C.

STATE IMMUNITY FROM SUIT

Test to Determine if Suit is against the state

Begoso v. PVA

Facts: Plaintiff sought the aid of the judiciary to obtain the benefits to which he believed he was entitled
under the Veterans’ Bill of Rights. He filed his claim for disability pension on March 4, 1955
but was erroneouslydisapproved on June 21, 1955 due to his dishonorabledischarge from the army. The
Board of Administrators of PVA finally approved his claim on September 2, 1964,entitling him with a
pension of P30 a month, to take effect on October 5 of that year. Believing that his pension should have
taken effect back in 1955 when his claim was disapproved, and that he is entitled to a higher pension of
P50 (RA No. 1362amendingSection 9 of RA No. 65) as a permanently incapacitated person, which was
increasedtoP100 a month when RP 1362 was amended by RA No. 1920 on June 22, 1957,Begosafiled a
case against PVA in the Court of First Instance. CFI ruled in favor plaintiff. Defendants claim that the
plaintiff has not exhausted all administrative remedies before resorting to court action and that the
plaintiff’s claim is in reality a suit against the Government which cannot be entertained by this Court for
lack of jurisdiction because the Government has not given its consent.

Issue: WON the SC can entertain the suit against PVA.

Held: Yes. Ratio: Where a litigation may have adverse consequences on the public treasury, whether in
the disbursements of funds or loss of property, the public official proceeded against not being liable in
his personal capacity, then the doctrine of non-suitability may appropriately be invoked. However, it has
no application where the suit against such a functionary had to be instituted because of his failure to
comply with the duty imposed by statue appropriating public funds for the benefit of plaintiff.
Also, where there is a stipulation of facts, the question before the lower court being solely one of law
and on the face of the decision, the actuation of appellants being patently illegal, the doctrine of
exhaustion of administrative remedies certainly does not come into play.

Del Mar v. PVA

FACTS 1.Petitioner filed a petition for mandamus against respondent to compel the latter to
continuepaying him his monthly life pension of P50 from March 1950 (when it was cancelled) to June20,
1957 and from June 22, 1957, his monthly life pension, as increased by Republic Act 1920,of P100, and
to pay to him as well the monthly living allowance of P10 for each of hisunmarried minor children below
eighteen years of age, pursuant to the said Republic Act1920 which took effect on June 22, 1957. Del
Mar also asked for compensatory, moral andexemplary damages.
2. Petitioner averred that
a. he served during World War II as chief judge advocate of the Cebu Area Command(a duly recognized
guerrilla organization) with the rank of major;
b. that he subsequently obtained an honorable discharge from the service onOctober 20, 1946 on a
certificate of permanent total physical disability;
c. that upon proper claim presented and after hearing and adjudication, thePhilippine Veterans Board
(the PVA's predecessor) granted him a monthly lifepension of P50 effective January 28, 1947;
d. that in March 1950, the said Board discontinued payment of his monthly life pension on the ground
that his receipt of a similar pension from the United States Government, through the United States
Veterans Administration, by reason of military service rendered in the United States Army in the Far East
during WorldWar II, precluded him from receiving any further monthly life pension from the Philippine
Government;
e. that he wrote the said Board twice, demanding that it continue paying his monthly life pension,
impugning the cancellation thereof as illegal; and that his demandswent unheeded.

3.Respondent contended that

a.petitioner is barred from claiming and receiving since he is also receiving similarpension from the US
b. it is discretionary on its part to grant or discontinue the pension sought by del Mar.
c. alleged that the action of del Mar was premature because of his failure to exhaustadministrative
remedies before invoking judicial intervention
d. PVA cannot be sued because it is an government agency
4.Trial court ruled in favor of petitioner granting his prayers except for compensatory, moraland
exemplary damages.
5. Hence the petition by the respondent

