legis. -t could not be sub+ect to an action for
replevin. &or it is propert/ la(full/ ta'en b/ virtue of le!al process and considered in the custod/ of the la(,
and not other(ise.
23
-n %amanteo, et. al. v. #eput! Sheriff %agumun, A.M. No. PA5<A42:6, promul!ated on ul/ 2<, 4555, the
case involves propert/ to be seized b/ a $eput/ #heriff in a replevin suit. But said propert/ (ere alread/
impounded b/ the $ENR due to violation of forestr/ la(s and, in fact, alread/ forfeited in favor of the
!overnment b/ order of the $ENR. Be said that such propert/ (as deemed in custodia legis. The sheriff
could not insist on seizin! the propert/ alread/ sub+ect of a prior (arrant of seizure. The appropriate action
should be for the sheriff to inform the trial court of the situation b/ (a/ of partial #heriff;s Return, and (ait
for the +ud!e;s instructions on the proper procedure to be observed.
Note that propert/ that is validl/ deposited in custodia legis cannot be the sub+ect of a replevin suit. -n
%amanteo v. #eput! Sheriff %agumun, (e elucidated further1
. . . the (rit of replevin has been repeatedl/ used b/ unscrupulous plaintiffs to retrieve their chattel earlier
ta'en for violation of the Tariff and Customs Code, ta0 assessment, attachment or e0ecution. )fficers of the
court, from the presidin! +ud!e to the sheriff, are implored to be vi!ilant in their e0ecution of the la(
other(ise, as in this case, valid seizure and forfeiture proceedin!s could easil/ be undermined b/ the simple
devise of a (rit of replevin. . .
24
)n the second issue, is the complaint for the recover/ of possession of the t(o impounded vehicles, (ith an
application for replevin, a suit a!ainst the #tateJ
Bell established is the doctrine that the #tate ma/ not be sued (ithout its consent.
22
And a suit a!ainst a
public officer for his official acts is, in effect, a suit a!ainst the #tate if its purpose is to hold the #tate
ultimatel/ liable.
28
%o(ever, the protection afforded to public officers b/ this doctrine !enerall/ applies onl/
to activities (ithin the scope of their authorit/ in !ood faith and (ithout (illfulness, malice or corruption.
26
-n the present case, the acts for (hich the petitioners are bein! called to account (ere performed b/ them in
the dischar!e of their official duties. The acts in .uestion are clearl/ official in nature.
29
-n implementin! and
enforcin! #ections ?<AA and <5 of the &orestr/ Code throu!h the seizure carried out, petitioners (ere
performin! their duties and functions as officers of the $ENR, and did so (ithin the limits of their authorit/.
There (as no malice nor bad faith on their part. %ence, a suit a!ainst the petitioners (ho represent the
$ENR is a suit a!ainst the #tate. -t cannot prosper (ithout the #tate;s consent.
7iven the circumstances in this case, (e need not pursue the )ffice of the #olicitor 7eneral;s line for the
defense of petitioners concernin! e0haustion of administrative remedies. Be ou!ht onl/ to recall that
e0haustion must be raised at the earliest time possible, even before filin! the ans(er to the complaint or
pleadin! assertin! a claim, b/ a motion to dismiss.
2:
-f not invo'ed at the proper time, this !round for
dismissal could be deemed (aived and the court could ta'e co!nizance of the case and tr/ it.
2?
ACC)R$-N7"I, the Petition is 7RANTE$, and the assailed $ecision of the Court of Appeals in CAA7.R. #P No.
25454 is #ET A#-$E.:;/phi: Conse.uentl/, the )rder issued b/ the Re!ional Trial Court of Catbalo!an,
dated Ma/ 2?, 4552, and the Brit of replevin issued in the )rder dated April 26, 4552, are ANNC""E$. The
#heriff of the Re!ional Trial Court of Catbalo!an, Branch 25, is directed to ta'e possession of the sub+ect
motor vehicle, (ith plate number &CN 468, for deliver/ to the custod/ of and appropriate disposition b/
petitioners. "et a cop/ of this decision be provided the %onorable #ecretar/ of ustice for his appropriate
action, a!ainst an/ and all persons responsible for the abovecited violation of the Revised &orestr/ Code.
Costs a!ainst private respondents.:;/phi:.n=t
#) )R$ERE$.
Bellosillo, %endo$a, Buena and #e "eon, r., ., concur.
Republic of the Philippines
SUPREME COURT
Manila
T%-R$ $-*-#-)N

G.R. No. 10A?83 May >>, 199@
ERNESTO L. C#LL#)O, petitioner,
vs.
NTERN#TON#L RCE RESE#RCH NSTTUTE, respondent.

ROMERO, J.:
$id the -nternational Rice Research -nstitute E-RR-F (aive its immunit/ from suit in this dispute (hich arose
from an emplo/erAemplo/ee relationshipJ
Be rule in the ne!ative and vote to dismiss the petition.
Ernesto Callado, petitioner, (as emplo/ed as a driver at the -RR- from April 44, 45<8 to $ecember 46, 4553.
)n &ebruar/ 44, 4553, (hile drivin! an -RR- vehicle on an official trip to the Nino/ A.uino -nternational
Airport and bac' to the -RR-, petitioner fi!ured in an accident.
Petitioner (as informed of the findin!s of a preliminar/ investi!ation conducted b/ the -RR-;s %uman
Resource $evelopment $epartment Mana!er in a Memorandum dated March 9, 4553.
1
-n vie( of the
aforesaid findin!s, he (as char!ed (ith1
E4F $rivin! an institute vehicle (hile on official dut/ under the influence of li.uorG
E2F #erious misconduct consistin! of /our failure to report to /our supervisors the failure of /our vehicle to
start because of a problem (ith the car batter/ (hich, /ou alle!ed, re.uired /ou to oversta/ in Manila for
more than si0 E:F hours, (hereas, had /ou reported the matter to -RR-, "os Ba,os b/ telephone, /our
problem could have been solved (ithin one or t(o hoursG
E8F 7ross and habitual ne!lect of /our duties.
>
-n a Memorandum dated March 5, 4553, petitioner submitted his ans(er and defenses to the char!es
a!ainst him.
3
After evaluatin! petitioner;s ans(er, e0planations and other evidence, -RR- issued a Notice of
Termination to petitioner on $ecember ?, 4553.
?
Thereafter, petitioner filed a complaint on $ecember 45, 4553 before the "abor Arbiter for ille!al dismissal,
ille!al suspension and indemnit/ pa/ (ith moral and e0emplar/ dama!es and attorne/;s fees.
)n anuar/ 2, 4554, private respondent -RR-, throu!h counsel, (rote the "abor Arbiter to inform him that
the -nstitute en+o/s immunit/ from le!al process b/ virtue of Article 8 of Presidential $ecree No. 4:23,
@
and
that it invo'es such diplomatic immunit/ and privile!es as an international or!anization in the instant case
filed b/ petitioner, not havin! (aived the same.
A
-RR- li'e(ise (rote in the same tenor to the Re!ional $irector of the $epartment of "abor and Emplo/ment.
7
Bhile admittin! -RR-;s defense of immunit/, the "abor Arbiter, nonetheless, cited an )rder issued b/ the
-nstitute on Au!ust 48, 4554 to the effect that Din all cases of termination, respondent -RR- (aives its
immunit/,D
8
and, accordin!l/, considered the defense of immunit/ no lon!er a le!al obstacle in resolvin! the
case. The dispositive portion of the "abor arbiter;s decision dated )ctober 84, 4554, reads1
B%ERE&)RE, premises considered, +ud!ment is hereb/ rendered orderin! respondent to reinstate
complainant to his former position (ithout loss or EsicF seniorit/ ri!hts and privile!es (ithin five E9F da/s
from receipt hereof and to pa/ his full bac'(a!es from March ?, 4553 to )ctober 84, 4554, in the total
amount of P<8,36<.?9 computed on the basis of his last monthl/ salar/.
9
The N"RC found merit in private respondent; s appeal and, findin! that -RR- did not (aive its immunit/,
ordered the aforesaid decision of the "abor Arbiter set aside and the complaint dismissed.
10
%ence, this petition (here it is contended that the immunit/ of the -RR- as an international or!anization
!ranted b/ Article 8 of Presidential $ecree No. 4:23 ma/ not be invo'ed in the case at bench inasmuch as it
(aived the same b/ virtue of its Memorandum on D7uidelines on the handlin! of dismissed emplo/ees in
relation to P.$. 4:23.D
11
-t is also petitioner;s position that a dismissal of his complaint before the "abor Arbiter leaves him no other
remed/ throu!h (hich he can see' redress. %e further states that since the investi!ation of his case (as not
referred to the Council of -RR- Emplo/ees and Mana!ement EC-EMF, he (as denied his constitutional ri!ht to
due process.
Be find no merit in petitioner;s ar!uments.
-RR-;s immunit/ from suit is undisputed.
Presidential $ecree No. 4:23, Article 8 provides1
Art. 8. -mmunit/ from "e!al Process. The -nstitute shall en+o/ immunit/ from an/ penal, civil and
administrative proceedin!s, e0cept insofar as that immunit/ has been e0pressl/ (aived b/ the $irectorA
7eneral of the -nstitute or his authorized representatives.
