lWl 27

26 ATENEO LAW JOURNAL VOLXXXN

STATE. IMMUNITY FROM SUIT
CONCLUSION
JACINTO D. JIMENEZ•
To go back then to our original question: May President Corazon
Aquino run for re-election in 1992 or even 1991? Let me simply conclude by
saying that the prohibition against re-election is meant for humans. And our L IN1RODUCTION
Constitution envisions that all our Presidents, present and future, are and will
be humans. To many, the doctrine of State immunity from suit is an anachronistic
remnant of the days of monarchy which continues to bedevil modern
democracies. However, this principle has been inscribed in the 1987
Constitution. Adopting 16, Article XV of the 1973 Constitution,
Section 3, Article XVI of the 1987 Constitution provides: "The State may not
be sued without its consent."
The prior Organic Acts of the Philippines from the Instructions of
President William McKinley to the Second Philippine Commission to the 1935
Constitution did not contain a similar provision. However, Section 16, Article
XV of the 1973 Constitution did not.introduce any change in constitutional
principles. It merely made explicit in the Constitution what had been settled
in Philippine jurisprudence. As early as March 1, 1922, the Supreme Court
held in L.S. Moon & Co. v. Harrison 1 that the State cannot be sued without
its consent.

IT. IDSTORICAL BACKGROUND

A England

The origin of the doctrine of sovereign immunity from suit is

enveloped in uncertainty. Some legal historians believe it evolved because of
the structure of the English feudal system. The lord of each manor held court
for his subjects. However, he himself was not subject to the jurisdiction of his
own court but was subject only to the court of a higher noble. Since the king
was at the pinnacle of the feudal he was not subject to any court
and was immune from suit. There was no court above him. The immunity of
the king from suit was due to the belief that was above the law but was

• Lecturer, Ateneo School of Law; Partner, Romulo, Mabanta, Buenaventura,

Sayoc & delos Angeles; Senior Editor, Ateneo Law Journal, 1967; LL.B., Ateneo de
Manila School ofLaw, 196'8
I 43 PhiL 27, 39 (1922).;
 28 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT 29

due to the fact that there was no court above him. 2 Thus, in the thirteenth sued, he would empower his courts to proceed by indorsing on the petition,
century, Henry de Bracton, the English judge and writer on English law, "Let justice be done. "8
believed that the maxim "the king can do no wrong" meant that the king was At the same time, private individuals were allowed to sue officers who
not entitled to do wrong. 3 had committed a wrong. Since the king was· incapable of doing wrong and
With the collapse of the feudal system, the idea of a nation-state could not have authorized it, it was presumed that the officer who committed
developed. As the king retained his superior position he became identified the wrong was acting on his own accord and could be held liable for it. 9
with the sovereignty of the State. 4 The maxim "the king can do no wrong" As early as the reign of Henry III, at the instance of private suitors,
came to mean that the king was incapable of doing wrong. 5 the King's Exchequer could order sheriffs and bailiffs to desist from and
Even when the power of the king declined, the fiction of the unity answer to private individuals for their trespasses. However, the king could
between the king and State persisted. The fact that the king traditionally had shield an officer from liability by claiming the act as his own. Thus, while an
not been sued in court provided a foundation for the doctrine of immunity action could be brought against an officer, no judgment would be given unless
from suit.6 the king disclaimed the act. 10
The immunity of the king from suit created the need to redress the In the reign of Edward I, by virtue of the Statute of Westminster
grievances of the people. I, 1275, a writ of novel disseisin was issued against the officers who if
Upon the death of Henry III, his eldest son, Edward I, ascended to "attainted" were to pay double damages and be "grievously amerced unto the
the English throne in 1274. To give everybody the chance to approach him, king". Thus, one who had been disseised in the name of the king could
he ordered that those who had complaints or requests should come to court recover his land by bringing an action against the erring officer. By the Statute
when Parliament convened and petition for relief. Out of this grew the of Westminster II,1287, sheriffs who imprisoned a person for a felony without
practice of submitting petitions of right. The petitions were studied by special indictment could be sued for false imprisonment. The permission ofthe king
commissions, the Privy Council, or the Chancellor. If the Chancellor to sue officers outside the Courts of Exchequer was still needed, but the
decided that the petitioner had a right, he ordered that justice be done. If privilege was gradually waived as to lower officers. 11
determination of the claim involved ascertainment of facts, the petition was
tried by a commission of a department and, if necessary, was sent to the Court
of Exchequer, the Chancery, or the King's bench. 7 B. America
A petition rather than a writ was required because it would have been
absurd for the king to issue a writ against himself. Since the king could not be Although the State has replaced the Engiish King as sovereign, the
idea that the State is immune from suit was transplanted in American
jurisprudence.n
2
Pugh, Historical Approach io the Doctrine of Sovereign Immunity, 13 LA. L. The remedy of petition of right was never introduced in the Thirteen
REV. 447-478 (19S3) [hereinafter cited as Approach]; Immunity, 15 CLEV. MAR. L. Colonies. Instead, claims upon the government were commonly presented by
REV. at 259 (1966); Remedies against the United States and its Officers, 70 HARv. L. petitions to the legislature. 13
REV. at 829 (1957) [hereinafter cited as Remedies].
3
Pugh, Approach, Supra note .2 at 478; Remedies, Supra note 1, at 829; Jaffe,
JUDICIAL CoNTROL OF ADMINIS1RATIVE ACTION 199 (1965) (hereinafter cited as 8
CON1ROL). JAFFE, CONTROL, Supra note 3, at 198-199; U.S. v. Lee, 16 Otto 196, 229-238
4
(1882).
Jaffe, CON1ROL at 199 9 . 0
5
JAFFE, CONTROL, Supra note 3, at 198-199; Remedies, Supra note 2, at 83 ·
Pugh, Approach, Supra note 2 at 479; Remedies, Supra note 2, at 830; 1 10
BLACKSTONE, COMMENTARIES ON TilE LAWS OF ENGLAND, at 246-247 (1915). JAFFE, CONTROL, Supra note 3, at 204.
6 11 !d.
Remedies, Supra note 1, at 830.
12
7
JAFFE, CON1ROL, Supra note 3, at 200-201; Pugh, Approach, Supra note 2, at PROSSER AND KEETON, THE LAW ON TORTS, at 1033 (5th ed., 1987).
13
.479. United States v. Lee, 16 Otto 196, 238-39 (1882).
 30 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT 31

After the United States wrested its independence from England, the by citizens or subjects of any foreign State."19
States were worried during the adoption of the United States Constitution This proposal was. swiftly ratified by three-fourths of the States and
that they would be financially ruined if they would be sued before the federal became the Eleventh Amendment. 20
courts for the payment of the huge debts they had incurred in prosecuting the Although the United States Supreme Court first formulated the
War of Independence. 14 Alexander Hamilton tried to allay their fears by doctrine of State immunity from suit in 1812 in the case of the Schooner
writing in the Federalist Papers: Exchange v. M'Fadden, 21 that case referred to a foreign country. It was in
1821 that the United States Supreme Court first mentioned the doctrine of
It is inherent in the. nature of sovereignty not to be State immunity from suit with reference to the United States in the case of
amenable to the suit of an individual without its consent. This is the Co/ins v. Vzrg!nia. 12 In that case, Chief Justice John Marshall dogmatically
general sense, and the general practice of mankind; and the stated: ''The u'niversally received opinion is that no suit can be commenced or
exemption, as one of the attributes of sovereignty, is now enjoyed prosecuted against the United States; and the Judiciary Act does· not
by the government of every state of the Union. Unless, therefore, authorize such suits."23
there is a surrender of this immunity in the plan of the convention, Since then the doctrine has become deeply rooted in American
it will remain with the states. The contracts between a nation and
· jurisprudence.
individuals are only binding on the conscience of the sovereign and
have no pretension to compulsive force. They confer no right of
action independent of the sovereign will. 15
Ill. JUSTIFICATION FOR THE DOCfRINE
Likewise, in arguing for the ·ratification of the United States
Constitution, James Madison pointed out: "It is not in the power of individuals Various reasons with varying degrees of persuasiveness or lack of it
to call any state into court."16 have been advanced as bases for the principle of State immunity from suit.
However, in 1793, in the case of Chisolm v. Georgia/1 the United
States Supreme Court held that the two citizens of South Carolina could sue 1. The immunity of a State from suit without its consent is inherent
the State of Georgia for payment of a debt. in sovereignty.24
This decision provoked such an angry reaction in Georgia that the 2. The State can do no wrong. 25· This reason seems to be a carry-over
House of Representatives of Georgia passed a law punishing any attempt to ·of the principle that the king was incapable of doing wrong and was immune
eXCCUte the deciSiOn with death by hanging WithOUt benefit Of clergy. 18 from suit, as he became identified with the sovereignty· of the State. Since
The decision also alarmed the States. As a result, on September 5, there is no king in a democracy, it is the State which has come to be identified
1794, the United States Congress proposed the following amendment to the with
United States Constitution: "The judicial power of the United States shall 3. The immunity of the State from suit without its consent is intended
not be construed to extend to any suit in law or equity, comrilenced or to prevent the indignity of subjecting the State "to the coercive process of
prosecuted against one of the United States by citizens of another State, or

