FESTEJO VS.

FERNANDO
94 PHIL 504 (1954)

FACTS:

Plaintiff Carmen Festejo filed an action against defendant Isaias Fernando, Director of Bureau of Public Works for unlawfully taking
possession of portions of her three parcels of land and causing the construction of irrigation canal without obtaining right of way and
without her consent or knowledge.
The lower court ruled in favor of plaintiff Festejo. On appeal, defendant Fernando invoked his being a public officer of the
government of the Philippines and thus, enjoys immunity from suit and should be absolved from liability for damages.

ISSUE: May defendant invoke immunity from suit?

HELD:

NO. Ordinarily, the officer or employee committing the tort is personally liable and may be sued as any other citizen and held
answerable for whatever injury.

THE DOCTRINE OF STATE IMMUNITY

SECTION 3, ARTICLE XVI, 1987 PHILIPPINE CONSTITUTION
U.S.A VS. GUINTO
(G.R. NO. 76607 FEBRUARY 26, 1990)

CRUZ, J.
FACTS:

In the first case, the private respondents are suing several officers of the U.S. Air Force stationed in Clark Air Base in connection
with the bidding conducted by them for contracts for barber services in the base.
In the second case, private respondents filed a complaint for damages against private petitioners for his dismissal as cook in the
U.S. Air Force Recreation Center at the John Hay Air Station.
In the third case, private respondent, who was employed as a barracks boy in a U.S. Base, was arrested following a buy-bust
operation conducted by the individual petitioners, officers of the U.S. Air Force and special agents of the Air Force Office of Special
Investigators. He then filed a complaint for damages against the individual petitioners claiming that it was because of their acts that
he was removed.
In the fourth case, a complaint for damages was filed by the private respondents against the private petitioners, for injuries allegedly
sustained by the plaintiffs as a result of the acts of the defendants. According to the plaintiffs, the defendants beat them up,
handcuffed them and unleashed dogs on them which bit them in several parts of their bodies and caused extensive injuries to them.

These cases have been consolidated because they all involve the doctrine of state immunity. The United States of America was not
impleaded in the complaints below but has moved to dismiss on the ground that they are in effect suits against it to which it has not
consented. It is now contesting the denial of its motions by the respondent judges.

ISSUE: Whether or not the Doctrine of State Immunity is not applicable thereby making the State liable

HELD:

NO. While suable, the petitioners are nevertheless not liable. It is obvious that the claim for damages cannot be allowed on the
strength of the evidence, which have been carefully examined.
The traditional rule of immunity exempts a State from being sued in the courts of another State without its consent or waiver. This
rule is a necessary consequence of the principles of independence and equality of States. However, the rules of International Law
are not petrified; they are constantly developing and evolving. And because the activities of states have multiplied, it has been
necessary to distinguish them - between sovereign and governmental acts (jure imperii) and private, commercial and proprietary
acts (jure gestionis). The result is that State immunity now extends only to acts jure imperii. The restrictive application of State
immunity is now the rule in the United States, the United Kingdom and other states in Western Europe.

The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign
sovereign, its commercial activities or economic affairs.

Stated differently, a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given
its consent to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of its
sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the defense of both the
United States and the Philippines, indisputably a function of the government of the highest order; they are not utilized for nor
dedicated to commercial or business purposes.
There is no question that the United States of America, like any other state, will be deemed to have impliedly waived its non-suability
if it has entered into a contract in its proprietary or private capacity, as in the cases at bar. It is only when the contract involves its
sovereign or governmental capacity that no such waiver may be implied. A State may be said to have descended to the level of an
individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts.

The private respondents invokes Article 2180 of the Civil Code which holds the government liable if it acts through a special agent.
The argument, it would seem, is premised on the ground that since the officers are designated "special agents," the United States
government should be liable for their torts.
There seems to be a failure to distinguish between suability and liability and a misconception that the two terms are synonymous.
Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance
that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first
consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does
waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable.
The said article establishes a rule of liability, not
suability. The government may be held liable under this rule only if it first allows itself to be sued through any of the accepted forms
of consent. Moreover, the agent performing his regular functions is not a special agent even if he is so denominated, as in the case
at bar. No less important, the said provision appears to regulate only the relations of the local state with its inhabitants and, hence,
applies only to the Philippine government and not to foreign governments impleaded in our courts.