-n the case of 3nternational Catholic %igration Commission v. 7on. Calle6a, et al. and Kapisanan ng
%anggaga/a at 0+C sa 3RR3 v. Secretar! of "abor and 8mplo!ment and 3RR3,
1>
the Court upheld the
constitutionalit/ of the afore.uoted la(. After the Court noted the letter of the Actin! #ecretar/ of &orei!n
Affairs to the #ecretar/ of "abor dated une 4?, 45<?, (here the immunit/ of -RR- from the +urisdiction of
the $epartment of "abor and Emplo/ment (as sustained, the Court stated that this opinion constituted Da
cate!orical reco!nition b/ the E0ecutive Branch of the 7overnment that . . . -RR- en+o/EsF immunities
accorded to international or!anizations, (hich determination has been held to be a political .uestion
conclusive upon the Courts in order not to embarass a political department of 7overnment.
13
Be cited the
Court;s earlier pronouncement in 47O v. 7on. Ben6amin +2uino, et al.,
1?
to (it1
-t is a reco!nized principle of international la( and under our s/stem of separation of po(ers that diplomatic
immunit/ is essentiall/ a political .uestion and courts should refuse to loo' be/ond a determination b/ the
e0ecutive branch of the !overnment, and (here the plea of diplomatic immunit/ is reco!nized and affirmed
b/ the e0ecutive branch of the !overnment as in the case at bar, it is then the dut/ of the courts to accept
the claim of immunit/ upon appropriate su!!estion b/ the principal la( officer of the !overnment . . . or
other officer actin! under his direction. %ence, in adherence to the settled principle that courts ma/ not so
e0ercise their +urisdiction . . . as to embarass the e0ecutive arm of the !overnment in conductin! forei!n
relations, it is accepted doctrine that in such cases the +udicial department of EthisF !overnment follo(s the
action of the political branch and (ill not embarrass the latter b/ assumin! an anta!onistic +urisdiction.
1@
&urther, (e held that DEtFhe raison d*etre for these immunities is the assurance of unimpeded performance of
their functions b/ the a!encies concerned.
The !rant of immunit/ from local +urisdiction to . . . and -RR- is clearl/ necessitated b/ their international
character and respective purposes. The ob+ective is to avoid the dan!er of partialit/ and interference b/ the
host countr/ in their internal (or'in!s. The e0ercise of +urisdiction b/ the $epartment of "abor in these
instances (ould defeat the ver/ purpose of immunit/, (hich is to shield the affairs of international
or!anizations, in accordance (ith international practice, from political pressure or control b/ the host countr/
to the pre+udice of member #tates of the or!anization, and to ensure the unhampered the performance of
their functions.
1A
The !rant of immunit/ to -RR- is clear and une.uivocal and an e0press (aiver b/ its $irectorA7eneral is the
onl/ (a/ b/ (hich it ma/ relin.uish or abandon this immunit/.
)n the matter of (aivin! its immunit/ from suit, -RR- had, earl/ on, made its position clear. Throu!h
counsel, the -nstitute (rote the "abor Arbiter cate!oricall/ informin! him that the -nstitute (ill not (aive its
diplomatic immunit/. -n the second place, petitioner;s reliance on the Memorandum (ith D7uidelines in
handlin! cases of dismissal of emplo/ees in relation to P.$. 4:23D dated ul/ 2:, 45<8, is misplaced. The
Memorandum reads, in part1
Time and a!ain the -nstitute has reiterated that it (ill not use its immunit/ under P.$. 4:23 for the purpose
of terminatin! the services of an/ of its emplo/ees. $espite continuin! efforts on the part of -RR- to live up
to this underta'in!, there appears to be apprehension in the minds of some -RR- emplo/ees. To help alla/
these fears the follo(in! !uidelines (ill be follo(ed hereafter b/ the PersonnelL"e!al )ffice (hile handlin!
cases of dismissed emplo/ees.
000 000 000
2. 5otificationJmanifestation to %O"8 or labor arbiter
-f and (hen a dismissed emplo/ee files a complaint a!ainst the -nstitute contestin! the le!alit/ of dismissal,
-RR-;s ans(er to the complaint (ill1
1
2 -ndicate in the identification of -RR- that it is an international or!anization operatin! under the la(s
of the Philippines includin! P.$. 4:23. and
3
4 Base the defense on the merits and facts of the case as (ell as the le!alit/ of the cause or causes for
termination.
5
8F 4aiving immunit! under P.#. :EBL
-f the plaintiff;s attorne/ or the arbiter, as's if -RR- (ill (aive its immunit/ (e ma! repl/ that the -nstitute
(ill be happ/ to do so, as it has in the past in the formal manner re.uired thereb/ reaffirmin! our
commitment to abide b/ the la(s of the Philippines and our full faith in the inte!rit/ and impartiall/ of the
le!al s/stem.
17
EEmphasis in this para!raphs oursF
&rom the last para!raph of the fore!oin! .uotation, it is clear that in cases involvin! dismissed emplo/ees,
the -nstitute ma/ (aive its immunit/, si!nif/in! that such (aiver is discretionar/ on its part.
Be a!ree (ith private respondent -RR- that this memorandum cannot, b/ an/ stretch of the ima!ination, be
considered the e0press (aiver b/ the $irectorA7eneral. Respondent Commission has .uoted -RR-;s repl/
thus1
The 45<8 . . . is an internal memo addressed to Personnel and "e!al )ffice and (as issued for its !uidance in
handlin! those cases (here -RR- opts to (aive its immunit/. 3t is not a declaration of /aiver for all cases.
0his is apparent from the use of the permissive term Mma!M rather than the mandator! term MshallM in the
last paragraph of the memo. Certainl/ the memo cannot be considered as the e0press (aiver b/ the $irector
7eneral as contemplated b/ P.$. 4:23, especiall/ since the memo (as issued b/ a former $irectorA7eneral.
At the ver/ least, the e0press declaration of the incumbent $irectorA!eneral supersedes the 45<8 memo and
should be accorded !reater respect. -t (ould be e.uall/ important to point out that the Personnel and "e!al
)ffice has been nonAe0istent since 45<< as a result of ma+or reor!anization of the -RR-. Cases of -RR- before
$)"E are handled b/ an e0ternal "e!al Counsel as in this particular
case.
18
EEmphasis suppliedF
The memorandum, issued b/ the former $irectorA7eneral to a no(Adefunct division of the -RR-, (as meant
for internal circulation and not as a pled!e of (aiver in all cases arisin! from dismissal of emplo/ees.
Moreover, the -RR-;s letter to the "abor Arbiter in the case at bench made in 4554 declarin! that it has no
intention of (aivin! its immunit/, at the ver/ least, supplants an/ pronouncement of alle!ed (aiver issued in
previous cases.
Petitioner;s alle!ation that he (as denied due process is unfounded and has no basis.
-t is not denied that he (as informed of the findin!s and char!es resultin! from an investi!ation conducted
of his case in accordance (ith -RR- policies and procedures. %e had a chance to comment thereon in a
Memorandum he submitted to the Mana!er of the %uman Resource and $evelopment $epartment.
Therefore, he (as !iven proper notice and ade.uate opportunit/ to refute the char!es and findin!s, hereb/
fulfillin! the basic re.uirements of due process.
&inall/, on the issue of referral to the Council of -RR- Emplo/ees and Mana!ement EC-EMF, petitioner
similarl/ fails to persuade the Court.
The Court, in the Kapisanan ng mga %anggaga/a at 0+C sa 3RR3 case,
19
held1
Neither are the emplo/ees of -RR- (ithout remed/ in case of dispute (ith mana!ement as, in fact, there had
been or!anized a forum for better mana!ementAemplo/ee relationship as evidenced b/ the formation of the
Council of -RR- Emplo/ees and Mana!ement EC-EMF (herein Dboth mana!ement and emplo/ees (ere and
still are represented for purposes of maintainin! mutual and beneficial cooperation bet(een -RR- and its
emplo/ees.D The e0istence of this Cnion factuall/ and tellin!l/ belies the ar!ument that Pres. $ecree No.
$ecree No. 4:23, (hich !rants to -RR- the status, privile!es and immunities of an international or!anization,
deprives its emplo/ees of the ri!ht to selfAor!anization.
Be have earlier concluded that petitioner (as not denied due process, and this, not(ithstandin! the nonA
referral to the Council of -RR- Emplo/ees and Mana!ement. Private respondent correctl/ pointed out that
petitioner, havin! opted not to see' the help of the C-EM 7rievance Committee, prepared his ans(er b/ his
o(n self.
>0
%e cannot no( fault the -nstitute for not referrin! his case to the C-EM.
-N *-EB )& T%E &)RE7)-N7, the petition for certiorari is $-#M-##E$. No costs.
#) )R$ERE$.
(eliciano, %elo and )itug, ., concur.
(rancisco, ., is on leave.
Republic of the Philippines
SUPREME COURT
Manila
&-R#T $-*-#-)N

G.R. No*. 10909@-109107 February >3, 199@
EL)EPO L#SCO, RO)OLFO ELS#N, UR!#NO !ER#)OR, FLORENTNO ESTO!O, M#RCELNO
M#TUR#N, FR#EN !#L!#G, C#RMELTO G#-OL, )EMOSTHENES M#NTO, S#TURNNO !#COL,
S#TURNNO L#SCO, R#MON LO$OL#, -OSEN#NO !. ESPN#, a11 re5re*e%'e& by M#R#NO R.
ESPN#, petitioner,
vs.
UNTE) N#TONS RE;OL;NG FUN) FOR N#TUR#L RESOURCES E2PLOR#TON 4UNRFNRE6
re5re*e%'e& by +'* o5era'+o%* 7a%a,er, )R. =$R#COS LOUC#, OSC#R N. #!ELL#, LEON G.