19
Cohens v. Virginia, 6 Wheat 264; 406 (1821).
20
Larsons v. Domestic and Foreign Commerce COrporation, 337 U.S. 682. 708
14
Pugh, Approach, Supra note 2, at 481. (1949); Pugh, Approach, Supra note 2, at 485.
15
Federalist Papers No. 81. 21
7 Cranch 116.
16
3 ELLIOT, DEBA1ES IN TilE SEVERAL STATE CONVENTIONS ON TilE ADOPTION . 12
6 Wheat 264.
OF TI-IE FEDERAL CONSTIJUTION 533 (1937).
23
17 /d. at 406.
2 Dall. 419.
18
24
Love v. Filtsch, 124 P 30, 32 XOkla. Sup. Ct. 1912).
GUNTIIER, CASES AND MA1ERIALS ON CONSTITUTIONAL LAW 47 (lOth ed.,
25
. 1980). Santos v. Santos, 92 Phil. 281, 283 (1952) .
 32 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT .33
26
courts at the instance of private parties. This reason is questiomible. The State from suit. 30

State regularly appears as a party before its courts and submits to the 8. Since the State represents the people, if they were to sue the State
jurisdiction of its courts whenever it files a case. Yet, this is not considered they would in ef(ect be suing themselves. 31 It is difficult to see the tenability
degrading.. . of this reasoning.A principal can sue his agent, and the principal will not be
4. There can be no legal right against the authority that makes the law. deemed as suing hltnself.
on which the right depends. 27 Since it is the State which is the source of the 9. Since the courts are mere agents of the State, they cannot exercise
right to sue, it would be absurd to subject the State to suit. authority over the State, who is "their principal.
5. The State does not undertake to guarantee to any person the.
fidelity of the officers and agents it employ:;, since that would involve it in all
its operations in endless embarrassments, difficulties, and losses, which would N. SUITS AGAINSf niE STATE
be subversive of the public iriterest. 28
6. Public service will be hindered and public safety will be endangered A Instances of Suits against the State
if the State can be sued at the instance of everyone. The State will thus be
controlled in the us.e and disposition of the required for the proper Jurisprudence has mapped out the instances when an action may be
administration of the governmeqt. Its time .a:nd the energy will be dissipated considered a sujt against the State without its consent.
in endless suits against it. This is 'Subversive of public interest. 29
7. By forming a State. the people undertake to surrender some of their ·
private apd interests which are calculated to conflict with the higher 1. Fmancial Liability
rights and interests of the people as a whole, represented by the State. One
of those higher rights based upon those larger interests is the immunity of If a judgment in a suit will result in a financial liability on the part of
the State, the action is a suit against the State.32 Thus, in the following cases,
the action was deemed a suit against the State because of the nature of the
relief sought:
26
Fitts v. McGhee, 172 U.S. 516, 528 (1899).,
27
American Insurance Co. v. Macon dray & ,CO., Inc., 127 Phil. 527, 533 (1967); 30
Firemen's Fund Insurance Co. v. United States Lines Co.,31 SCRA 309, 311 (1970); Metropolitan Transportation Service v. Paredes, 79 Phil. 819, 826 (1948).
General Insurance Co., Ltd. v. Republic, 32 SCRA 227, 229 (1970), 31
/d. at 826-827.
Rep:ublic v. Villasor, 54 SCRA 84, 86 (1973); Republic(. Purisima, 78 SCRA 470, 32
472(1977); Santiago v. Republic, 87 SCRA 294,298 (1978); Malayan Insurance Co. Metropolitan Transportation Service v. Paredes, 79 Phii. 819, 823 (1948);
v. Smith, Bell & Co. (Phil.), Inc., 101 SCRA 61, 64 (1980); Malong v. Philippine Syquia v. Lopez, 84 Phil. 312, 319 (1949); Marvel Building Corporation v. Philippine
Narionai Railway, 138 SCRA 63, 66 (1985); Sanders v. Veridiano, 162 SCRA 88, 96 War Damage Commission, 85 Phil. 27, 32 (1949); Lim v, Nelson, 87 Phil. 328, 331
0990); Republic v. Court of Appeals, 182 SCRA 721, 728 (1990). (1950); Rupertov.Moore, 91 Phil. 185, 188 (1952); Parreno v. McGravery, 92 Phil.
791, 793 (1953); Treasurer of the Philippines v. Encarnacion, 93 Phil. 610, 612-613
Merritt v. Government of the Philippine Islands, 34 Phil. 311, 317 (1916). (1953); Johnson v. Turner, 94 Phil. 807, 81t (1954); Republic v. De Leon, 101 Phil.
29
American Insurance Co. v. Macondray & Co., Inc., 127 Phil. 527, 533 (1967); 773, 778 (1957); Roldan v. Philippine Veterans Board, 105 Phil. 1081, 1085 (1959);
Providence Washington Insurance Co. v. Republic, 29 SCRA 598, 603 (1969); Lim v. Brownell, 107 Phil. 344, 350 (1960); New Manila Lumber Co., Inc. v.
Phoenix Assurance Co. v. Republic, 30 SCRA 194, 196 (1969); Firemen's Fund Republic, 107 Phil. 824, 830 (1960); Garcia v. Chief of Staff, 122 Phil. 1199; 1201
Insurance Co. v. United States lines Co., 31 SCRA 309, 311-12 (1970); Switzerland (1966); Republic v. Ramolete, 124 Phil. 348, 357 (1966); Equitable Insurance &
General Insurance co:, Ltd. ·V. Republic, 32 SCRA 227, 229 (1970); Republic v. Casualty Co., Inc. v. Smith, Bell & Co. (Phil.), Inc., 127 Phil. 547, 548 (1967); Begosa
Villasor, 54 SCRA 84, 86-87 q1973); Republic v. Ptirisima, 78 SCRA 470, 473 (1977); v. Chairman, Philippine Veterans Administration, 32 SCRA 466, 471 (1970);
Santiago v. 87 SCRA 294, 298 (1978); Malayan Insurance Co. v. Smith, Ministerio v.. Court of First Instance of Cebu, 40 SCRA 464, 468 (1971); Isberto v.
Bell & Co. (Phil.), Inc., 10,1 SCRA 61, 64 (1980); Malong v. Philippine National Raquiza, 67 SCRA 116, 120 (1975); Sanders v. Veridiano, 162 SCRA 88, 98 (1988);
. Railway, 138 SCRA 63, 66 (19S5). Shauf v. Court of Appeals, G.R. No. 90314 (November 27, 1990).
 ' .
34 · ·AtENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT ·35
..
33
"(1{ . Recovery of excess payment of interest; On the other hand, where funds have been appropriated for a specific
(2) Payment of reward for being an informer; 34 purpose, such as the payment of disability pensions, and the public officer in
(3) Payment of back rentals; 35 charge of releasing the funds refuses to do so, an action to compel him to
(4} Payment for value of seized motor launch and its disburse the funds is not a suit against the State. 47 The State has no interest
use; 36 in those funds.
(5) Payment of back wages; 37 Likewise, where funds have been appropriated to pay for a contract
(6) Payment from proceeds of sale of seized enemy and there is a dispute as to who between two contending parties is entitled to
property; 38 payment, an action to collect payment is not a suit against the State. 48
(7) Redemption of bank notes; 39 Similarly, an action by a government official or employee who has
(8) Payment of money value of confiscated savings been illegally removed from office for reinstatement to his position and for
money;40 recovery of back wages will not be considered a suit against the State if the
(9) Payment of construction materials; 41 national budget contains an appropriation for salaries pertaining to the
(10) Payment of disability benefits;42 government office where he works. A judgment in his favor will not require
(11) Payment of pension; 43 the appropriation ofmoney. 49 However, if the salaries have already been paid
(12) Payment of lost cargo; 44 to the successor of the ousted public officer, he can no longer sue the State
(13) Just compensation for expropriated property; 45 for payment of back wages. This will require an appropriation from
(14) Claim for damages. 46 Congress.50