The complaints against the petitioners in the court below were aptly dismissed.

THE DOCTRINE OF STATE IMMUNITY

SECTION 3, ARTICLE XVI, 1987 PHILIPPINE CONSTITUTION
VETERANS MANPOWER AND PROTECTIVE SERVICE, INC. VS CA
(G.R. NO. 91359, SEPTEMBER 25, 1992)

FACTS:

A suit was filed against the PC Chief for failure to act on the request by petitioner seeking to set aside the findings of PADPAO
expelling it from PADPAO and considering its application for renewal of its license even without a certificate of membership from
PADPAO. A Motion to Dismiss was filed invoking that it is a suit against the State which had not given its consent.

ISSUES:

Whether or not the action taken by the petitioners is a suit against the State.
Whether of not the PC Chief and PC-SUSIA are liable in their private capacities.
Whether or not the Memorandum of Agreement constitute as an implied consent of the State to be sued

HELD:

Yes, it is a suit against the State, the PC Chief and PC-SUSIA being instrumentalities of the State exercising the governmental
function of regulating the organization and operation of private detective watchmen or security guard agencies. Even if its action
prospers, the payment of its monetary claims may not be enforced because the State did not consent to appropriate the necessary
funds for the purpose.

No, since the acts for which the PC Chief and PC-SUSIA are being called to account in this case, were performed by them as part of
their official duties, without malice, gross negligence or bad faith, no recovery may be held against them in their private capacities.

No, the Memorandum of Agreement did not constitute an implied consent by the State to be sued because it was intended to
professionalize the industry and to standardized the salaries of the security guards. It is merely incidental to the purpose of RA No.
5487 which is to regulate the organization and operation of private security agencies.
The State is deemed to have given tacitly its consent to be sued when it enters into a contract. However, it does not apply where the
contact relates to the exercise of its sovereign functions.

SECTION 3, ARTICLE XVI, 1987 PHILIPPINE CONSTITUTION MERRITT vs. GOVERNMENT OF THE PHILIPPINES
(G.R. NO. L-11154, MARCH 21, 1916)

TRENT, J.
FACTS:

Merritt, while riding his motorcycle was hit by an ambulance owned by the Philippine General Hospital. A driver employed by the
hospital drove it. In order for Merritt to sue the Philippine government, Act No. 2457 was enacted by the Philippine Legislature
authorizing Merritt to bring suit against the Government of the Philippine Islands and authorizing the Attorney-General of said
Islands to appear in said suit. A suit was then filed before the CFI of Manila, which fixed the responsibility for the collision solely on
the ambulance driver and determined the amount of damages to be awarded to Merritt. Both parties appealed from the decision,
plaintiff Merritt as to the amount of damages and defendant in rendering the amount against the government.

ISSUE: Whether or not defendant, Government of the Philippines, waived its immunity from suit as well as conceded its liability to
the plaintiff when it enacted Act No. 2457

HELD:

NO. By consenting to be sued, a state simply waives its immunity from suit. It does not thereby concede its liability to the plaintiff, or
create any cause of action in his favor, or extend its liability to any cause not previously recognized. It merely gives a remedy to
enforce a pre-existing liability and submit itself to the jurisdiction of the court, subject to its right to interpose any lawful defense.
The Government of the Philippines Islands is only liable, for the acts of its agents, officers and employees when they act as special
agents. A special agent is one who receives a definite and fixed order or commission, foreign to the exercise of the duties of his
office if he is a special official. The special agent acts in representation of the state and being bound to act as an agent thereof, he
executes the trust confided to him. This concept does not apply to any executive agent who is an employee of the acting
administration and who on his own responsibility performs the functions which are inherent in and naturally pertain to his office and
which are regulated by law and the regulations. The responsibility of the state is limited to that which it contracts through a special
agent, duly empowered by a definite order or commission to perform some act or charged with some definite purpose which gives
rise to the claim, and not where the claim is based on acts or omissions imputable to a public official charged with some
administrative or technical office who can be held to the proper responsibility in the manner laid down by the law of civil
responsibility. The chauffeur of the ambulance of the General Hospital was not such an agent.