GONC#G#, -R., MUS! M. !U#T, Co77+**+o%er* o. Na'+o%a1 Labor Re1a'+o%* Co77+**+o% 4NLRC6,
F+.'( )+E+*+o%, Ca,aya% &e Oro C+'y a%& R;NG PETLL#, Labor #rb+'er o. !u'ua% C+'y,
respondents.

3U#SON, J.:
This is a petition for certiorari under Rule :9 of the Revised Rules of Court to set aside the Resolution dated
anuar/ 29, 4558 of the National "abor Relations Commission EN"RCF, &ifth $ivision, Ca!a/an de )ro Cit/.
Be dismiss the petition.
-
Petitioners (ere dismissed from their emplo/ment (ith private respondent, the Cnited Nations Revolvin! &und for
Natural Resources E0ploration ECNR&NREF, (hich is a special fund and subsidiar/ or!an of the Cnited Nations. The
CNR&NRE is involved in a +oint pro+ect of the Philippine 7overnment and the Cnited Nations for e0ploration (or' in
$ina!at -sland.
Petitioners are the complainants in N"RC Cases Nos. #RAB 43A38A333:?A54 to 43A38A333?<A54 and #RAB 43A3?A
33495A54 for ille!al dismissal and dama!es.
-n its Motion to $ismiss, private respondent alle!ed that respondent "abor Arbiter had no +urisdiction over its
personalit/ since it en+o/ed diplomatic immunit/ pursuant to the 456: Convention on the Privile!es and -mmunities
of the Cnited Nations. -n support thereof, private respondent attached a letter from the $epartment of &orei!n
Affairs dated Au!ust 2:, 4554, (hich ac'no(led!ed its immunit/ from suit. The letter confirmed that private
respondent, bein! a special fund administered b/ the Cnited Nations, (as covered b/ the 456: Convention on the
Privile!es and -mmunities of the Cnited Nations of (hich the Philippine 7overnment (as an ori!inal si!nator/
ERollo, p. 24F.
)n November 29, 4554, respondent "abor Arbiter issued an order dismissin! the complaints on the !round that
private respondent (as protected b/ diplomatic immunit/. The dismissal (as based on the letter of the &orei!n
)ffice dated #eptember 43, 4554.
Petitioners; motion for reconsideration (as denied. Thus, an appeal (as filed (ith the N"RC, (hich affirmed the
dismissal of the complaints in its Resolution dated anuar/ 29, 4558.
Petitioners filed the instant petition for certiorari (ithout first see'in! a reconsideration of the N"RC resolution.
--
Article 228 of the "abor Code of the Philippines, as amended, provides that decisions of the N"RC are final and
e0ecutor/. Thus, the/ ma/ onl/ be .uestioned throu!h certiorari as a special civil action under Rule :9 of the
Revised Rules of Court.
)rdinaril/, certiorari as a special civil action (ill not lie unless a motion for reconsideration is first filed before the
respondent tribunal, to allo( it an opportunit/ to correct its assi!ned errors E"ibert/ -nsurance Corporation v. Court
of Appeals, 222 #CRA 8? N4558OF.
-n the case at bench, petitioners; failure to file a motion for reconsideration is fatal to the instant petition.
Moreover, the petition lac's an/ e0planation for such omission, (hich ma/ merit its bein! considered as fallin!
under the reco!nized e0ceptions to the necessit/ of filin! such motion.
Not(ithstandin!, (e deem it (ise to !ive due course to the petition because of the implications of the issue in our
international relations.
Petitioners ar!ued that the acts of minin! e0ploration and e0ploitation are outside the official functions of an
international a!enc/ protected b/ diplomatic immunit/. Even assumin! that private respondent (as entitled to
diplomatic immunit/, petitioners insisted that private respondent (aived it (hen it en!a!ed in e0ploration (or' and
entered into a contract of emplo/ment (ith petitioners.
Petitioners, li'e(ise, invo'ed the constitutional mandate that the #tate shall afford full protection to labor and
promote full emplo/ment and e.ualit/ of emplo/ment opportunities for all E45<? Constitution, Art. >---, #ec. 8F.
The )ffice of the #olicitor 7eneral is of the vie( that private respondent is covered b/ the mantle of diplomatic
immunit/. Private respondent is a specialized a!enc/ of the Cnited Nations. Cnder Article 439 of the Charter of the
Cnited Nations1
4. The )r!anization shall en+o/ in the territor/ of its Members such privile!es and immunities as are necessar/ for
the fulfillment of its purposes.
2. Representatives of the Members of the Cnited Nations and officials of the )r!anization shall similarl/ en+o/ such
privile!es and immunities as are necessar/ for the independent e0ercise of their functions in connection (ith the
or!anization.
Corollar/ to the cited article is the Convention on the Privile!es and -mmunities of the #pecialized A!encies of the
Cnited Nations, to (hich the Philippines (as a si!nator/ E*ol. 4, Philippine Treat/ #eries, p. :24F. Be .uote
#ections 6 and 9 of Article --- thereof1
#ec. 6. 0he speciali$ed agencies, their propert! and assets, /herever located and b! /homsoever held shall en6o!
immunit! from ever! form of legal process e0cept insofar as in an/ particular case the/ have e0pressl/ (aived
their immunit/. -t is, ho(ever, understood that no (aiver of immunit/ shall e0tend to an/ measure of e0ecution
EEmphasis suppliedF.
#ec. 9. The premises of the specialized a!encies shall be inviolable. 0he propert! and assets of the speciali$ed
agencies, /herever located and b! /homsoever held, shall be immune from search, re2uisition, confiscation,
expropriation and an! other form of interference, (hether b/ e0ecutive, administrative, +udicial or le!islative action
EEmphasis suppliedF.
As a matter of state polic/ as e0pressed in the Constitution, the Philippine 7overnment adopts the !enerall/
accepted principles of international la( E45<? Constitution, Art. --, #ec. 2F. Bein! a member of the Cnited Nations
and a part/ to the Convention on the Privile!es and -mmunities of the #pecialized A!encies of the Cnited Nations,
the Philippine 7overnment adheres to the doctrine of immunit/ !ranted to the Cnited Nations and its specialized
a!encies. Both treaties have the force and effect of la(.
-n 4orld 7ealth Organi$ation v. +2uino, 6< #CRA 262, E45?2F, (e had occasion to rule that1
-t is a reco!nized principle of international la( and under our s/stem of separation of po(ers thatdiplomatic
immunit! is essentiall! a political 2uestion and courts should refuse to loo& be!ond a determination b! the
executive branch of the government, and (here the plea of diplomatic immunit/ is reco!nized and affirmed b/ the
e0ecutive branch of the !overnment as in the case at bar, it is then the dut/ of the courts to accept the claim of
immunit/ upon appropriate su!!estion b/ the principal la( officer of the !overnment, the #olicitor 7eneral or other
officer actin! under his direction. %ence, in adherence to the settled principle that courts ma/ not so e0ercise their
+urisdiction b/ seizure and detention of propert/, as to embarrass the e0ecutive arm of the !overnment in
conductin! forei!n relations, it is accepted doctrine that Din such cases the 6udicial department of >this?
government follo/s the action of the political branch and /ill not embarrass the latter b! assuming an antagonistic
6urisdiction EEmphasis suppliedF.
Be reco!nize the !ro(th of international or!anizations dedicated to specific universal endeavors, such as health,
a!riculture, science and technolo!/ and environment. -t is not surprisin! that their e0istence has evolved into the
concept of international immunities. The reason behind the !rant of privile!es and immunities to international
or!anizations, its officials and functionaries is to secure them le!al and practical independence in fulfillin! their
duties Een's, -nternational -mmunities 4? N45:4OF.
-mmunit/ is necessar/ to assure unimpeded performance of their functions. The purpose is Dto shield the affairs of
international or!anizations, in accordance (ith international practice, from political pressure or control b/ the host
countr/ to the pre+udice of member #tates of the or!anization, and to ensure the unhampered performance of their
functionsD E-nternational Catholic Mi!ration Commission v. Calle+a, 453 #CRA 483 N4553OF.
-n the 3nternational Catholic %igration Commission case, (e held that there is no conflict bet(een the
constitutional dut/ of the #tate to protect the ri!hts of (or'ers and to promote their (elfare, and the !rant of
immunit/ to international or!anizations. Clauses on +urisdictional immunit/ are no( standard in the charters of the
international or!anizations to !uarantee the smooth dischar!e of their functions.
The diplomatic immunit/ of private respondent (as sufficientl/ established b/ the letter of the $epartment of
&orei!n Affairs, reco!nizin! and confirmin! the immunit/ of CNR&NRE in accordance (ith the 456: Convention on
Privile!es and -mmunities of the Cnited Nations (here the Philippine 7overnment (as a part/. The issue (hether
an international or!anization is entitled to diplomatic immunit/ is a Dpolitical .uestionD and such determination b/
the e0ecutive branch is conclusive on the courts and .uasiA+udicial a!encies EThe %ol/ #ee v. %on. Eriberto C.
Rosario, r., 7.R. No. 434565, $ec. 4, 4556G -nternational Catholic Mi!ration Commission v. Calle+a, supraF.
)ur courts can onl/ assume +urisdiction over private respondent if it e0pressl/ (aived its immunit/, (hich is not so
in the case at bench EConvention on the Privile!es and -mmunities of the #pecialized A!encies of the Cnited
Nations, Art. ---, #ec. 6F.