33
Salgado v. Ramos, 64 Phil. 724 (1937). 2 Public Property
34
Bull v. Yatco, 67 Phil. 728 (1939).
If an action will involve property in which the State claims to have an
35
Syquia v. Lopez, 84 Phil. 312 (1949); Marvel Building Corporation v. interest, such as ownership or possession, the suit is against the State. 51 Thus,
Philippine War Damage Commission, 85 Phil. 27 (1949); Lim v. Brownell, 707 Phil. a petition questioning the revocation of a timber license which was invalidly
334 (1960). granted was considered a suit against the State. 52 Similarly, an action filed to
36
Lim v. Nelson, 87 Phil.328 (1950). recover ownership of a piece of land on the basis of the claim of the plaintiff
37
Ruperta v. Moore, 91 Phil. 185 (1952); Roldan v. Philippine Veterans Board, that he held an infonnacion posesoria over it was considered a suit against the
109 Phil. 1081 (1959); Isberto v. Raquiza, 67 SCRA 116 (1975).
38
Parreno v. McGravery, 92 Phil. 491 (1953). 47
Begosa v. Chairman, Philippine Veterans Administration, 32 SCRA 466, 471-
39
Treasurer of the Philippines v. Encarnacion, 93 Phil. 610 (1953). 72 (1966); Teoxon v. Members of the Board of Administrators, 33 SCRA 585, 591
40
Johnson v. Turner, 94 Phil. 807 (1954). (1970); Animas v. Philippine Veterans Affairs Office, 174 SCRA 214, 222 (1989).
48
41 Ruiz v. Cabahug, 102 Phil. 110, 114 (1957); Moreno v. Macadaeg, 117 Phil.
New Manila Lumber Co., Inc. v. Republic, 107 Phil 824 (1960).
713, 718 (1963).
42
Garcia v. Chief of Staff, 122 Phil. 1199 (1966). 49
Pitiero v. Hechanova, 124 Phil. 1022, 1032 (1966).
43
Republic v. Ramolete, 124 Phil. 348 (1966). 50
Roldan v. Philippine Veterans Board, 105 Phil. 1081, 1085 (1959).
44
Equitable Insurance & Casualty Co., Inc. v. Smith, Bell & Co. (Phils.), Inc. 51
Philippine Alien Property Administration v. Castelo, 89 Phil. 568, 573 (1951);
127 Phil. 547 (1967).
Lim v. Brownell, 107 Phil. 344, 350 (1960); Ministerio v. Court of First Instance of
Cebu, 40 SCRA 464, 468 (1971 ); Tan v. Director of Forestry, 125 SCRA 302, 324
45
Ministerio v. Court of First Instance of Cebu, 40 SCRA 64 (1971).
46
Sanders v. Veridiano, 162 SCRA 88 (1988); Republic v. Court of Appeals, 182 (1983); Republic v. Feliciano, 148 SCRA 424, 431 (1987).
52
SCRA 721 (1990). Tan v. Director of Forestry, 125 SCRA 302, 324 (1987).
36 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT 37
53
State. issues raised in the complaint and the effect of the judgment. 57 Thus, the test
should be the result and effect of the judgment. If the case really seeks relief
against the State, the designation of a public officer as the nominal defendant
3. Political Act should be disregarded. 58
If a public officer who is being sued acted in behalf of the government
If the judgment in a case will interfere with the public administration, and within the scope of his authority, the suit against him is actually one
oi will result in compelling the State to perform, or in prohibiting it from against the State itself. 59
performing an act which belongs to it in its political capacity, the suit is one In the following cases, it was held that the suit against a public officer
against the For instance, an alien who::e application for a visa was should be dismissed:
disapproved cannot sue to compel the State to'grant his
' Where the satisfaction of a money judgment will Congress to (1) The seizure of rice by order of the Governor-General
appropriate funds, the suit is an action against the State. Since the pursuant to a law granting the government control over the
appropriation of money involves the exercise of the legislative power of distribution of rice; 60
Congress, which is a political department of the State, it is in (2) The seizure by the provost marshall of scrip money which the
nature.55 holder tried to convert into dollars in violation of military
Since defense is a public function of the State, an action to enjoin the regulations; 61
commander of a military base from interfering with the logging operations of (3) The dismissal of a government employee pursuant to a law
the plaintiff within the military base is a suit against the State.56 prohibiting the hiring of employees who are already fifty-seven
years of age; 62
(4) The revocation of a timber license issued upder the condition
B. Suits against Public Officers that it was subject to cancellation at anytiine; 63
(5) The submission by public officers to their superior of
In many cases, the plaintiff does not sue the State itself. He sues a recommendation against the reinstatement to full-time status
public officer instead. Even if the defendant is not the State but a public
officer, the question of application of the doctrine of State immunity from suit
51
can arise. The State can only act through individuals. A plaintiff cannot evade Transwestern Pipeline Co. v. Kerr-Mcghee Corporation, 492 F. 2d 878, 884
the immunity of the State from suit by suing the proper public official. Hence, (1974); New Mexico v. Regan, 745 F. 2d 1318, 1320 (1984); Thomas v. Pierce, 662
the designation of the party defendant is not controlling. Whether a F. Supp. 519, 523 (1987).
against a public officer is actually a suit against the State depends on tfte 58
Ministerio v. Court of First Instance of Cebu, 40 SCRA 464, 468 (1971);
Sayson v. Singson, 54 SCRA 282, 285-86 (1970); Tan v. Director of Forestry, 125
SCRA 302, 324 (1987).
L. S. Moon & eo: v. Harrison, 43 Phil. 27, 39 (1922); Johnson v. Turner, 94
59

Phil. 807, 811 (1954); Roldan v. Philippine Veterans Board, 105 Phil. 1081, 1085
(1959); Tan v. Director of Forestry, 125 SCRA 302,325 (1987); Sanders v. Veridiano,-
53
Republic v. Feliciano, 148 SCRA 424, 431 (1987). 162 SCRA 88, 96 (1988); United States of America v. Guinto, 182 SCRA 644, 659
54
(1990); Republic v. Court of Appeals, 182 SCRA 721, 728 (1990); Shauf v. Court of
Ruiz v. Cabahug, 102 Phil. 110, 115 (1957); Pifiero v. Hechanova, 124 Phil. Appeals, G.R. No. 90314 (November 27, 1990).
1022, 1032-33 (1966); Baer v. Tizon, 57 SCRA 1, 9 (1974). · 60
55
L.S. Moon & Co. v. Harrison, 43 Phil. 27 (1922).
Ruiz v. Cabahug, 102 Phil. 110, 115 (1957); Roldan v. Philippine Veterans 61
Board, 105 Phil. 1081, 1085 (1959); Pifiero v. Hechanova, 18 SCRA 417, 426-427; Johnson v. Turner, 94 Phil. 807 (1954).
62
United States of America v. Guinto, 182 SCRA 644, 653 (1990). Roldan v. Philippine Veterans Board, 105 Phil. 1081 (1959).
56 63
Baer v. Tizon, 57 SCRA 1, 9 (1974). . Tan v. Director of Forestry; 125 SCRA 302 (1987).
38 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT 39

of a employee who was antagonizing other rule of immunity of the State from suit. In the same tenor, it has
employees and his supervisors;64 been said that an action at law or suit in equity against a State
(6) The dismissal of an employee after his arrest by public officers officer or director of a State department on the ground that, while
for dealing in prohibited drugs; 65 claiming to act for the State, he violates or invades the personal and
The refusal of a director to recognize the unauthorized return property rights of the plaintiff, under an unconstitutional act or
(7)
under an assumption of authority he does not have, is not a suit
of the assistant director, who had been temporarily detaiied to
agains.t the State within the constitutional provision that the State
another office. 66 may not be sued without its consent.
A mere allegation in the complaint that a public officer is being sued Thus, a public officer may be sued for illegally seizing or withholding
in his personal capacity rather than his official capacity will not necessarily the possession of the property of another. Otherwise, the aggrieved owner will
remove him from the protection of the doctrine of State immunity from suit have no redress for the violation of his rights. 70 The same holds true of a
if the application of the doctrine is appropriate. 67 public officer who, while claiming to act in the discharge of his official duties,
On the other hand, In several instances, it has been recognized that committed a quasi-delict. 71 The same is true of military officers who
suit may be prosecuted against a public officer because it is not a suit against committed violations of human rights. 72 Likewise,a school principal could sue
the State. the officials of the Department of Education, Culture and Sports who
improperly refused to reinstate him to his position. 73 It has also been held
that public officers could be sued for damages for discriminating against an
1. Dlegal Acts and Acts beyond the Scope of Authority employee on account of her sex, color and origin. 74