THE DOCTRINE OF STATE IMMUNITY

SECTION 3, ARTICLE XVI, 1987 PHILIPPINE CONSTITUTION
AMIGABLE VS. CUENCA
(G.R. NO. L-26400 FEBRUARY 29, 1972)

MAKALINTAL, J.
FACTS:

Amigable is the registered owner of a lot covered by a Transfer Certificate of Title, where no annotation in favor of the government of
any right or interest in the property appears at the back of the certificate. Without prior expropriation or negotiated sale, the
government used a portion of said lot for the construction of the Mango and Gorordo Avenues.
It appears that said avenues already existed since 1921. In 1958, Amigable's counsel wrote the President of the Philippines,
requesting payment of the portion of her lot which had been appropriated by the government. The claim was indorsed to the Auditor
General, who disallowed it. Amigable then filed in the court a quo a complaint against the Republic of the Philippines and Nicolas
Cuenca, in his capacity as Commissioner of Public Highways for the recovery of ownership and possession of the land traversed by
the Mango and Gorordo Avenues. She also sought the payment of compensatory damages for the illegal occupation of her land,
moral damages, attorney's fees and the costs of the suit. The Government had not given its consent to be sued.

ISSUE: Whether or not the appellant may properly sue the government under the facts of the case

HELD:

YES. Where the government takes away property from a private landowner for public use without going through the legal process of
expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the government without thereby violating
the doctrine of governmental immunity from suit without its consent. The doctrine of governmental immunity from suit cannot serve
as an instrument for perpetrating an injustice on a citizen. Had the government followed the procedure indicated by the governing
law at the time, a complaint would have been filed by it, and only upon payment of the compensation fixed by the judgment, or after
tender to the party entitled to such payment of the amount fixed, may it "have the right to enter in and upon the land so condemned,
to appropriate the same to the public use defined in the judgment." If there were an observance of procedural regularity, petitioners
would not be in the sad plaint they are now. It is unthinkable then that precisely because there was a failure to abide by what the law
requires, the government would stand to benefit. It is not too much to say that when the government takes any property for public
use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that it submits to
the jurisdiction of a court. There is no thought then that the doctrine of immunity from suit could still be appropriately invoked.

THE DOCTRINE OF STATE IMMUNITY

REPUBLIC VS. SANDIGANBAYAN
204 SCRA 212 (1991)

FACTS:

The PCGG filed with the Sandiganbayan a complaint for reconveyance, reversion, accounting, restitution, and damages against
private respondents Bienvenido Tantoco and Dominador Santiago, et al.
Private respondents jointly moved to strike out some portions of the complaint and for bill of particulars of other portions, which
motion was opposed by the PCGG. The Sandiganbayan gave the PCGG 45 days to expand its complaint to make more specific
certain allegations.
Private respondents then presented a Motion to leave to file interrogatories under Rule 25 of the Rules of Court.
The Sandiganbayan denied private respondents motions. Private respondents filed an Answer to with Compulsory
Counterclaim. In response, the PCGG presented a Reply to Counterclaim with Motion to Dismiss compulsory counterclaim.
Private respondents filed a pleading denominated Interrogatories to Plaintiff, and Amended Interrogatories to Plaintiff as well as a
motion for production and inspection of documents.

The Sandiganbayan admitted the Amended Interrogatories and granted the motion for production and inspection of documents
respectively.
The PCGG moved for reconsideration, arguing that the documents are privileged in character since they are intended to be used
against the PCGG and/or its Commission in violation of Sec.4 of EO No. 1, V12:
a)
No civil action shall lie against the Commission or any member thereof for anything done or omitted in the discharge of the
task contemplated by this Order.
b)
No member or staff by the Commission shall be required to testify or produce evidence in any judicial, legislative or
administrative proceedings concerning matter within its official cognizance.
The Sandiganbayan promulgated two Resolutions. The first, denying reconsideration of the Resolution allowing production of the
documents, and the second, reiterating, by implication the permission to serve the amended interrogatories on the plaintiff.

ISSUE: Is the PCGG immune from suit?