Private respondent is not en!a!ed in a commercial venture in the Philippines. -ts presence here is b/ virtue of a
+oint pro+ect entered into b/ the Philippine 7overnment and the Cnited Nations for mineral e0ploration in $ina!at
-sland. -ts mission is not to e0ploit our natural resources and !ain pecuniaril/ thereb/ but to help improve the
.ualit/ of life of the people, includin! that of petitioners.
This is not to sa/ that petitioner have no recourse. #ection 84 of the Convention on the Privile!es and -mmunities
of the #pecialized A!encies of the Cnited Nations states that Deach specialized a!enc/ shall ma'e a provision for
appropriate modes of settlement of1 EaF disputes arisin! out of contracts or other disputes of private character to
(hich the specialized a!enc/ is a part/.D
B%ERE&)RE, the petition is $-#M-##E$.
#) )R$ERE$.
Padilla, #avide, r., Bellosillo and Kapunan, ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-1A?8 #u,u*' 17, 19?9
PE)RO S$3U#, GONC#LO S$3U#, a%& LEOPOL)O S$3U#, petitioners,
vs.
N#T;)#) #LME)# LOPEC, -u&,e o. Mu%+/+5a1 Cour' o. Ma%+1a, CONR#)O ;. S#NCHEC, -u&,e o.
Cour' o. F+r*' %*'a%/e o. Ma%+1a, GEORGE F. MOORE, ET #L., respondents.
Gibbs, Gibbs, Chuidian and 9uasha for petitioner.
. +. 4olfson for respondent.
MONTEM#$OR, J.B
&or the purposes of this decision, the follo(in! facts !athered from and based on the pleadin!s, ma/ be
stated. The plaintiffs named Pedro, 7onzalo, and "eopoldo, all surnamed #/.uia, are the undivided +oint
o(ners of three apartment buildin!s situated in the Cit/ of Manila 'no(n as the North #/.uia Apartments,
#outh #/.uia Apartments and Michel Apartments located at 4484 M. %. del Pilar, 4494 M. %. del Pilar and
44<< A. Mabini #treets, respectivel/.
About the middle of the /ear 4569, said plaintiffs e0ecuted three lease contracts, one for each of the three
apartments, in favor of the Cnited #tates of America at a monthl/ rental of P4,??9 for the North #/.uia
Apartments, P4,<53 for the #outh #/.uia Apartment, and P8,889 for the Michel Apartments. The term or
period for the three leases (as to be Dfor the duration of the (ar and si0 months thereafter, unless sooner
terminated b/ the Cnited #tates of America.D The apartment buildin!s (ere used for billetin! and .uarterin!
officers of the C. #. armed forces stationed in the Manila area.
-n March 456?, (hen these court proceedin!s (ere commenced, 7eor!e &. Moore (as the Commandin!
7eneral, Cnited #tates Arm/, Philippine R/u'us Command, Manila, and as Commandin! 7eneral of the C. #.
Arm/ in the Manila Theatre, (as said to control the occupanc/ of the said apartment houses and had
authorit/ in the name of the Cnited #tates 7overnment to assi!n officers of the C. #. Arm/ to said
apartments or to order said officers to vacate the same. Erland A. Tillman (as the Chief, Real Estate
$ivision, )ffice of the $istrict En!ineers, C. #. Arm/, Manila, (ho, under the command of defendant Moore
(as in direct char!e and control of the lease and occupanc/ of said three apartment buildin!s. $efendant
Moore and Tillman themselves did not occup/ an/ part of the premises in .uestion.
Cnder the theor/ that said leases terminated si0 months after #eptember 2, 4569, (hen apan surrendered,
plaintiffs sometime in March, 456:, approached the predecessors in office of defendants Moore and Tillman
and re.uested the return of the apartment buildin!s to them, but (ere advised that the C. #. Arm/ (anted
to continue occup/in! the premises. )n Ma/ 44, 456:, said plaintiffs re.uested the predecessors in office of
Moore and Tillman to rene!otiate said leases, e0ecute lease contract for a period of three /ears and to pa/ a
reasonable rental hi!her than those pa/able under the old contracts. The predecessors in office of Moore in a
letter dated une :, 456:, refused to e0ecute ne( leases but advised that Dit is contemplated that the Cnited
#tates Arm/ (ill vacate sub+ect properties prior to 4 &ebruar/ 456?.D Not bein! in conformit/ (ith the
continuance of the old leases because of the alle!ed comparativel/ lo( rentals bein! paid thereunder,
plaintiffs formall/ re.uested Tillman to cancel said three leases and to release the apartment buildin!s on
une 2<, 456:. Tillman refused to compl/ (ith the re.uest. Because of the alle!ed representation and
assurance that the C.#. 7overnment (ould vacate the premises before &ebruar/ 4, 456?, the plaintiffs too'
no further steps to secure possession of the buildin!s and accepted the monthl/ rentals tendered b/ the
predecessors in office of Moore and Tillman on the basis of a month to month lease sub+ect to cancellation
upon thirt/ da/s notice. Because of the failure to compl/ (ith the alle!ed representation and assurance that
the three apartment buildin!s (ill be vacated prior to &ebruar/ 4, 456?, plaintiffs on &ebruar/ 4?, 456?,
served formal notice upon defendants Moore and Tillman and :6 other arm/ officers or members of the
Cnited #tates Armed &orces (ho (ere then occup/in! apartments in said three buildin!s, demandin! EaF
cancellation of said leasesG EbF increase in rentals to P833 per month per apartment effective thirt/ da/s
from noticeG EcF e0ecution of ne( leases for the three or an/ one or t(o of the said apartment buildin!s for a
definite term, other(ise, EdF release of said apartment buildin!s (ithin thirt/ da/s of said notice in the event
of the failure to compl/ (ith the fore!oin! demands. The thirt/Ada/ period havin! e0pired (ithout an/ of the
defendants havin! complied (ith plaintiffs; demands, the plaintiffs commenced the present action in the
Municipal Court of Manila in the form of an action for unla(ful detainer EdesahucioF a!ainst Moore and
Tillman and the :6 persons occup/in! apartments in the three buildin!s for the purpose of havin! them
vacate the apartments, each occupants to pa/ P833 a month for his particular apartment from anuar/ 4,
456? until each of said particular defendant had vacated said apartmentG to permit plaintiffs access to said
apartment buildin!s for the purpose of appraisin! the dama!es sustained as the result of the occupanc/ b/
defendantsG that defendants be ordered to pa/ plaintiffs (hatever dama!es ma/ have been actuall/ caused
on said propert/G and that in the event said occupants are unable to pa/ said P833 a month andLor the
dama!es sustained b/ said propert/, the defendants Moore and Tillman +ointl/ and severall/ be made to pa/
said monthl/ rentals of P833 per month per apartment from anuar/ 4, 456? to March 45, 456?, inclusive,
andLor the dama!es sustained b/ said apartments, and that defendants Moore and Tillman be permanentl/
en+oined a!ainst orderin! an/ additional parties in the future from enterin! and occup/in! said premises.
Actin! upon a motion to dismiss filed throu!h the #pecial Assistant of the ud!e Advocate, Philippine R/u'us
Command on the !round that the court had no +urisdiction over the defendants and over the sub+ect matter
of the action, because the real part/ in interest (as the C.#. 7overnment and not the individual defendants
named in the complaint, and that the complaint did not state a cause of action, the municipal court of Manila
in an order dated April 25, 456?, found that the (ar bet(een the Cnited #tates of America and her allies on
one side and 7erman/ and apan on the other, had not /et terminated and, conse.uentl/, the period or term
of the three leases had not /et e0piredG that under the (ell settled rule of -nternational "a(, a forei!n
!overnment li'e the Cnited #tates 7overnment cannot be sued in the courts of another state (ithout its
consentG that it (as clear from the alle!ations of the complaint that althou!h the Cnited #tates of America
has not been named therein as defendant, it is nevertheless the real defendant in this case, as the parties
named as defendants are officers of the Cnited #tates Arm/ and (ere occup/in! the buildin!s in .uestion as
such and pursuant to orders received from that 7overnment. The municipal court dismissed the action (ith
costs a!ainst the plaintiffs (ith the su!!estion or opinion that a citizen of the Philippines, (ho feels
a!!rieved b/ the acts of the 7overnment of a forei!n countr/ has the ri!ht to demand that the Philippine
7overnment stud/ his claim and if found meritorious, ta'e such diplomatic steps as ma/ be necessar/ for
the vindication of ri!hts of that citizen, and that the matter included or involved in the action should be a
proper sub+ect matter of representations bet(een the 7overnment of the 7overnment of the Cnited #tates
of America and the Philippines. Not bein! satisfied (ith the order, plaintiffs appealed to the Court of Manila,
(here the motion to dismiss (as rene(ed.
The Court of &irst -nstance of Manila in an order dated ul/ 42, 456?, affirmed the order of the municipal
court dismissin! plaintiffs; complaint. -t conceded that under the doctrine laid do(n in the case of -. S. vs.