A suit against a public officer who, while claiming to act in the name
of the State, acted illegally or beyond the scope of his authority, is not a suit 2 Unconstitutional Acts
against the state. Since he was acting illegally or beyond the scope of his
authority, it cannot be said that he was acting as an agent of the State.68 A public officer may be sued to enjoin him from enforcing an
In the case of the Director of the Bureau of Telecommunications v. unconstitutional law. 75 If the Bill of Rights cannot be enforced by filing such
Aligaen, 69 the Supreme Court elaborated on this doctrine by saying: an action, the rights guaranteed by the Constitution will be rendered nugatory.
Likewise, a public officer may be sued if the power he is exercising,
Inasmuch as the State authorizes only legal acts by its
officers, unauthorized acts of government officialr,>gr officers are
not acts of the State, and an action against the officials or officers
by one whose rights have been unaided or violated by such acts, for 70
Tan Te v. Bell, 27 Phil. 357, 358 (1914); Syquia v. Lopez, 84 Phil. 312, 319
the protection of his rights, is not a suit against the State within the (1949); Marvel Building Corporation v. Philippine War Damage Commission, 85
Phil. 27, 34 (1949); Lim v. Nelson, 87 Phil. 328, 330 (1950).
71
64 Festejo v. Fernando, 94 Phil. 504, 506 (1954); Sanders v. Veridiano, 162
Sanders v. Veridiano; 162 SCRA 88 (1988).
SCRA 88, 93 (1988); United States of America v. Guinto, 182 SCRA 644, 658
65
United States of America v. Ceballos, 182 SCRA 644 (1990). (1990).
66 72
Republic v. Court of Appeals, 182 SCRA 721 (1990). Aberca v. Ver, 160 SCRA 590, 603 (1988).
67 73
Sanders v. Veridiano, 162 SCRA 88,94 (1988); Republicv. Court of Appeals, Sabella v. Department of Education, Culture and Sports, 180 SCRA 623, 626
182 SCRA 721, 728 (1990). (1989).
68 74
Ministerio v. CFI of Cebu, 40 SCRA 464, 468-69. (1971); Shauf v. Court of Shaufv. Court of Appeals, G.R. No. 90314 (November 27, 1990).
Appeals, G.R. No. 90314 (November 27, 1990). 75
J. M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413, 421-
69
33 SCRA 368, 337-38 (1970). 22 (1970); Sanders v. Veridiano, 162 SCRA 88, 97 (1988).
40 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT . 41

or the · manner he exercises such power in a particular case, is Thus, salaries due government employees cannot be garnished. 81 The
unconstitutional. 76 same holds true of the payment due a supplier of the Bureau of
Telecommunications.82

3. Mandamus VL EXPRESS WAlVER OF IMMUNI1Y FROM SUIT

If a public officer fails to comply with a ministerial obligation imposed The express consent of the State to be sued is given in the form of a
by law, the party in whose favor the obligation was constituted may file a statute. 83 Hence, only Congress can give such consent. 84 The law may be
a
petition for mandamus against him. n Thus, petition for mandamus may be special or general. ·
filed against a public officer with the task of releasing public funds Act No. 2457 authorized E. Merritt to sue the government for
appropriated for the payment of benefits to claimants. 78 damages resulting from collision between his motorcycle and an ambulance
owned by a government hospital. Likewise, Act No. 2630 permitted the
Marine Trading Company, Inc. to sue the government for damages caused by
SCOPE OF PROII.mffiON AGAINST SUING TilE STATE a collision between a launch belonging to it and a scow being towed by a
launch belonging tathe government. Act No. 3083 contained a general waiver
Because of its immunity from suit,the State cannot be compelled to of immunity from. suit. Under Sections 1 and 2 of Act No.· 1083, the
litigate against other parties without its consent. Thus, it cannot be compelled · government consented to be sued on the basi.s of any express or implied
to interplead in an action filed by a private party. 79 contract, should the Insular Auditor fail to decide a claim within two months.
Likewise, public funds in the hands of a public officer due a defendant However, these provisions were repealed by Commonwealth Act No. 327.85
in a lawsuit cannot be garnished. The garnishment will amount to a suit By virtue of Presidential Decree No. 1807, the Philippines waived its
against the State without its consent. 80 Garnishment makes the garnishee a immunity from suit with respect to its foreign debts. Section 1 of Presidential
forced intervenor in the action. Decree No. 1807 reads in part:

In instances where the law expressly authorizes the

Republic of the Philippines to contract or incur a foreign
76
Ludwig v. Western Union Telegraph Co., 2i6 U.S. 146, 159 (1910); Western obligation, it may consent to be sued in connection therewith. The
Union Telegraph Co. v. Andrews, 216 U.S. 165, 166 (1910); Herndon v. Chicago v. President of the Philippines or his duly designated representative
Rock Island & Pacific Railway Co., 218 U.S. 135, 156 (1910); Truax v. Raich, 239 may, in behalf of the Republic of the Philippines, contractually
U.S. 33, 37 (1915); Louisville & Interurban-Railroad Co. v. Greene, 244 U.S. 153, agree io waive any claim to sovereign immunity from suit or legal
159 (1916); Public Service Company of Northern Illinois v. Corboy, 250 U.S. 153, 159
(1916); Sterling v. Constantin, 287 U.S. 378. 393 (1932); Larson v. Domestic &
foreign Commerce Corporation, 337 U.S. 682, 702 (1949). 81
Director of Commerce & Industry v. Concepcion, 43 Phil. 384, 386 (1922);
· n Tan v. Veterans Backpay Commission, 105 Phil. 377, 383 (1959); Sanders v.
Director of Bureau of Printing v. 54 SCRA 324, 331 (1973).
Veridiano, 162 SCRA 88, 97 (1988). 82
78 Pacific Products, Inc. v. Ong, 181 SCRA 536, 544 (1990).
Moreno v. Macadaeg, 117 Phil. 713, 716 (1963); Begosa v. Chairman,
83
Philippine Veterans Administration, 32 SCRA 466, 471-472 (1970); Sanders v. Lim v. Brownell, 107 Phil. 344, 350 (1959); United States of America v.
Veridiano, 162 SCRA 88, 97 (1988); Animos v. Philippine Veterans Administration, Guinto, 182 SCRA 644, 654 (1990).
174 SCRA 214, 222 (1989). 84
Philippine Alien Property Administration v. Castelo, 89 Phil. 568, 577 (1951);
79
Alvarez v. Commonwealth of_. the Philippines, 65 Phil. 302, 313 (1938). Republic v. Purisima, 78 SCRA 470, 474 (1977); Republic v. Feliciano, 148 SCRA
80 424, 431 (1987); United States of America v. Guinto, 182 SCRA 644, 654 (1990).
Director of Commerce & Industry v. Concepcion, 43 Phil. 384, 386 (1922);
85
Director of Bureau of Printing v. Francisco, 54 SCRA 324, 331 (1973); Pacific Carabao, Inc. v. Agricultural Productivity Commission, 35 SCRA 224, 228
Products, Inc. v. Ong, 181 SCRA 536, 543 (1990). (1970).
42 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT 43
·,
proceedings and from set-off, attachment or execution with respect (1) Metropolitan Transportation Service; 94
to its property, and to be sued in any appropriate jurisdiction in (2) Philippine Veterans Board; 95
regard to such foreign obligation. (3) Bureau of Printing; 96
( 4) Bureau of Customs; 97
The Central Bank may be sued. Under Section 4 of the Central Bank
(5) Rice and Com Administration; 98
Act No. 265, as amended, the Central Bank may sue or be sued.86
(6) Board of Liquidators; 99
If a government ageng was vested by law with a juridical personality
(7) Bureau of Telecommunications; 100
separate and distinct from that of the State, it may be sued. A suit against it
will not amount to a suit against the State, since it has a separate juridical
personality. · However, even if the _government is the controlling stockholder of a
corporation, the corporation may be sued. The fact that the government is the
Thus, it has been held that the following government entities may be controlling stockholder of the corporation does not clothe the corporation
with immunity from suit. 101 · · .
sued, beca'use they have a separate juridical personality:
Congress can subject the consent of the State to be sued to certain
conditions. In such case, the plaintiff must show that he has complied with all
(1) Postal Savings Bank;87
(2) Metropolitan Water District;88 the conditions for the consent to be sued. 102 The conditions must be
complied with strictly. 103
(3) Philippine Normal College;89
(4) SOcial Security System;90 The consent to be sued, once given, can be withdrawn. 104 The
(5) Philippine National Bank; 91
(6) National Power Corporation; 92
(7) National Irrigation Administration;93
94
Metropolitan Transportation Service v. Paredes, 79 Phil. 819, 823 (1948).
On the other hand, if a government agency has no personality 95
Roldan v. Philippine Veterans Board, 1.05 Phil. 1081, 1084 (1959).
separate and distinct from that of the State, a suit against it is actually a suit 96
against the State. Bureau of Printing v. Bureau of Printing Employees Association, 110 Phil.
Thus, it has been held that the following government offices cannot 952, 957 (1961 ).
Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, 125 Phil. 270,
97
be sued, because they have no separate juridical personality:
277 (1966).
98
Republic v. Purisima, 78 SCRA 470, 474 (1977).
86 99
CeQtral Azucarera Don Pedro v. Central Bank, 104 Phil. 598, 603 (1958); Philippine Rock Industries, Inc. v. Board of Liquidators, 180 SCRA 171, 174
Arcega v. Court of Appeals, 66 SCRA 229, 232 (1975). (1989).
87
Stiver v. Dizon, 76 Phil. 725, 728 (1946). 100
Pacific Products, Inc. v. Ong, 181 SCRA 536, 544 (1990).
88
Metropolitan Water District v. Court of Industrial Relations, 91 Phil. 840, 843 101
Government ofthe Philippine Islands v. Springer, 50 Phil. 259, 288 (1927).
(1952). 102
89
Compai1.ia General de Tabacos v. Government of the Philippine Islands, 45
Berrnoy v. Philippine Normal College, G.R. No. L-8670 (May 18, 1956). Phil. 663, 666 (1924); Salgado v. Ramos, 64 Phil. 724, 728 (1937); Bull v. Yatco,
90
Social Security System Employees Association v. Soriano, 117 Phil.1038, 1043 Phil. 728, 723 (1939); Philippine Alien Property Administration v. Castelo, 89 Phil.
(1963); Social Security System v. Court of Appeals, 120 SCRA 707, 717 (1983). 568, 573 (1951); Harry Lyons, Inc. v. United States, 104 Phil. 593, 598 (1958);
91 Insurance Company of North America v. Republic, 128 Phil. 488, 489 (1967).
Republic v. Philippine National Bank, 121 Phil. 26, 29 (1965). 103
92
Soriano v. United States, 352 US. 270, 276 (1957); Lehman v. Nakshian, 453
Rayo v. Court of First Instance of Bulacan, 196 Phil. 572, 576 (1981). U.S.156, 161 Block v. North Dakota, 461 U.S. 273, 287 (1983).
93
Fontanilla v. Maliaman, G.R. No. 5563 (February 27, 1991). 104
Paretl.o v. McGravery; 92 Phil. 791, 794 (1953).
 44 ATENEO LAW JOURNAL VOL XYJ<V 1991 IMMUNrTY FROM SUIT . 45

withdrawal may be made at any time. 105 immunity. It puts on the garb of an ordinary individual, becomes subject to the
Laws waiving the immunity of the State from suit must be construed rules binding upon private business enterprises, and becomes amenable to
strictly and should not be expanded liberally. 100 The consent of the State to suit. 110
be sued be expressed unequivocally. 107 Thus, if the State consented to
be sued for the recovery of property, the consent should not be interpreted
as including the recovery of dainages for the use of the property. 108 1. Constituent and Ministrant Function
However, when the consent to be sued is given without qualification,
the waiver is not limited to actions for breach of contract but includes actions To determine whether or not a governmental agency is amenable to
for the commission of quasi-delicts. 109 suit, it is important to find out if it is performing constituent or ministrant
functions.
In Bacani v. National Coconut Corporation, 111 the Supreme Court
VII.IMPLIED WAIVER OF IMMUNTIY FROM SUIT enumerated the constituent functions as follows:

It is in the case of implied waiver of the State immunity from suit that (1) The keeping of order and providing for the protection of persons
numerous controversies have arisen. Decisions in this field have not been and property from violence and robbery;
consistent. However, from the tangle of decisions, certain principles can be (2) The ftxing of the legal relations between man and wife and between
drawn. · parents and children;
(3) The regulation of the holding, transmission, and interchange of
property, and the determination of its liabilities for debt or crime;
(4) The determination of contract rights between individuals;
A Proprietary Functions (5) The definition and punishment of crime;
(6) The adminisiration of justice in civil cases;
When the State engages in business, it divests itself of its sovereign (7) The determination of the political duties, privileges, and relations
of citizens; and
(8) Dealings of the State with foreign powers; the preservation
105
Beers v. Arkansas, 20 How. 527, 529 (i858); Baltzer v. North Carolina, 161 of the State from external danger or encroachment and the
U.S. 240, 243 (1896); Lynch v. United States, 292 U.S. 571, 582 (1934); Maricopa advancement of its international interest.
County v. Valley National Bank of Phoenix, 318 U.S. 357, 362. (1943).
106
Compa11ia General de Tabacos v. Government of the Philippine Islands, 45
· Phil. 663, 666 (1924); Mobil Philippines Exploration, Inc. v. Customs Arrastre
110
Service, 125 Phil. 270, 279 (1966); Equitable Insurance & Casualty Co., Inc. v. Smith, Manila Hotel Employees Association v. Manila Hotel Co., 73 Phil. 374, 389
Bell & Co. (Philippines), Inc., 127 Phil. 547, 549 (1967); Insurance Company of . (1941); National Airports Corporation v. Teodoro, 91 Phil. 203, 206 (1952); Santos
North America v. Warner, Barnes & Co., Ltd., 128 Phil. 807 (1967); Firemen's Fund v. Santos, 92 Phil. 281, 285 (1952); Price Stabilization Corporation v. Court of
Insurance Co. v. Maersk Line Far East Service, 137 Phil. 344, 347 (1969); Providence Industrial Relations, 102 Phil. 515, 523 (1957); National Development Co. v. Tobias,
Washington Insurance v. Republic, 30 SCRA 536, 538 (1969). 117 Phil. 703, 705 (1963); National Development Co. v. NDC Employees and
107
United States v. Testan, 424 U.S. 392, 399 (1976);United States v. Mitchell, Workers' Union, 66 SCRA 181, 184-85 (1975); Philippine National Bank v. Court
445 U.S. 535, 538 (1980); Leh,man v. Nakshian, 453 U.S. 156, 160 (1981); Pennhurst of Industrial Relations,. 81 SCRA 314, 319 (1978); Philippine National Bank v.
State School & Hospital v. Halderman, 465 U.S. 89, 99 (1?84). Pabalan, 83 SCRA 595, 600 (1978); Philippine National Railway v. Union de
108
Maquinistas, Fogoneros y Motormen, 84 SCRA 223, 226 (1978); Malong . v.
Philippine Alien Property Administration v. Castelo, 89 Phil. 568, 574 (1951); Philippine National Railway, 138 SCRA 63, 67 (1985); Civil
Lim v. Brownell, 107 Phil. 344, 351 (1960). Administration v. Court of Appeals, 167 SCRA 28, 37 (1988); Rizal eonunerCJal
109
Rayo v. Court of First Instance of Bulacan, 196 Phil. 572, 576 (1981); Social Banking Corporation v. De Castro, 168 SCRA 49, 60 (1988); United States of
Security System v. Court of.Appeals, 120 SCRA 707, 717 (1983); Civil Aeronautics America v. Rodrigo, 182 SCRA 644, 661 (1990).
111
Administration v. Court of Appeals, 167 SCRA 28, 35 (1988). 100 Phil. 468, 472(1956).
46 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT 47

However, in the case of the Credit and Cooperative ( 6) Defense118 .