HELD:

NO. The state is of course immune from suit in the sense that it cannot, as a rule, be sued without its consent. But it is axiomatic
that in filing an action, it divests itself of its sovereign character and sheds its immunity from suit, descending to the level of an
ordinary litigant. The PCGG cannot claim a superior or preferred status to the State, even while assuming of an act for the State.
The suggestion that the State makes no implied waiver of immunity by filing a suit except when in doing so it acts in, or in matters
concerning, its proprietary or non- governmental capacity, is unacceptable. It attempts a distinction without support in principle or
precedent. On the contrary, the consent of the State to be sued may be given expressly or impliedly. Express consent may be
manifested either through a general law or a special law. Implied consent is given when the State itself commences litigation or
when it enters into a contract.

REPUBLIC OF THE PHILIPPINES VS. PABLO FELICIANO

AND INTERMEDIATE APPELLATE COURT
G.R. NO. 70853; MARCH 12, 1987

FACTS:

Petitioner seeks the review of the decision of the Intermediate Appellate Court dated April 30, 1985, which dismissed the complaint
of respondent Pablo Feliciano for recovery of ownership and possession of a parcel of land on the ground of non-suability of the
State. On January 22, 1970, Feliciano filed a complaint with then Court of First Instance of Camarines Sur against the RP,
represented by the Land Authority, for the recovery of ownership and possession of a parcel of land, consisting of four (4) lots with
an aggregate area of 1,364.4177 hectares, situated in the Barrio of Salvacion, Municipality of Tinambac, Camarines Sur. Feliciano
alleged that he bought the property in question from Victor Gardiola by virtue of a Contract of Sale dated May 31, 1952, followed by
a Deed of Absolute Sale on October 30, 1954; that Gardiola had acquired the property by purchase from the heirs of Francisco
Abrazado whose title to the said property was evidenced by an informacion posesoria that upon his purchase of the property, he
took actual possession of the same, introduced various improvements therein and caused it to be surveyed in July 1952, which
survey was approved by the Director of Lands on October 24,1954.
On November 1, 1954, President Ramon Magsaysay issued Proclamation No. 90 reserving for settlement purposes, under the
administration of the National Resettlement and Rehabilitation Administration (NARRA), a tract of land situated in the Municipalities
of Tinambac and Siruma, Camarines Sur, after which the NARRA and its successor agency, the Land Authority, started sub-dividing

and distributing the land to the settlers; that the property in question, while located within the reservation established under
Proclamation No. 90, was the private property of Feliciano and should therefore be excluded therefrom. Feliciano prayed that he be
declared the rightful and true owner of the property in question consisting of 1,364.4177 hectares; that his title of ownership based
on informacion posesoria of his predecessor-in-interest be declared legally valid and subsisting and that defendant be ordered to
cancel and nullify all awards to the settlers.

ISSUE:

Whether or not the State can be sued for recovery and possession of a parcel of land

HELD:

A suit against the State, under settled jurisprudence is not permitted, except upon a showing that the State hasconsented to be
sued, either expressly or by implication through the use of statutory language too plain to be misinterpreted. It may be invoked by
the courts sua sponte at any stage of the proceedings. Waiver of immunity, being a derogation of sovereignty, will not be inferred
lightly, but must be construed instrictissimi juris (of strictest right). Moreover, the Proclamation is not a legislative act. The consent of
the State to be sued must emanate from statutory authority. Waiver of State immunity can only be made by an act of the legislative
body. Also, it is noteworthy, that as pointed out by the Solicitor General, that the informacion posesoria registered in the Office of the
Register of Deed of Camarines Sur on September 23, 1952 was a "reconstituted" possessory information; it was "reconstituted from
the duplicate presented to this office (Register of Deeds) by Dr. Pablo Feliciano," without the submission of proof that the alleged
duplicate was authentic or that the original thereof was lost. Reconstitution can be validly made only in case of loss of the original.
These circumstances raise grave doubts as to the authenticity and validity of the "informacion posesoria" relied upon by respondent
Feliciano. Adding to the dubiousness of said document is the fact that "possessory information calls for an area of only 100
hectares," whereas the land claimed by respondent Feliciano comprises 1,364.4177 hectares, later reduced to 701-9064 hectares.