"ee, 43: C. #., 45: and affirmed in the case of 0indal vs. 4esle!, 4:? C. #., 236 ordinaril/, courts have
+urisdiction over cases (here private parties sue to recover possession of propert/ bein! held b/ officers or
a!ents actin! in the name of the C. #. 7overnment even thou!h no suit can be brou!ht a!ainst the
7overnment itself, but inasmuch as the plaintiffs in the present case are brin!in! this action a!ainst officers
and a!ents of the C. #. 7overnment not onl/ to recover the possession of the three apartment houses
supposedl/ bein! held ille!all/ b/ them in the name of their !overnment, but also to collect bac' rents, not
onl/ at the rate a!reed upon in the lease contracts entered into b/ the Cnited #tates of America but in
e0cess of said rate, to sa/ nothin! of the dama!es claimed, as a result of (hich, a +ud!ment in these
proceedin!s ma/ become a char!e a!ainst the C. #. Treasur/, then under the rule laid do(n in the case of
"and vs. $ollar, 54 "a(. ed., 4235, the present suit must be re!arded as one a!ainst the Cnited #tates
7overnment itself, (hich cannot be sued (ithout its consent, speciall/ b/ citizens of another countr/.
The plaintiffs as petitioners have brou!ht this case before us on a petition for a (rit of mandamus see'in! to
order the Municipal Court of Manila to ta'e +urisdiction over the case. )n )ctober 83, 456?, counsel for
respondents Almeda "opez, #anchez, Moore and Tillman filed a motion to dismiss on several !rounds. The
case (as orall/ ar!ued on November 2:, 456?. )n March 6, 456<, petitioners filed a petition (hich, amon!
other thin!s, informed this Court that the North #/.uia Apartments, the #outh #/.uia Apartments and
Michel Apartments (ould be vacated b/ their occupants on &ebruar/ 25, March 84, and Ma/ 84, 456<,
respectivel/. As a matter of fact, said apartments (ere actuall/ vacated on the dates alread/ mentioned and
(ere received b/ the plaintiffAo(ners.
)n the basis of this petition and because of the return of the three apartment houses to the o(ners, counsel
for respondents Almeda "opez, #anchez, Moore and Tillman filed a petition to dismiss the present case on
the !round that it is moot. Counsel for the petitioners ans(erin! the motion, claimed that the plaintiffs and
petitioners possession of the three apartment houses, reservin! all of their ri!hts a!ainst respondents
includin! the ri!ht to collect rents and dama!esG that the/ have not been paid rents since anuar/ 4, 456?G
that respondents admitted that there is a total of P435,<59 in rentals due and o(in! to petitionersG that
should this case be no( dismissed, the petitioners (ill be unable to enforce collectionG that the .uestion of
la( involved in this case ma/ a!ain come up before the courts (hen conflicts arise bet(een &ilipino civilian
propert/ o(ners and the C.#. Arm/ authorities concernin! contracts entered into in the Philippines bet(een
said &ilipinos and the C.#. 7overnment. Conse.uentl/, this Court, accordin! to the petitioners, far from
dismissin! the case, should decide it, particularl/ the .uestion of +urisdiction.
)n une 4<, 4565, throu!h a Dpetition to amend complaintD counsel for the petitioners informed this court
that petitioners had alread/ received the C. #. Arm/ &orces in the Bestern Pacific the sum of P435,<59 as
rentals for the three apartments, but (ith the reservation that said acceptance should not be construed as
+eopardizin! the ri!hts of the petitioners in the case no( pendin! in the courts of the Philippines or their
ri!hts a!ainst the C. #. 7overnment (ith respect to the three apartment houses. -n vie( of this last petition,
counsel for respondents alle!in! that both respondent Moore and Tillman had lon! left the -slands for other
Arm/ assi!nments, and no( that both the possession of the three apartments in .uestion as (ell as the
rentals for their occupation have alread/ been received b/ the petitioners rene( their motion for dismissal
on the !round that this case has no( become moot.
The main purpose of the ori!inal action in the municipal court (as to recover the possession of the three
apartment houses in .uestion. The recover/ of rentals as submitted b/ the ver/ counsel for the petitioner
(as merel/ incidental to the main action. Because the prime purpose of the action had been achieved,
namel/, the recover/ of the possession of the premises, apart from the fact that the rentals amountin! to
P435,<59 had been paid to the petitioners and accepted b/ them thou!h under reservations, this Court ma/
no( (ell dismiss the present proceedin!s on the !round that the .uestions involved therein have become
academic and moot. Counsel for the petitioners ho(ever, insists that a decision be rendered on the merits,
particularl/ on the .uestion of +urisdiction of the municipal court over the ori!inal action, not onl/ for the
satisfaction of the parties involved but also to serve as a !uide in future cases involvin! cases of similar
nature such as contracts of lease entered into bet(een the 7overnment of the Cnited #tates of America on
one side and &ilipino citizens on the other re!ardin! properties of the latter. Be accept the su!!estion of
petitioners and shall proceed to discuss the facts and la( involved and rule upon them.
Be shall concede as correctl/ did the Court of &irst -nstance, that follo(in! the doctrine laid do(n in the
cases of-. S. vs. "ee and -. S. vs. 0indal, supra, a private citizen claimin! title and ri!ht of possession of a
certain propert/ ma/, to recover possession of said propert/, sue as individuals, officers and a!ents of the
7overnment (ho are said to be ille!all/ (itholdin! the same from him, thou!h in doin! so, said officers and
a!ents claim that the/ are actin! for the 7overnment, and the court ma/ entertain such a suit altho the
7overnment itself is not included as a part/Adefendant. )f course, the 7overnment is not bound or
concluded b/ the decision. The philosoph/ of this rulin! is that unless the courts are permitted to ta'e
co!nizance and to assume +urisdiction over such a case, a private citizen (ould be helpless and (ithout
redress and protection of his ri!hts (hich ma/ have been invaded b/ the officers of the !overnment
professin! to act in its name. -n such a case the officials or a!ents assertin! ri!htful possession must prove
and +ustif/ their claim before the courts, (hen it is made to appear in the suit a!ainst them that the title and
ri!ht of possession is in the private citizen. %o(ever, and this is important, (here the +ud!ment in such a
case (ould result not onl/ in the recover/ of possession of the propert/ in favor of said citizen but also in a
char!e a!ainst or financial liabilit/ to the 7overnment, then the suit should be re!arded as one a!ainst the
!overnment itself, and, conse.uentl/, it cannot prosper or be validl/ entertained b/ the courts e0cept (ith
the consent of said 7overnment. ESee case of "and vs. $ollar, 54 "a(. ed., 4235.F
&rom a careful stud/ of this case, considerin! the facts involved therein as (ell as those of public 'no(led!e
of (hich (e ta'e +udicial co!nizance, (e are convinced that the real part/ in interest as defendant in the
ori!inal case is the Cnited #tates of America. The lessee in each of the three lease a!reements (as the
Cnited #tates of America and the lease a!reement themselves (ere e0ecuted in her name b/ her officials
actin! as her a!ents. The considerations or rentals (as al(a/s paid b/ the C. #. 7overnment. The ori!inal
action in the municipal court (as brou!ht on the basis of these three lease contracts and it is obvious in the
opinion of this court that an/ bac' rentals or increased rentals (ill have to be paid b/ the C. #. 7overnment
not onl/ because, as alread/ stated, the contracts of lease (ere entered into b/ such 7overnment but also
because the premises (ere used b/ officers of her armed forces durin! the (ar and immediatel/ after the
terminations of hostilities.
Be cannot see ho( the defendants and respondents Moore and Tillman could be held individuall/ responsible
for the pa/ments of rentals or dama!es in relation to the occupanc/ of the apartment houses in .uestion.
Both of these arm/ officials had no intervention (hatsoever in the e0ecution of the lease a!reements nor in
the initial occupanc/ of the premises both of (hich (ere effected thru the intervention of and at the instance
of their predecessors in office. The ori!inal re.uest made b/ the petitioners for the return of the apartment
buildin!s after the supposed termination of the leases, (as made to, and denied not b/ Moore and Tillman
but b/ their predecessors in office. The notice and decision that the C. #. Arm/ (anted and in fact continued
to occup/ the premises (as made not b/ Moore and Tillman but b/ predecessors in office. The refusal to
rene!otiate the leases as re.uested b/ the petitioners (as made not b/ Moore but b/ his predecessors in
office accordin! to the ver/ complaint filed in the municipal court. The assurance that the C. #. Arm/ (ill
vacate the premises prior to &ebruar/ 25, 456?, (as also made b/ the predecessors in office of Moore.
As to the defendant Tillman, accordin! to the complaint he (as Chief, Real #tate $ivision, )ffice of the
$istrict En!ineer, C. #. Arm/, and (as in direct char!e and control of the leases and occupanc/ of the
apartment buildin!s, but he (as under the command of defendant Moore, his superior officer. Be cannot see
ho( said defendant Tillman in assi!nin! ne( officers to occup/ apartments in the three buildin!s, in
obedience to order or direction from his superior, defendant Moore, could be held personall/ liable for the
pa/ment of rentals or increase thereof, or dama!es said to have been suffered b/ the plaintiffs.
Bith respect to defendant 7eneral Moore, (hen he assumed his command in Manila, these lease a!reement
had alread/ been ne!otiated and e0ecuted and (ere in actual operation. The three apartment buildin!s (ere
occupied b/ arm/ officers assi!ned thereto b/ his predecessors in office. All that he must have done (as to
assi!n or billet incomin! arm/ officers to apartments as the/ (ere vacated b/ out!oin! officers due to
chan!es in station. %e found these apartment buildin!s occupied b/ his !overnment and devoted to the use
and occupanc/ of arm/ officers stationed in Manila under his command, and he had reasons to believe that
he could continue holdin! and usin! the premises theretofore assi!ned for that purpose and under contracts
previousl/ entered into b/ his !overnment, as lon! as and until orders to the contrar/ (ere received b/ him.