Financing Administration v. Confederation of Unions in Government (7) Administration of pensions for war veterans 119
Corporations and Offices, 112 the Supreme Court held that this enumeration (8) Collection of taxes120
is obsolete. The Supreme Court reasoned out: (9) Implementation of land reform 121
(10) Improvement of the economic conditions of tobacco
The growing complexities of modern society, however, have farmers 122
rendered this traditional of the functions of (11) Implementation of low-cost housing program 123
government quite unrealistic, not to say obsolete. The areas which (12) Liquidation of the Reparations Commission 124
used to be left to private enterprise and initiative and which the (13) Promotion of tourism 125
government was called upon to enter optionally, and only because
it was better equipped to administer for the public welfare than is
any private individual or group of individuals, continue to lose their
well-defined boundaries and to be absorbed within activities that the
government must undertake in its sovereign capacity if it is to meet ., On the other hand, it has been held that the following functions are
the increasing social challenges of the times. Here as almost proprietary:
everywhere else the tendency is undoubtedly towards a greater
socialization of economic forces. (1) Operation of a hotel126
(2) Banking1%7
Today the State is not limiting its role to maintaining peace and order.
It also undertakes social and economic activities.
Thus, it has been held that the following fmictions are governmental:

(1) Stabilization of the price of palay, rice and corn 113

(2) Education 114 118
Republic v. Philippine National Bank, 121 Phil. 26, 29 (1965).
(3) Construction and maintenance of roads 115 119
(4) Collection and disposal of garbage 116 Republic v. Remolete, 124 Phil. 348, 356-57 (1966).
120
(5) Printing for the government 117 Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, 125 Phil. 270,
277 (1966).
121
AgriCultural Credit & Cooperative Financing Administration v. Confederation
of Unions in Government Corporations and Offices, 30 SCRA 649, 662 (1969).
112
30 SCRA 649, 662 (1969). 122
Philippine Virginia Tobacco Administration v. Court of Industrial Relations,
113
Tabora v. Montelibano, 98 Phil. 800, 806 (1956); Ramos v; Court of Industrial 65 SCRA 416, 423 (1975).
Relations, 129 Phil. 542, 547 (1967); Republic v.. CFI of Rizal, 99 SCRA 660, 665 ·
123
National Housing Corporation v. Juco, 134 SCRA 172, 180 (1985); People's
(1980). Homesite & Housing Corporation v. Court of Industrial Relations, 150 SCRA 171,
114
Bermoy v. Philippine Normal College, G.R. L-8670 (May 18, 1956); 175 (1987).
University of the Philippines v. Court of Industrial Relations, 107 Phil. 848, 850 124
Philippine Rock Industries, Inc. v. Board of Liquidators, 180 SCRA 171, 175
(1960); University of the Philippines v. Gabriel, 154 SCRA 684, 693 (1987). (1989).
m Palafox v. llocos Norte, G.R. No. L-10659 (January 31, 1958). 125
Yu v. Province of Pangasilian, CA-G.R. No. SP-04967-R (July 1, 1976).
116 126
Department of Public Services Labor Union v. Court of Industrial Relations, Manila Hotel Employees Association v. Manila Hotel Co., 73 Phil. 374, 388-
110 Phil. 927, 929 (1961). 89 (1941).
117 127
Bureau of Printing v. Bureau of Printing Employees Association, 110 Phil. Asociacion Cooperativa de Credito Agricola de Miagao v. Monteclaro, 74
.952, 957 (1961). Phil. 281, 282 (1943); Republic v. Philippine National Bank, 121 Phil. 26, 29 (1965).
 48 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT 49
(3) lnsurance128 2 Profit Motive
(4) Engaging in commercial.and industrial enterprises129
(5) Operation of common carrier130 If a government agency is being operated for the purpose of profit, it
(6) Operation of a restaurant131 • is performing a proprietary function. 136 On the other hand, if a government
(7) Irrigation132 agency was not organized for profit but as a public service, it is performing a
governmental function. 137 In such a case, it makes no difference that it earns
The Supreme Court has repeatedly ruled that the Civil Aeronautics profits from its operation. Its primary purpose is not to earn profits but to
Administration may be sued, even if it has no separate juridical personality, promote the general welfare. For instance, the postal service rendered by the
because it is engaged in the management of the airports, which is a Bureau of Posts is not operated for profit but as a public service. 138
proprietary function. 133 In the earlier case of the National Aitports The Supreme Court repeatedly held that whenever the government
Corporation v. Yanson, 134 the Supreme Court held that the Civil Aeronautics engages in buying and selling rice and corn, it is doing so for the purpose of
Administration is an agency of the government. Since the Civil Aeronautics stabilizing the price of such prime commodities and keeping the price within
Administration is engaged in the promotion of the safety of the travelling the -reach of the common masses. The purpose is not to earn profits. 139
public, it should be considered engaged in the performance of a governmental However, in the case of the Naric Workers Union v. Alvendia, 140 the Supreme
function. In National Airports Corporation v. Teodoro, 135 the Supreme Court Court ruled that such activity is proprietary, because profits can be derived or
tried to explain the different conclusion it reached in Yanson by stating that losses incurred from such activity. This isolated ruling is erroneous.
the latter case involved a labor dispute. Is this a valid basis for making a the Supreme Court previously held that the administration
distinction? Can a function be governmental for one purpose and proprietary of the national irrigation system is a governmental function, because it is being
for another purpose? undertaken primarily for the promotion of the general welfare. 141 However,
in the recent case of Fontanilla v. Maliaman, 142 the Supreme Court held that
.this is a proprietary function, especially since the National Irrigation
Administration charges a fee for its services. The Supreme Court overlooked
the fact that the National Irrigation Administration was not organized for the
128
Abad Santos v. Auditor General, 79 Phil. 176, 190 (1947); Government primary purpose of earning profits.
Service Insurance System v. Castillo, 98 Phil. 876, 879 (1956); Government Service
Insurance System Employees Association v. Alvendia, 108 Phil. 505, 508 (1975);
Social Security System Employees Association v. Soriano, 118 Phil. 1354, 1361
(1983). 136
129 Price Stabilization Corporation v. Court of Industrial Relations, 102 Phil. 515,
National Development Co. v. Tobias, 117 Phil. 703, 705 (1%3); National
523 (1957); U.S. v. Rodrigo, 182 SCRA 644, 661 (1990).
Development Co. v. NDC Employees and Workers' Union, 66 SCRA 181, 184-85
137
(1975); National Development Co. v. Nueva Ecija, 125 SCRA 572, 757 (1983). Agricultural Credit & Cooperative Financing Administration v. Confederation
130
Philippine National Railway v. Union de Maquinistas, Fogoneros y of Union in Government Corporations and Offices, 30 SCRA 649, 660 (1969);
Motormen, 84 SCRA 223, 226 (1978); Malong v. Philippine National Railway, 138 Philippine Rock Industries, Inc. v. Board of Liquidators, 180 SCRA 171, 174 (1989).
138
. SCRA 63, 67 (1985). Philippine Education Co. v. Soriano, 39 SCRA 587, 590 (1971) .
131
U.S. v. Rodrigo, 182 SCRA 644,661 (1990). 139
Tabora v. Montelibano, 98 Phil. 800, 806 (1956); Ramos v. Court of Industrial
132
Fontanilla v. Maliaman, 179 SCRA 685 (1989). Relations, 129 Phil. 542, 547 (1967); Republic v. CFI of Rizal, 99 SCRA 660, 665
133
(1980).
National Airports Corporation v. Teodoro, 91 Phil. 203, 206 (1952); Santos 140
v. Santos, 92 Phil. 281, 285 (1952); Civil Aeronautics Administration v. Court of 107 Phil. 404 (1960).
Appeals, 167 SCRA 28, 37 (1988). 141
Angat River Irrigation Systems v. An gat River Workers' Union, 102 Phil. 790,
134
89 Phil. 745, 747 (1951). 796 (1957).
135 142
91 Phil. 203, 207. 179 SCRA 685, 692 (1989).
50 ATENEO lAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT 51