THE DOCTRINE OF STATE IMMUNITY

UNITED STATES OF AMERICA VS. RUIZ
136 SCRA 487 (1985)

FACTS:

Petitioner invited the submission of bids for repair of its wharves and shoreline in the Subic Bay Area. Eligion and Co. responded to
the invitation and submitted bids. Said company was requested by telegram to confirm its price proposals and for the name of its
bonding company, and from which it complied.
Later, the United States, through its agents, informed said company that it was not qualified to receive an award at the project for the
poorly completed projects it awarded to third parties. The company sued petitioner for specific performance and if no longer
possible, for damages. It also asked for a writ of preliminary injunction to restrain the defendants from entering into contracts with
others.
The United States entered a special appearance for the purpose only of questioning the jurisdiction of the court over the subject
matter of the complaint and the persons of the defendants, the subject matter of the complaint being acts and omissions of the
individual defendants as agents of the defendant United States of America, a foreign sovereign which has not given its consent to
this suit or any other suit for the cause of action asserted in the complaint.
US filed a motion to dismiss and opposed the writ. The trial court denied the motion and issued a writ.

ISSUE: Whether the US may be sued?

HELD:

No. The traditional rule of State immunity exempts a State from being sued in the courts of another State without its consent or
waiver. This rule is a necessary consequence of the principles of independence and equality of States. However, the rules of
International Law are not petrified; they are constantly developing and evolving. And because the activities of states have multiplied,
it has been necessary to distinguish them between sovereign and governmental acts (jure imperii) and private, commercial and
proprietary acts (jure gestionis). The result is that State immunity now extends only to acts jure imperii. The restrictive application of
State immunity is now the rule in the United States, the United Kingdom and other states in western Europe. (See Coquia and
Defensor-Santiago, Public International Law, pp. 207-209 [1984].)

The restrictive application of state immunity is proper only when the proceedings arise out of commercial transactions of the foreign
sovereign, its commercial activities or economic affairs.

Stated differently, a state may be said to have descended to the level of an individual and can be thus deemed to have tacitly given
its consent to be sued only when the contract relates to the exercise of its sovereign functions. In this case, the projects are an
integral part of the naval base which is devoted to the defense of both the US and the Philippines, undisputed a function of the
government of the highest order, they are not utilized for nor dedicated to commercial or business purposes. The correct test for the
application of State immunity is not the conclusion of a contract by a State but the legal nature of the act is shown in Syquia vs.
Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased three apartment buildings to the United States of America for the use of
its military officials. The plaintiffs sued to recover possession of the premises on the ground that the term of the leases had expired,
They also asked for increased rentals until the apartments shall have been vacated.

THE DOCTRINE OF STATE IMMUNITY

THE HOLY SEE VS. DEL ROSARIO JR
238 SCRA 524 (1994)

FACTS:

Lot 5-A is registered under the name of the petitioner The Holy See. This lot is contiguous to lots 5-B and 5-D registered in the name
of Philippine Realty Corporation (PRC). These three lots were sold through an agent Msgr. Domingo Cirilos Jr. to Ramon Licup.
Licup assigned his rights to private respondent Starbright Sales Ent. Inc. (SSEI).
Due to refusal of the squatters to vacate the lots, a dispute arose as to who of the parties has the responsibility of eviction and
clearing the land. SSEI insists that petitioner should clear the property of the squatters. Petitioner refused and proposed that either
SSEI undertake the eviction or that the earnest money be returned. Msgr. Cirilos returned the P100,000.00 earnest money, and the
property was sold to Tropicana Properties and Development Corporation (Tropicana).
SSEI filed suit for annulment of sale, specific performance and damages against Msgr. Cirilos, PRC, and Tropicana.
The petitioner and Msgr. Cirilos moved to dismiss for lack of jurisdiction based on sovereign immunity from suit. It was denied on the
ground that petitioner shed off its sovereign immunity by entering into the business contract in question.
A motion for reconsideration was also denied. Hence, this special civil action for certiorari.

ISSUE: Did the Holy See properly invoke sovereign immunity for its non-suability?