-t is even to be presumed that (hen demand (as made b/ the plaintiffs for the pa/ment of increased rentals
or for vacatin! the three apartment buildin!s, defendant Moore, not a la(/er b/ profession but a soldier,
must have consulted and sou!ht the advise of his le!al department, and that his action in declinin! to pa/
the increased rentals or to e+ect all his arm/ officers from the three buildin!s must have been in pursuance
to the advice and counsel of his le!al division. At least, he (as not in a position to pa/ increased rentals
above those set and stipulated in the lease a!reements, (ithout the approval of his !overnment, unless he
personall/ assumed financial responsibilit/ therefor. Cnder these circumstances, neither do (e believe nor
find that defendant Moore can be held personall/ liable for the pa/ment of bac' or increased rentals and
alle!ed dama!es.
As to the arm/ officers (ho actuall/ occupied the apartments involved, there is less reason for holdin! them
personall/ liable for rentals and supposed dama!es as sou!ht b/ the plaintiffs. -t must be remembered that
these arm/ officers (hen comin! to their station in Manila (ere not !iven the choice of their d(ellin!s. The/
(ere merel/ assi!ned .uarters in the apartment buildin!s in .uestion. #aid assi!nments or billets ma/ (ell
be re!arded as orders, and all that those officers did (as to obe/ them, and, accordin!l/, occupied the
rooms assi!ned to them. Cnder such circumstances, can it be supposed or conceived that such arm/ officers
(ould first in.uire (hether the rental bein! paid b/ the !overnment for the rooms or apartments assi!ned to
them b/ order of their superior officer (as fair and reasonable or not, and (hether the period of lease
bet(een their !overnment and the o(ners of the premises had e0pired, and (hether their occupanc/ of
their rooms or apartments (as le!al or ille!alJ And if the/ dismissed these seemin!l/ idle speculations,
assumin! that the/ ever entered their minds, and continued to live in their apartments unless and until
orders to the contrar/ (ere received b/ them, could the/ later be held personall/ liable for an/ bac' rentals
(hich their !overnment ma/ have failed to pa/ to the o(ners of the buildin!, or for an/ dama!es to the
premises incident to all leases of propert/, speciall/ in the absence of proof that such dama!es to propert/
had been caused b/ them and not b/ the previous occupants, also arm/ officers (ho are not no( parties
defendant to this suitJ -ncidentall/ it ma/ be stated that both defendants Moore and Tillman have lon! left
these -slands to assume other commands or assi!nments and in all probabilit/ none of their :6 coA
defendants is still (ithin this +urisdiction.
)n the basis of the fore!oin! considerations (e are of the belief and (e hold that the real part/ defendant in
interest is the 7overnment of the Cnited #tates of AmericaG that an/ +ud!ment for bac' or increased rentals
or dama!es (ill have to be paid not b/ defendants Moore and Tillman and their :6 coAdefendants but b/ the
said C. #. 7overnment. )n the basis of the rulin! in the case of "and vs. #ollar alread/ cited, and on (hat
(e have alread/ stated, the present action must be considered as one a!ainst the C. #. 7overnment. -t is
clear that the courts of the Philippines includin! the Municipal Court of Manila have no +urisdiction over the
present case for unla(ful detainer. The .uestion of lac' of +urisdiction (as raised and interposed at the ver/
be!innin! of the action. The C. #. 7overnment has not !iven its consent to the filin! of this suit (hich is
essentiall/ a!ainst her, thou!h not in name. Moreover, this is not onl/ a case of a citizen filin! a suit a!ainst
his o(n 7overnment (ithout the latter;s consent but it is of citizen filin! an action a!ainst a forei!n
!overnment (ithout said !overnment;s consent, (hich renders more obvious the lac' of +urisdiction of the
courts of his countr/. The principles of the la( behind this rule are so elementar/ and of such !eneral
acceptance that (e deem it unnecessar/ to cite authorities in support thereof.
-n conclusion (e find that the Municipal Court of Manila committed no error in dismissin! the case for lac' of
+urisdiction and that the Court of &irst -nstance acted correctl/ in affirmin! the municipal court;s order of
dismissal. Case dismissed, (ithout pronouncement as to costs.
%oran, C.., Paras, (eria, Beng$on, 0uason and Re!es, ., concur.
Republic of the Philippines
SUPREME COURT
Manila
#EC)N$ $-*-#-)N

G.R. No. L-30A71 NoEe7ber >8, 1973
REPU!LC OF THE PHLPPNES, petitioner,
vs.
HON. GULLERMO P. ;LL#SOR, a* -u&,e o. '(e Cour' o. F+r*' %*'a%/e o. Cebu, !ra%/( , THE
PRO;NC#L SHERFF OF RC#L, THE SHERFF OF 3UECON CT$, a%& THE SHERFF OF THE CT$
OF M#NL#, THE CLER= OF COURT, Cour' o. F+r*' %*'a%/e o. Cebu, P. -. =ENER CO., LT).,
G#;NO UNCHU#N, #N) NTERN#TON#L CONSTRUCTON CORPOR#TON, respondents.
Office of the Solicitor General (elix ). %a&asiar and Solicitor Bernardo P. Pardo for petitioner.
Andres T. *elarde and Marcelo B. &ernan for respondents.

FERN#N)O, J.:
The Republic of the Philippines in this certiorari and prohibition proceedin! challen!es the validit/ of an order
issued b/ respondent ud!e 7uillermo P. *illasor, then of the Court of &irst -nstance of Cebu, Branch -,
1
declarin! a decision final and e0ecutor/ and of an alias (rit of e0ecution directed a!ainst the funds of the
Armed &orces of the Philippines subse.uentl/ issued in pursuance thereof, the alle!ed !round bein! e0cess
of +urisdiction, or at the ver/ least, !rave abuse of discretion. As thus simpl/ and tersel/ put, (ith the facts
bein! undisputed and the principle of la( that calls for application indisputable, the outcome is predictable.
The Republic of the Philippines is entitled to the (rits pra/ed for. Respondent ud!e ou!ht not to have acted
thus. The order thus impu!ned and the alias (rit of e0ecution must be nullified.
-n the petition filed b/ the Republic of the Philippines on ul/ ?, 45:5, a summar/ of facts (as set forth thus1
D?. )n ul/ 8, 45:4, a decision (as rendered in #pecial Proceedin!s No. 249:AR in favor of respondents P. .
Kiener Co., "td., 7avino Cnchuan, and -nternational Construction Corporation, and a!ainst the petitioner
herein, confirmin! the arbitration a(ard in the amount of P4,?42,85:.63, sub+ect of #pecial Proceedin!s. <.
)n une 26, 45:5, respondent %onorable 7uillermo P. *illasor, issued an )rder declarin! the aforestated
decision of ul/ 8, 45:4 final and e0ecutor/, directin! the #heriffs of Rizal Province, =uezon Cit/ Nas (ell asO
Manila to e0ecute the said decision. 5. Pursuant to the said )rder dated une 26, 45:5, the correspondin!
Alias Brit of E0ecution N(as issuedO dated une 2:, 45:5, .... 43. )n the stren!th of the aforeAmentioned
Alias Brit of E0ecution dated une 2:, 45:5, the Provincial #heriff of Rizal Erespondent hereinF served
notices of !arnishment dated une 2<, 45:5 (ith several Ban's, speciall/ on the Dmonies due the Armed
&orces of the Philippines in the form of deposits sufficient to cover the amount mentioned in the said Brit of
E0ecutionDG the Philippine *eterans Ban' received the same notice of !arnishment on une 83, 45:5 .... 44.
The funds of the Armed &orces of the Philippines on deposit (ith the Ban's, particularl/, (ith the Philippine
*eterans Ban' and the Philippine National Ban' NorO their branches are public funds dul/ appropriated and
allocated for the pa/ment of pensions of retirees, pa/ and allo(ances of militar/ and civilian personnel and
for maintenance and operations of the Armed &orces of the Philippines, as per Certification dated ul/ 8,
45:5 b/ the A&P Controller,...D
>
. The para!raph immediatel/ succeedin! in such petition then alle!ed1 D42.
Respondent ud!e, %onorable 7uillermo P. *illasor, acted in e0cess of +urisdiction NorO (ith !rave abuse of
discretion amountin! to lac' of +urisdiction in !rantin! the issuance of an alias (rit of e0ecution a!ainst the
properties of the Armed &orces of the Philippines, hence, the Alias Brit of E0ecution and notices of
!arnishment issued pursuant thereto are null and void.D
3
-n the ans(er filed b/ respondents, throu!h
counsel Andres T. *elarde and Marcelo B. &ernan, the facts set forth (ere admitted (ith the onl/ .ualification
bein! that the total a(ard (as in the amount of P2,8?2,884.63.
?
The Republic of the Philippines, as mentioned at the outset, did ri!ht in filin! this certiorari and prohibition
proceedin!. Bhat (as done b/ respondent ud!e is not in conformit/ (ith the dictates of the Constitution. .