3. Performance of Functions Imposed by the Constitution governmental function, the government agency cannot be sued. 146 The
proprietary functions do not detract from the governmental nature of the
If the performance of a function is imposed by the Constitution upon function of the government agency. Thus, it was held that the Board of
the state, it is governmentaL Thus, in ruling that the Angat River Irrigation Liquidators could not be sued for selling a rock pulverizing plant, as the sale
System was performing a governmentat function, the Supreme Court reasoned was merely incidental to the governmental function of liquidating the
out: Reparations Commission. 147 •

In Mobil Philippines Exploration, Inc. v. Customs AJTastre Service/48

"This undertaking of regulating the use and appropriation the Supreme Court ruled that the Bureau of Customs could not be held liable
of our public waters by the Government, in turn, arose out of the for the loss of goods in its custody while it was operating the arrastre service.
duty of the State to supervise the disposition and use of our natural The Supreme Court reasoned out:
resources and the correlated exhortation by the Constitution as
regards its conservation and utilization." 143 Its primary function is governmental, that of assessing and
44
collecting lawful revenues from imported articles and all other tariff
In the subsequent case of Fontanilla v. Maliaman/ the Supreme and customs duties, fees, charges, fines and penalties. (Sec. 602,
Court held that the administration of irrigation systems is a proprietary R.A 1937) To this function, arrastre service is a necessary incident.
function. However, it kept silent over the fact that the disposition and use of For practical reasons said revenues and customs duties cannot be
natmal resources is a function imposed by the Constitution upon the assessed and collected by simply receiving the importer's or ship
government. agent's or consignee's declaration of merchandise being imported
Likewise, State colleges and universities are performing a and. imposing the duty provided in the Tariff law. Customs
governmental function. 145 Section 2, Article XIV of the 1987 Constitution authorities and officers must see to it that the tallies
provides: with the merchandise actually landed. And this checking up requires
that the landed merchandise be hauled from the ship's side to a
"The State shall: suitable place to enable said customs officers to make it, that is, it
requires arrastre operation.

In the earlier case of Atrastre Workers' Union v. Bureau of Customs, 149

(c) Establish, maintain, and support a complete, however, the Supreme Court held that the arrastre workers hired by the
adequate,and integrated system of education relevant to the· needs Bureau of Customs could go on Lfstrike, because the arrastre service did not
of the people and society." involve a governmental function. This case was distinguished by the Supreme
C.ourt from Mobil by claiming that the amenability of the Bureau of Customs
to s.uit was net an issue in that case. If the arrastre operation is a proprietary
4. Performance of Proprietary Functions Incidental to function, should it not follow that the Bureau of Customs should be amenable
Governmental.,Functions to suit? Can a function be proprietary for one·}mrpose, i.e., labor relations,
and governmental for another purpose, i.e., liability for loss of import<!d
If the performance of a proprietary function is merely incidental to a

146
143
Angat River Irrigation Systems v. Angat River Workers' Union, 102 Phil. 790, Bureau of Printing v. Bureau of Printing Employees Association, 110 Phil.
952, 956 (1961).
796 (1957).
147
144
179 SCRA 685.
Philippine Rock Industries, Inc. v. Board of Liquidators, 180 SCRA 171. 175
(1989).
145
Bermoy v. Philippine Normal College, G.R. L-8670 (May 18, 1956); 148
125 Phil. 270, 277 (1966).
University of the Philippines v. Court of Industrial Relations, 107 Phil. 848, 850 149
(1960); University of the Philippines v. Gabriel, 154 SCRA 684, 693 (1987). G.R. No. L-21307 (August 6, 1963).
52 ATENEO lAW JOURNAL VOLXXXV ' 1991 IMMUNITY FROM SUIT 53

goods? In its latest stance, the Supreme Court drew a distinction between
In all the cases decided by the Supreme Court, the proprietary contracts connected 'Yith commercial activities and contracts related to
function could also be performed by private entities. Yet, they were sovereign In the case of the U.S. v. Ruiz, 155 the Supreme Court
considered governmental, because they were performed by a government· elaborated on this distinction:
agency: Thus, the test the Supreme Court used for classifying the nature of
the activity was not the inherent nature of the activity but the identity of the The restrictive application of State immunity is proper only
performer of the activity. The proprietary fmiction was as when the proceedings arise out of commercial transaction of the
subsumed into a government function, because the governmental. agency foreign sovereign, its commercial activities or economic affairs.
performing it was also engaged in a governmental function. Stated differently, a State may be said to have descended to the
When a government agency performs a proprietary function, it 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.
becomes amenable to lawsuit, even if it does not have a juridical personality
It does not apply where the contract relates to the exercise of its
separate and distinct from that of the state. 150 By engaging.in a proprietary sovereign function.
function, the State descends to the level of a private individual. Thus, the
ruling in Metropolitan Transportation Service v. Paredes, 151 that the Thus, in the same case, it was held that the United States of America
Metropolitan Transportation Service was immune from suit because it had no could not be deemed to have given its consent to be sued, since the contract
juridical pers16nality, is erroneous. The Metropolitan Transportation Service involved the repair of wharves within a naval base and defense is a
was engaged' in the transportation service. The operation of a common carrier 156
governmental function. Likewise, the purchase of copper sulphate by the
is a proprietary function. 152 Bureau of Telecommunications was considered as having been made in the
exercise of a governmental function. 157 On the other hand, a contract for the
B. Contracts operation of barber shops within an air base was considered as
158
commercial. Likewise, an office organized to disseminate government
Originally, the Supreme Court held that when State enters into a information could be sued for failure to pay a loan it contracted to pay for the
contract, it opens itself to lawsuit. By entering into the contract, it descended rights to cover basket.ball games, since the undertaking was not connected
to the level of a private individual. Its consent to be sued is implied from the' with its governmental function. 159
very act of entering into the contract. 153 Later on, the Supreme Court ruled
that the State may not be sued for breach of contract, because consent to be
sued can only be given through a duly enacted statute. 154 C. Institution of Lawsuits