HELD:

YES. In the case at bar, lot 5-A was acquired as a donation from the archdiocese of Manila for the site of its mission or the Apostolic
Nuniciature in the Philippines. The subsequent disposal was made because the squatters living thereon made it impossible for
petitioner to use it for the purpose of the donation. Petitioner did not sell lot 5-A for profit or gain.
There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or
absolute theory, a sovereign cannot, without its consent, be made a respondent in the courts of another sovereign. According to the
newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state,
but not with regard to private acts or acts jure gestionis (United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and
Defensor-Santiago, Public International Law 194 [1984]).

The restrictive theory, which is intended to be a solution to the host of problems involving the issue of sovereign immunity, has
created problems of its own. Legal treatises and the decisions in countries which follow the restrictive theory have difficulty in
characterizing whether a contract of a sovereign state with a private party is an act jure gestionis or an act jure imperii.

The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with
the discharge of governmental functions. This is particularly true with respect to the Communist states which took control of
nationalized business activities and international trading.
This Court has considered the following transactions by a foreign state with private parties as acts jure imperii: (1) the lease by a
foreign government of apartment buildings for use of its military officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of
public bidding for the repair of a wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and (3) the
change of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]).

On the other hand, this Court has considered the following transactions by a foreign state with private parties as acts jure gestionis:
(1) the hiring of a cook in the recreation center, consisting of three restaurants, a cafeteria, a bakery, a store, and a coffee and
pastry shop at the John Hay Air Station in Baguio City, to cater to American servicemen and the general public (United States of
America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for the operation of barber shops in Clark Air Base in Angeles City
(United States of America v. Guinto, 182 SCRA 644 [1990]). The operation of the restaurants and other facilities open to the general
public is undoubtedly for profit as a commercial and not a governmental activity. By entering into the employment contract with the
cook in the discharge of its proprietary function, the United States government impliedly divested itself of its sovereign immunity
from suit.
In the absence of legislation defining what activities and transactions shall be considered "commercial" and as constituting acts jure
gestionis, we have to come out with our own guidelines, tentative they may be.
Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only
be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of
business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by
its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not
undertaken for gain or profit.

As held in United States of America v. Guinto, (supra):

"There is no question that the United States of America, like any other state, will be deemed to have impliedly waived its nonsuability if it has entered into a contract in its proprietary or private capacity. It is only when the contract involves its sovereign or
governmental capacity that no such waiver may be implied."
In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate business, surely the said
transaction can be categorized as an act jure gestionis. However, petitioner has denied that the acquisition and subsequent disposal
of Lot 5- A were made for profit but claimed that it acquired said property for the site of its mission or the Apostolic Nunciature in the
Philippines. Private respondent failed to dispute said claim.
Under Art.31(A) of the 1961 Vienna Convention on Diplomatic Relations, a diplomatic envoy is granted immunity from the civil and
administrative jurisdiction of the receiving state over any real action relating to private immovable property situated in the territory of
the receiving state which the envoy holds on behalf of the sending state for the purposes of the mission. If this immunity is provided
for a diplomatic envoy with all the more reason should immunity be recognized as regards the sovereign itself, which in this case is
the Holy See.
Moreover the Department of the Foreign Affairs has formally intervened and officially certified that the Embassy of the Holy See is a
duly accredited diplomatic missionary to the Republic of the Philippines and as such is exempt from local jurisdiction and entitled to
all the rights, privileges and immunities of a diplomatic mission or embassy in this court.
The determination of the executive arm of the government that a state or instrumentality is entitled to sovereign or diplomatic
immunity is a political question that is conclusive upon the courts. Where the plea of immunity is reacquired and affirmed by the
executive branch, it is the duty of the courts to accept this claim so as not to embarrass the executive arm of the government in
conducting the countrys foreign relations.