-t is a fundamental postulate of constitutionalism flo(in! from the +uristic concept of soverei!nt/ that the
state as (ell as its !overnment is immune from suit unless it !ives its consent. -t is readil/ understandable
(h/ it must be so. -n the classic formulation of %olmes1 DA soverei!n is e0empt from suit, not because of
an/ formal conception or obsolete theor/, but on the lo!ical and practical !round that there can be no le!al
ri!ht as a!ainst the authorit/ that ma'es the la( on (hich the ri!ht depends.D
@
#ociolo!ical +urisprudence
supplies an ans(er not dissimilar. #o it (as indicated in a recent decision, Providence 4ashington 3nsurance
Co. v. Republic of the Philippines,
A
(ith its affirmation that Da continued adherence to the doctrine of nonA
suabilit/ is not to be deplored for as a!ainst the inconvenience that ma/ be caused private parties, the loss
of !overnmental efficienc/ and the obstacle to the performance of its multifarious functions are far !reater if
such a fundamental principle (ere abandoned and the availabilit/ of +udicial remed/ (ere not thus
restricted. Bith the (ell 'no(n propensit/ on the part of our people to !o to court, at the least provocation,
the loss of time and ener!/ re.uired to defend a!ainst la( suits, in the absence of such a basic principle that
constitutes such an effective obstacle, could ver/ (ell be ima!ined.D
7
This fundamental postulate underl/in! the 4589 Constitution is no( made e0plicit in the revised charter. -t is
therein e0pressl/ provided1 DThe #tate ma/ not be sued (ithout its consent.D
8
A corollar/, both dictated b/
lo!ic and sound sense from a basic concept is that public funds cannot be the ob+ect of a !arnishment
proceedin! even if the consent to be sued had been previousl/ !ranted and the state liabilit/ ad+ud!ed. Thus
in the recent case of Commissioner of Public 7igh/a!s v. San #iego,
9
such a (ellAsettled doctrine (as
restated in the opinion of ustice Teehan'ee1 DThe universal rule that (here the #tate !ives its consent to be
sued b/ private parties either b/ !eneral or special la(, it ma/ limit claimant;s action ;onl/ up to the
completion of proceedin!s anterior to the sta!e of e0ecution; and that the po(er of the Courts ends (hen
the +ud!ment is rendered, since !overnment funds and properties ma/ not be seized under (rits of
e0ecution or !arnishment to satisf/ such +ud!ments, is based on obvious considerations of public polic/.
$isbursements of public funds must be covered b/ the correspondin! appropriation as re.uired b/ la(. The
functions and public services rendered b/ the #tate cannot be allo(ed to be paral/zed or disrupted b/ the
diversion of public funds from their le!itimate and specific ob+ects, as appropriated b/ la(.D
10
#uch a
principle applies even to an attempted !arnishment of a salar/ that had accrued in favor of an emplo/ee.
#irector of Commerce and 3ndustr! v. Concepcion,
11
spea's to that effect. ustice Malcolm as ponente left
no doubt on that score. Thus1 DA rule (hich has never been seriousl/ .uestioned, is that mone/ in the hands
of public officers, althou!h it ma/ be due !overnment emplo/ees, is not liable to the creditors of these
emplo/ees in the process of !arnishment. )ne reason is, that the #tate, b/ virtue of its soverei!nt/, ma/ not
be sued in its o(n courts e0cept b/ e0press authorization b/ the "e!islature, and to sub+ect its officers to
!arnishment (ould be to permit indirectl/ (hat is prohibited directl/. Another reason is that mone/s sou!ht
to be !arnished, as lon! as the/ remain in the hands of the disbursin! officer of the 7overnment, belon! to
the latter, althou!h the defendant in !arnishment ma/ be entitled to a specific portion thereof. And still
another reason (hich covers both of the fore!oin! is that ever/ consideration of public polic/ forbids it.D
1>
-n the li!ht of the above, it is made abundantl/ clear (h/ the Republic of the Philippines could ri!htfull/
alle!e a le!itimate !rievance.
B%ERE&)RE, the (rits of certiorari and prohibition are !ranted, nullif/in! and settin! aside both the order of
une 26, 45:5 declarin! e0ecutor/ the decision of ul/ 8, 45:4 as (ell as the alias (rit of e0ecution issued
thereunder. The preliminar/ in+unction issued b/ this Court on ul/ 42, 45:5 is hereb/ made permanent.
'aldivar >Chairman?, +ntonio, (ernande$ and +2uino, ., concur.
Barredo, , too& no part.
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. L-1>3> -a%uary 1>, 19?8
METROPOLT#N TR#NSPORT#TON SER;CE 4METR#N6, Petitioner,
vs.
-OSE M#. P#RE)ES, ;CENTE )E L# CRUC a%& #RSENO C. ROL)#N, -u&,e* o. Cour' o. %&u*'r+a1
Re1a'+o%*, a%& THE N#TON#L L#!OR UNON, Respondents.
HL#)O J.:
Before the Court of -ndustrial Relations a petition (as filed in case No. 8:A* entitled DNational "abor Cnion,
versusMetropolitan #ervice EMetranF,D (herein petitioner alle!ed that it (as a le!itimate labor or!anization,
thirt/ of (hose affiliated members (ere (or'in! and under the emplo/ of the respondentG that the
respondent is a semiA!overnmental transportation entit/, popularl/ 'no(n as ;Metran,; and after several
other alle!ations concluded (ith the pra/er that its nine demands at len!th set forth in said petition be
!ranted. -n behalf of the soAcalled respondent an oral petition for dismissal of the case (as made before the
court on )ctober 22, 456:, Don the !round that the respondent belon!s to the Republic of the Philippines
and as such, it can not be suedD E)rder of C. -. R. of November ?, 456:, Anne0 CF. B/ its aforesaid order,
the court denied the motion to dismiss, citin! in support of such resolution a para!raph alle!edl/ .uoted
from an opinion of ustice )zaeta spea'in! for the #upreme Court Din the case of the Manila %otel,D in the
(ords of the order.
-n behalf of the instant soAcalled petitioner a motion for reconsideration of that order (as filed EAnne0 $F but
it (as denied b/ the Court of -ndustrial Relations b/ its resolution dated $ecember 8, 456: EAnne0 EF.
)n $ecember ?, 456:, a notice of appeal EAnne0 &F (as filed b/ counsel, and the case is no( submitted on
appeal under the provisions of Rule 66.
-t appears that the Metropolitan Transportation #ervice EMetranF is not a corporation nor an/ of the +uridical
entities enumerated in article 89 of the Civil Code. Rule 8, section 4 provides1
D#ECT-)N 4. 4ho ma! be parties. - )nl/ natural or +udicial persons ma/ be parties in a civil action.D
DActionD is defined b/ Rule 2, section 4, as Dan ordinar/ suit in a court of +ustice, b/ (hich one part/
prosecutes another for the enforcement or protection of a ri!ht, or the prevention or redress of a (ron!.D
Considerin! that the ver/ la( of its creation ECommon(ealth Act No. 438, as amendedF, denominates the
lo(er tribunal as a DcourtD Esection 4F, considerin! the po(ers and duties conferred and imposed upon it
EChapter --F, its incidental po(ers EChapter ---F, the fact that Chapter -* of said Act and Rule 66 of the Rules
of Court provide for an appeal from an a(ard, order, or decision of the Court of -ndustrial Relations to the
#upreme Court, un.uestionabl/ a court of +ustice, and the fact that section 23 of said Common(ealth Act
No. 438 confers upon the Court of -ndustrial Relations the po(er to adopt its rules of procedure and Dsuch
other po(ers as !enerall/ pertain to a court of 6usticeD Eitalics suppliedF, and considerin! finall/ the
importance in the life and econom/ of the nation of the industrial relations (hich have thus been placed
under the +urisdiction of said Court of -ndustrial Relations, in the hearin! and determination of (hich cases
thus submitted to it, said court administers 6ustice bet(een parties, (e have no hesitation in holdin! that it
is a Dcourt of +usticeD (ithin the meanin! of Rule 2, section 4.
-n the case of %ealth vs. #teamer D#an NicolasD E? Phil., 982F, suit (as brou!ht b/ %. ". %eath a!ainst the
#teamer D#an Nicolas.D DNo natural or +uridical person (as named as defendant in the complaint,D
commented this Court. Mr. ustice Billard, spea'in! for the Court, stated the important .uestion callin! for
decision therein as follo(s1
DThe important .uestion discussed in the briefs in this court, and to be decided, is (hether such a
proceedin! as the one in .uestion, directed a!ainst the ship itself, (ithout namin! an/ natural or +uridical
person as defendant, can be maintained in these -sland.D EPa!e 986 of cited volume.F
The Court, in resolvin! said .uestion, inter alia, declared1
DThe first .uestion to be considered is (hether this action (as properl/ brou!ht a!ainst the ship and
(hether an action can no( be maintained (hen the onl/ defendant named is neither a natural nor +uridical
person. Cnder the la( in force prior to 4<5< there (as no doubt upon this sub+ect. -t (as absolutel/
indispensable for the maintenance of a contentious action in the courts of +ustice to have as defendant some
natural or +uridical person. A suit a!ainst a ship, such as is permitted in the En!lish and the American
admiralt/ courts, (as un'no(n to the #panish la(. -t is true that the #panish "a( of Civil Procedure
contained certain provisions relatin! to voluntar/ +urisdiction in matters of commerce, but none of these
provisions had an/ application to a contentious suit of this character.