ISSUE
2. Whether or not PVA can invoke State Immunity

RULING
2. No, state immunity can be invoked. Is the PVA exempt from the filing of an appeal bond? To resolve
this issue, we must initially determine whether the PVA is an agency or instrumentality of the Republic
of the Philippines, and, in the affirmative, whether it exercises governmental functions. As a general
proposition, the rule well-settled in this jurisdiction on the immunity of the Government from suit
without its consent holds true in all actions resulting in "adverse consequences on the public treasury,
whether in the disbursements of funds or loss of property." Needless to state, in such actions, which, in
effect, constitute suits against the Government, the court has no option but to dismiss them
Nonetheless, the rule admits of an exception - it finds no application where a claimant institutes an
action against a functionary who fails to comply with his statutory duty to release the amount claimed
from the public funds already appropriated by statute for the benefit of the said claimant. As clearly
discernible from the circumstances, the case at bar falls under the exception.

Veterans Manpower v. CA

Veterans Manpower and Protective Services, Inc. (VMPSI) alleges that the provisions under Section 4
and 17 of Republic Act No. 5487 or the Private Security Agency Law violate the 1987 Constitution against
monopolies, unfair competition and combinations in restraint of trade, and tend to favor and
institutionalize the Philippine Association of Detective and Protective Agency Operators, Inc. (PADPAO)
which is monopolistic because it has an interest in more than one security agency.

Respondent VMPSI likewise questions the validity of paragraph 3, subparagraph (g) of the Modifying
Regulations on the Issuance of License to Operate and Private Security Licenses and Specifying
Regulations for the Operation of PADPAO issued by then PC Chief Lt. Gen. Fidel V. Ramos, through Col.
Sabas V. Edades, requiring that “all private security agencies/company security forces must register as
members of any PADPAO Chapter organized within the Region where their main offices are located...”.
As such membership requirement in PADPAO is compulsory in nature, it allegedly violates legal and
constitutional provisions against monopolies, unfair competition and combinations in restraint of trade.

A Memorandum of Agreement was executed by PADPAO and the PC Chief, which fixed the minimum
monthly contract rate per guard for eight (8) hours of security service per day at P2,255.00 within Metro
Manila and P2,215.00 outside of Metro Manila.

Odin Security Agency (Odin) filed a complaint with PADPAO accusing VMPSI of cut-throat competition by
undercutting its contract rate for security services rendered to the Metropolitan Waterworks and
Sewerage System (MWSS), charging said customer lower than the standard minimum rates provided in
the Memorandum of Agreement dated May 12, 1986.

PADPAO found VMPSI guilty of cut-throat competition, hence, the PADPAO Committee on Discipline
recommended the expulsion of VMPSI from PADPAO and the cancellation of its license to operate a
security agency. The PC-SUSIA affirmed the findings and likewise recommended the cancellation of
VMPSI’s license. As a result, PADPAO refused to issue a clearance/certificate of membership to VMPSI.

VMPSI made a request letter to the PC Chief to set aside or disregard the findings of PADPAO and
consider VMPSI’s application for renewal of its license, even without a certificate of membership from
PADPAO.

ISSUE: Whether or not VMPSI’s complaint against the PC Chief and PC-SUSIA is a suit against the State
without its consent.
HELD: Yes. A public official may sometimes be held liable in his personal or private capacity if he acts in
bad faith, or beyond the scope of his authority or jurisdiction, however, since the acts for which the PC
Chief and PC-SUSIA are being called to account in this case, were performed as part of their official
duties, without malice, gross negligence, or bad faith, no recovery may be had against them in their
private capacities. Furthermore, the Supreme Court agrees with the Court of Appeals that the
Memorandum of Agreement dated May 12, 1986 does not constitute an implied consent by the State to
be sued. The consent of the State to be sued must emanate from statutory authority, hence, a legislative
act, not from a mere memorandum. Without such consent, the trial court did not acquired jurisdiction
over the public respondents. Petition for review is denied and the judgment appealed from is affirmed
in toto.