THE DOCTRINE OF STATE IMMUNITY

REPUBLIC VS. VILLASOR
54 SCRA 84 (1973)

FACTS:

A decision was rendered in a Special Proceeding against the Republic of the Philippines thereby confirming the arbitration award of
P1,712,396.40 in favor of respondent corporation. After the decision became final and executory, respondent judge issued an order
directing the sheriff to execute the said decision, and the corresponding alias writ of execution was thus issued.
Hence the sheriff served notices of garnishment with several banks especially the monies due to the AFP in the form of deposits
sufficient to cover the amount mentioned in the writ. PNB and Philippine Veterans Bank received such notice. As certified by the
AFP Comptroller, these funds of the AFP with the said banks are public funds for the pensions, pay, and allowances of its military
and civilian personnel.
The petitioner, in this certiorari and prohibition proceedings, challenges the validity of the Order issued by Judge Villasor declaring
the decision final and executory and subsequently issuing an alias writ of execution directed against the funds of the AFP in
pursuance thereof.

ISSUE:

May the writs of execution and notices of garnishment be sued against public funds?

HELD:

NO. Although the State may give its consent to be sued by private parties, there is corollary that public funds cannot be the object of
garnishment proceedings even if the consent to be sued has been previously granted and the states liability has been adjudged.
Thus in the case of Commission of Public Highways vs. San Diego, such a well-settled doctrine was restated in the opinion of
Justice Teehankee. The universal rule that where the state gives its consent to be sued by private parties either by general or
special law, it may limit claimants action only up to the completion of proceedings anterior to the stage of execution and that the
power of the courts ends when the judgment is rendered, since the government funds and properties may not be seized under writs
of execution or garnishment to satisfy such judgment, is based on obvious considerations of public policy. Disbursement of public
funds must be covered by the corresponding appropriations as required by law. The functions and public services rendered by the
State cannot be allowed to be paralyzed or disrupted by diversion of public funds from their legitimate and specific object is
appropriated by law.

THE DOCTRINE OF STATE IMMUNITY

DEPARTMENT OF AGRICULTURE VS. NLRC
227 SCRA 693 (1993)

FACTS:

The DAR and Sultan Security Agency entered into a contract for security services to be provided by the latter to the said
governmental entity. Several guards of the agency assigned to the petitioners premises filed a complaint for underpayment of
wages, non-payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay, and overtime pay as well as for
damages, before the Regional Arbitration, against the petitioner and the agency. The Executive Labor arbiter rendered a decision
finding the petitioner and the agency jointly and severally liable for the payment of the money claims. The decision became final and
executory. The Labor Arbiter then issued a writ of execution which resulted in the property of the petitioner being levied. The
petitioner asserts the rule of non-suability of the State.

ISSUE:

Can the Department of Agriculture be sued under the contract entered with the agency?

HELD:

YES. The basic postulate under Art. X section 3 of the Constitution that the State may not be sued without its consent is not
absolute for it does not say that the State may not be sued under any circumstances. On the contrary, as correctly phrased, the
doctrine only conveys that the State may not be sued without its consent. Its import then is that the State may at times be sued.
The States consent may be given either expressly or impliedly. Express consent may be made through a general law waiving the
immunity of the State from suit which is found in Act 3083, where the Philippine government consents and submits to be sued upon
any money claim involving liability arising from contract, express or implied, which could serve as basis of civil action between
private parties. Implied consent on the other hand, is conceded when the State itself commences litigation, thus opening itself to
counterclaim or when it enters into a contract.
In this situation, the government is deemed to have descended to the level of the other contracting party and to have divested itself
of its sovereign immunity. The rule relied upon by the NLRC is not, however, without qualification. Not all contracts entered into by
the government operate as a waiver of its non-suability. Distinction must still be made between one which was executed in the

exercise of its sovereign function and another which is done in its proprietary capacity. In the instant case, the petitioner has not
pretended to have assumed a capacity apart from its being a governmental entity when it entered into the questioned contract, not
that it could have in fact performed any act proprietary in character, but be that as it may, the claims of private respondents arising
from the contract for security services clearly constitute money claims for which Act 3083 gives the consent of the state to be sued.
However, when the State gives its consent to be sued, it does not thereby necessarily consent to an unrestricted execution against
it. When the State waives immunity, all it does, in effect, is to give the other party an opportunity to prove, if it can, that the state has
any liability.