D-t bein! impossible to maintain an action of this character a!ainst a ship as the onl/ defendant a ship as the
onl/ defendant prior to une, 4534, it follo(s that if such action can no( be maintained it must be b/ virtue
of some provision found in the Code of Civil Procedure and (hich is the onl/ ne( la( no( in force relatin! to
this matter. An e0amination of the provisions of the code (ill sho( that no such action is authorized. -n
cannot, therefore, be no( maintained and the demurrer of Bor+a should have been sustained on that
!round.D EPa!es 98?A98< of cited volume.F
Cnder the fore!oin! doctrine, it is obvious that the Metropolitan Transportation #ervice EMetranF could not be
sued in the Court of -ndustrial Relation. A corollar/ of this is that no a(ard, order or decision could be
rendered a!ainst it. -f so, ho( could it be said that the Court of -ndustrial Relations had +urisdiction to ta'e
co!nizance of the caseJ
Moreover, there is another vital reason (h/ the Court of -ndustrial Relations lac'ed +urisdiction to entertain
the petition, much less to !rant the remedies therein pra/ed for. -t is be/ond dispute that the Metropolitan
Transportation #ervice EMetranF is and (as at the times covered b/ the petition in the Court of -ndustrial
Relations an office created b/ E0ecutive )rder No. 95 and operatin! under the direct supervision and control
of the $epartment of the Public Bor's and Communications. EPetition, par. 4, admitted b/ respondent
+ud!es; ans(er, par. 4 and b/ respondent Cnion;s ans(er, par. 4.F The said office not bein! a +uridical person,
an/ suit, action or proceedin! a!ainst it, if it (ere to produce an/ effect, (ould in practice be a suit, action
or proceedin! a!ainst the 7overnment itself, of (hich the said Metropolitan Transportation #ervice EMetranF
is a mere office or a!enc/. An/ a(ard, order or decision !rantin! an/ of the Cnion;s demands, if attempted
to be e0ecuted, (ould necessaril/ operate a!ainst the !overnment (hich is reall/ the entit/ renderin! the
services and performin! the activities in .uestion throu!h its office or a!enc/ called Metropolitan
Transportation #ervice EMetranF. The case is different from those of the soAcalled !overnment corporations,
such as the Philippine National Ban', National $evelopment Compan/, the Manila %otel, etc., (hich have
been dul/ incorporated under our corporation la( or special charters, one of (hose po(ers is Dto sue and be
sued in an/ courtD ECorporation "a(, section 48 NaOF, and (hich actuall/ en!a!e in businessG (hile in
renderin! the services and performin! the activities here involved the 7overnment has never en!a!ed in
business nor intends to do so. No(, it is a (ellAsettled rule that the !overnment cannot be sued (ithout its
consent EMerritt vs. 7overnment of the Philippine -slands, 86 Phil., 844F and here no consent of the
!overnment has been sho(n. This is not even a case !overned b/ Act No. 83<8 (hich specifies the instances
(here this !overnment has !iven its consent to be sued ECompa,a 7eneral de Tabacos de &ilipinas
vs.7overnment of the Philippine -slands, 69 Phil., ::8F. And the Manila %otel case relied upon b/ the Court
or -ndustrial Relations in its order Anne0 C, is inapplicable for the reason that the Metropolitan
Transportation #ervice EMetranF is not a corporation, nor an/ other 'ind of +uridical person for that matter. -f
the Metropolitan Transportation #ervice EMetranF could not be sued and the Court of -ndustrial Relations
could not render an/ decision, +ud!ment, a(ard or order a!ainst it, all the proceedin!s had in said court
(ere null and void. A case ver/ similar to the present (as #al!ado vs. Ramos E:6 Phil., ?26, ?2?F, from
(hich (e .uote the follo(in! passa!e1
DT T T Conse.uentl/, (hile the claim is actuall/ made a!ainst the $irector of "ands, it is +uridicall/ a!ainst
the 7overnment of the Philippine -slands of (hich the $irector of "ands is a mere a!ent, in accordance (ith
the provisions of article 4?2? of the Civil Code.D
)n the other hand, the instant proceedin!s should be considered, as (e treat it, as havin! been instituted b/
the 7overnment itself, since the Metropolitan Transportation #ervice EMetranF is a mere office or a!enc/ of
said !overnment, unincorporated and not possessin! +uridical personalit/ under the la(, incapable of not
bein! sued but usin! ERule 8, section 4F. The ver/ alle!ations, ar!uments and contentions contained in the
petition clearl/ sho( that to all intents and purposes said petition (as bein! presented in behalf of the
7overnment as the real part/ in interest. Rule 8, section 2, provides that ever/ action must be prosecuted in
the name of the real part/ in interest. And !ivin! effect to the spirit of liberalit/ inspirin! Rule 4, section 2,
and in order to avoid multiplicit/ of suits, (e believe that this is a proper case for appl/in! the principle that
Dthe la( considers that as done (hich ou!ht to have been done.D Parentheticall/, ho(ever, (e ma/ sa/ that
(ere (e to be more ri!orous (ith petitioner herein in this re!ard, (e (ill have to be e.uall/ ri!orous (ith
petitioner in the Court of -ndustrial Relations on the same score, (ith the practical result that an/ (a/ the
proceedin!s before that court (ill have to be dismissed.
-t (ould be sophistical to sa/ that the suit or action a!ainst the said office or a!enc/ of the !overnment is
not a suit or action a!ainst the !overnment itself, upon the !round that the prohibition onl/ covers suits
a!ainst the !overnment as a (hole. A commonplace illustration (ill, (e thin', demonstrate the fallac/ of
such a theor/1 -n order that it ma/ be said that a man has been attac'ed b/ another, the latter does not
need to deliver blo(s or sho(er shots all over the bod/ of the victim in+urin! each and ever/ part thereof,
but if the blo( or the shot is inflicted upon the arm of an/ other part of his bod/, (e sa/ that the victim (as
attac'ed b/ the a!!ressor. The Bureau of Public Bor's under (hose supervision the Metropolitan
Transportation #ervice EMetranF has been or!anized and functions is an inte!ral part of the !overnment, +ust
as the said office or a!enc/. And apart from the consideration that neither said Bureau nor said office has
an/ +uridical personalit/ to be used for reasons alread/ set forth, an/ suit or action attempted a!ainst either
(ill necessaril/ be a suit or action a!ainst the !overnment itself.
DT T T Accordin!l/ it is (ell settled, as a !eneral proposition, that, (here a suit brou!ht a!ainst an officer or
agenc!(ith relation to some matter in (hich defendant represents the state in action and liabilit/, and the
state, (hile not a part/ to the record, is the real part/ a!ainst (hich relief is sou!ht so that a +ud!ment for
plaintiff, althou!h nominall/ a!ainst the named defendant as an individual or entit/ distinct from the state,
/ill operate to control the action of the state or sub6ect it to liabilit!, the suit is in effect one a!ainst the
state and cannot be maintained (ithout its consent. Apparentl/ for thus rule to appl/ the relief as'ed must
involve some direct or substantial interest of the state, as a distinct entit/, apart from the mere interest a
state ma/ have in the (elfare of its citizens of the vindication of its la(s. Bithin the inhibition of the rules,
ho(ever, are suits (herein a state officer or a!enc/ is, or (ill be, re.uired to use state propert! or funds in
order to afford the relief demanded N N ND. E95 C. ., 83?A835G italics supplied.F
-n a republican state, li'e Philippines, !overnment immunit/ from suit (ithout its consent is derived from the
(ill of the people themselves in freel/ creatin! a !overnment Dof the people, and for the peopleDAa
representative !overnment throu!h (hich the/ have a!reed to e0ercise the po(ers and dischar!e the duties
of their soverei!nt/ for the common !ood and !eneral (elfare. -n so a!reein!, the citizens have solemnl/
underta'en to surrender some of their private ri!hts and interest (hich (ere calculated to conflict (ith the
hi!her ri!hts and lar!er interests of the people as a (hole, represented b/ the !overnment thus established
b/ them all. )ne of those Dhi!her ri!hts,D based upon those Dlar!er interestsD is that !overnment immunit/.
The members of the respondent "abor Cnion themselves are part of the people (ho have freel/ that
!overnment and participated in that solemn underta'in!. -n this senseAand a ver/ real one it isAthe/ are in
effect attemptin! to use themselves alon! (ith the rest of the people represented b/ their common
!overnmentAan anomalous and absurd situation indeed.
The case is radicall/ different from a dictatorship, or an aristocratic, oli!archical, autocratic, or monarchical
!overnment, (here an/ similar immunit/ (ill be the creature of the (ill of one man or of a po(erful fe(. The
principle is further !rounded upon the necessit/ of protectin! the performance of !overnmental and public
functions from bein! harrassed undul/ or constantl/ interrupted b/ private suits. ESee also McClellan vs.
#tate, 4?3, p. ::2G 89 Cal. App., :39, :3:F Bhere the !overnment is Dof the people, b/ the people, and for
the people,D such immunit/ from suit (ill onl/ be the reaffirmation of the soverei!nt/ of the people
themselves as represented b/ their !overnment in the face of the obvious impossibilit/ of constitutin! the
entire people into one sin!le bod/ to e0ercise the po(ers and en+o/ the immunities of that soverei!nt/.
Cpon the (hole, (e are clearl/ of opinion that the proceedin!s had in the Court of -ndustrial Relations and
no( sub+ect to this appeal are null and void, particularl/ said court;s order of November 4, 456: EAnne0 CF
and its resolution of $ecember 8, 456: EAnne0 EF, (ith the necessar/ conse.uence that said court should
be, as it is hereb/, en+oined from ta'in! an/ further action in the case inconsistent (ith this decision.
No costs. #o ordered.
%oran, C. ., Paras, (eria, Pablo, Beng$on, 7ontiveros, Padilla, and 0uason, ., concur.