THE DOCTRINE OF STATE IMMUNITY

PNB VS. PABALAN
83 SCRA 595 (1978)

FACTS:

A judgment was rendered against Philippine Virginia Tobacco Administration (PVTA). Judge Javier Pabalan issued a writ of
execution followed thereafter by a notice of garnishment of the funds of respondent PVTA which were deposited with the Philippine
National Bank (PNB). PNB objected on the constitutional law doctrine of non-suability of a state. It alleged that such funds are public
in character.

ISSUE: Was the contention of PNB correct?

HELD:

NO. It is to be admitted that under the present Constitution, what was formerly implicit as a fundamental doctrine in constitutional
law has been set forth in express terms: The State may not be sued without its consent. If the funds appertained to one of the
regular departments or offices in the government, then, certainly such a provision would lie a bar to garnishment. Such is not the
case here. Garnishment would lie. The Supreme Court, in a case brought by the same petitioner precisely invoking such doctrine,
left no doubt that the funds of a public corporation could properly be made the object of a notice of garnishment.
It is well settled that when the government enters into commercial business, its abandons its sovereign capacity and is to be treated
like any other corporation. (Manila Hotel Employees Association vs. Manila Hotel Company)

THE DOCTRINE OF STATE IMMUNITY

BUREAU OF PRINTING VS. BUREAU OF PRINTING EMPLOYEES
ASSOCIATION
1 SCRA 340 (1961)

FACTS:

Bureau of Printing Employees Association filed a case against herein petitioners Bureau of Printing, Serafin Salvador, and Mariano
Ledesma. The complaint alleged that Salvador and Ledesma have been engaging in unfair labor practices by interfering with, or
coercing the employees of the Bureau of Printing, particularly the members of the complaining association, in the exercise of their
right to self-organization, and by discriminating in regard to hiring and tenure of their employment in order to discourage them from
pursuing their union activities. Answering the complaint, Salvador and Ledesma denied the charges, and contended that the Bureau
of Printing has no juridical personality to sue and be sued.

ISSUE: Can the Bureau of Printing be sued?

HELD:

NO. As a government office, without any juridical capacity, it cannot be sued.

The Bureau of Printing is an instrumentality of the government; it operates under the direct supervision of the Executive Secretary. It
is designed to meet the printing needs of the government. It is primarily a service bureau. It is obviously not engaged in business or
occupation for pecuniary profit. It has no corporate existence. Its appropriations are provided for in the budget. It is not subject to the
jurisdiction of the Court of Industrial Relations.
Any suit, action or proceeding against the Bureau of Printing would actually be a suit, action or proceeding against the government
itself. The government cannot be sued without its consent, much less over its objection.

THE DOCTRINE OF STATE IMMUNITY

MOBIL PHILS. EXPLORATION, INC. VS. CUSTOMS ARRASTRE
SERVICE
18 SCRA 1120 (1966)

FACTS:

Four cases of rotary drill parts were shipped from abroad consigned to Mobil Philippines. The Customs Arrastre later delivered to the
broker of the consignee three cases only of the shipment. Mobil Philippines Exploration Inc.
filed suit in the CFI against the Customs Arrastre Service and the Bureau of Customs to recover the value of the undelivered cases
plus other damages.
The defendants filed a motion to dismiss the complaint on the ground that not being a person under the law, defendants cannot be
sued.
After the plaintiff opposed the motion, the court dismissed the complaint on the ground that neither the Customs Arrastre Service nor
the Bureau of Customs is suable.

ISSUE: Can the Customs Arrastre Service or the Bureau of Customs be sued?

HELD:

NO. The Bureau of Customs, acting as part of the machinery of the national government in the operations of arrastre service,
pursuant to express legislative mandate and a necessary incident of its prime governmental function, is immune from suit, there
being no statute to the contrary.
The Bureau of Customs has no personality of its own apart from that of the government. Its primary function is governmental, that of
assessing and collecting lawful revenues from imported articles and all other tariff and customs duties, fees, charges, fines, and
penalties. To this function, arrastre is a necessary incident. Although said arrastre function is deemed proprietary, it is necessarily an
incident of the primary and governmental function of the Bureau of Customs, so that engaging in the same does not necessarily
render said Bureau liable to suit. For otherwise, it could not perform its governmental function without necessarily exposing itself to
suit. Sovereign immunity granted as to the end should not be denied as to the necessary means to that end.