When the State takes the initiative in filing a case, it descends to the
150 level of a private individual and throws itself open to a counterclaim. Section
National Airport Corporation v. Teodoro, 91 Phil. 203, 206 (1925); Santos v.
5 of Act No. 3083 provides: "When the Government of the Philippine Islands
Santos, 92 Phil. 281, 285 (1952); Civil Aeronautics Administration v. Court of
is plaintiff in an action instituted in any court of original jurisdiction, the
Appeals, 167 SCRA 28, 37 (1988); Philippine Rock Inc. v. Board of
Liquidators, 180 SCRA 171, 174 (1989); United States of America v. Rodrigo, 182
SCRA 644, 661 (1990).
151 155
79 Phil. 819, 823 (1948). 136 SCRA 487, 492 (1985).
152
Philippine National Railway v. Union de Maquinistas, Fogoneros y 156 ld.
Motormen, 84 SCRA 223, 226 (1978); Malong v. Philippine National Railway, 138 157
SCRA 63, 67 (1985). Pacific Products, Inc. v. Ong, 181 SCRA 536, 544 (1990).
158
153
Santos v. Santos, 92 Phil. 281, 284 (1952); Lyons, Inc. v. U.S., 104 Phil. U.S. v. Guinto, 182 SCRA 644, 662 (1990).
593, 595-96 (1958). 159
Traders Royal Bank v. Intermediate Appellate Court, G.R. No. 68514
154
Republic v. Purisima, 78 SCRA 470, 474;(1977). (December 17, 1990).
54 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUIT
55
defendant shall have the right to assert therein, by way of set.,off or parties may intervene in the suit. 163 _
counterclaim in a similar action between private parties." A petition for certiorari may be filed against the State if it initiated a
In Froilan v. Pan Oriental Shipping Co., 160 the Supreme Court case, as the filing of the petition is merely an incident of the case with respect
explained this rule as follows: to which it submitted to the jurisdiction of the courts. 164
If the State intervened in a case merely to join the defendant in
In short, by taking the initiative in an action against a resisting the claim of the plaintiff and did not ask for affirmative relief against
private party, the State surrenders its privileged position and comes
any party, no counterclaim can be raised against it. Since the State did not
down to the level of the defendant. The latter automatically
acquires, within certain limits, the right to set up whatever claims take the initiative in filing the case and did not ask for any affirmative relief,
and other defenses he might have against the State. · it cannot be deemed· to have waived its imw.unity from suit. 165 However, if
it asked for affirmative relief, a compulsory counterclaim can be raised against
166
Thus, if the State files an expropriation case, it may be ordered to pay it. Thus, where the State intervened in an action involving a land dispute
just compensation. to the defendant 161 and asked that it be declared the owner of the disputed lots, it could be
The counterclaims that can be interposed against the State must be ordered to reimburse for necessary expenses one of the parties who was a
limited to compu.Isory counterclaims and cannot extend to permissive possessor in good faith. 167
counterclaim"s-. 162 The consent of the State to litigate must be limited to the
subject or"its complaint, for it should be deemed to have waived its immunity
from suit only with respect to that subject.
D. Expropriation
Since by filing a case the State waives its immunity from suit, private
If the government expropriates private property without paying just
compensation, the owner may sue for payment of "the compensation. 168
Otherwise, the constitutional guarantee against the taking of property for
160
public use without the payment of just compensation will be rendered
95 Phil. 905, 912 (1945). nugatory.
161
Visayan Refining Co. v. Camus, 40 Phil. 550, 562 (1919); Commissioner of Seetion 9, Article Ill of the 1987 Constitution provides: "Private
Public Highways v. San Diego, 31 SCRA 616, 623-24 (1970). property shall not be taken for public use without just compensation."
162
Hawthorne v. United States, 115 F2d 805, 805 (1940); In re Monongahela Rye In the case of Ministerio v. CFI, 169 the Supreme Court explained why
Liquors, Inc.,141 F2d 864, 869 (1944); United States v. Sliverton, 200 F2d 824, 826 the State should be deemed to have waived its immunity from suit if it
(1952); United States v. Martin, 267 F2d 764, 769 (1959); Thompson v. United expropriates property without paying just compensation:
States, 291 F2d 67, 68 (1961); Frederick v. Unites States, 386 F2d 481, 488 (1967);
Federal Savings & Loan Corporation v. Quinn, 419 F2d 1014, 1017 (1969);
Equal Employment Opportunity Commission v. First National Bank of Jackson, 614
F2d 1004, 1008 (1980); ; United States v. lrby, 618 F2d 352, 357 (1980); United 163
Republic v. Sandiganbayan, 182 SCRA 911, 924 (1990); Republic v.
States v. Timmons, 672 F2d 1373, 1380 (1982); United States v. 2,116 Boxes of Boxed Sandiganbayan, 184 SCRA 383,388 (1990).
Beef, 729 F2d 1483, 1490 (1954); Spawr v. United States, 796 F2d 279, 280 (1986); 164
United States v. Isenberg, 110 FRD 387, 394 (1986); United States v. New York Carandang v. Republic, 95 SCRA 668, 670 (1980).
Trust Co., 75 F Supp 583, 587 (1946); United States v. Wissahicken Tool Works, 165
Lim v. Brownell, 107 Phil. 344, 351-52 (1960).
Inc.,84 F Supp 896, 900 (1949); Republic of China v. Pang-Tsu Mow, 105 F Supp 166
411, 412 (1952); United States v. Finn, 127 F Supp 158, 166 (1954); United States Froilan v, Pan Oriental Shipping Co., 95 Phil. 909, 912 (1954).
v. Southern California Edison Co., 229 F Supp 268, 270 (1964); United States 167
Dizon v. Rodriguez, 121 Phil. 681, 687 (1965).
v.Yonkers Branch-National Association for the Advancement of Colored People, 594 168
F Supp 466, 469 (1984); Federal Savings & Loan Insurance Corporation v. Williams, Ministerio v. CFI of Cebu, 40 SCRA 464, 470 (1971); Amigable v. Cuenca,
599 F Supp 1184, 1211 (1984); Federal Deposit Insurance Corporation v. Renda, 692 43 SCRA 360, 364 (1972); Gascon v. Arroyo, 178 SCRA 582, 587 (1989).
169
F Supp 128, 135 (1988). 40 SCRA 464, 470-71 (1971).
56 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNrTY FROM SUIT 57

It is unthinkable then that precisely because there was a government applies whether the government is right or wrong. The very
failure to abide by what the law requires, the government would purpose of the doctrine is to prevent a judicial examination of the merits of
stand to benefit. It is just as important, if not more so, that there be the government's position."173
fidelity to legal norms on the part of officialdom, if the rule of law A donation is a contract. 174 The Supreme Court recognized this in
were to be maintained. It is not too much to say that when the Santiago v. Republic. 175 The decision would have stood on firmer grounds
government takes any property for public use which is conditioned had it been based on this premise. By entering into such a contract, the
upon the payment o(just compensation, to be judicially ascertained,
government should be deemed to have descended to the level of a private
it makes manifest that it submits to the jurisdiction of a court.
There is no thought then that the doctrine of immunity from suit individual and to have waived its immunity from suit.
could still be appropriately invoked.
VID.FACfORS THAT DO NOT CONSTITUTE WAIVER OF
IMMUNITY FROM SUIT

E. Justice and Equity

A Failure to Invoke Immunity from Suit
In the case of Santiago v. Republic, 170 the Supreme Court allowed the
action filed against the government on the basis of equity and justice. Since only Congress can expressly waive the immunity of the State
The plaintiff in that case donated a parcel of land to the Bureau of from suit, such immunity cannot be deemed to have been waived because of
Plant Industry. The deed of donation contai9ed the condition that the Bureau the failure of the lawyer of the government to move to dismiss on the ground
of Plant Industry should install lighting and a water system in the of lack of jurisdiction or to raise the immunity of the State from suit as a
property donated and construct an office ,building and parking lot not later defense in the answer. 176 Other.vise, the immunity of the State from suit
than December 7, 1974. Because of the alleged failure of the Bureau of Plant would depend upon the discretion of the lawyer of the government. m In
Industry to comply with these condition,s, the plaintiff sued to have the fact, this is a defense which the courts may take up upon their own initiative
donation revoked. The government invoked its immunity from suit. at any stage of the proceedings. 178
The Supreme Court rejected the contention of the government by Thus, in the case of the Insurance Company of North America v.
holding: "It is the considered opinion of this Court then that to conform to Osaka; Shosen Kaisha, 179 the Supreme Court held:
the high dictates of equity and justice, the presumption of consent could be
indulged in safely." 171
To base the waiver of immunity from suit on consideration of justice 173
and equity is shaky. Considerations of reasonableness and justice cannot serve v. United States, 827 F2d 1306, 1309 (1987).
174
as basis for the right to sue the State.m Otherwise, in every case in which 4 CASTAN, OERECHO CIVIL ESPA!i!OL, COMUN Y FORAL 219 (13d); 4
a private individual is aggrieved, the immunity of the State should be deemed SANCHEZ ROMAN, ES1UDIOS DE DERECHO CIVIL 702-703 (2d 1899); 11 SCAEVOLA,
to have been waived. At the risk of allowing certain grievances to remain CODIGO CIVIL, Vol. 2, at 525 (5d 1943).
unredressed, the State is clothed with immunity from suit because of higher 175
87 SCRA 294, 301(1978).
considerations. 176
Alien Property Administration v. Castelo, 89 Phil. 568, 577 (1950);
Thus, the United States Court of Appeals held: "The immunity of the
Republic v. Feliciano, 148 SCRA 424, 431 (1987); United States of America v.
Ceballos, 182 SCRA 644, 660 (1990).
177
Minnesota v. United States, 305 U.S. 382,389 (1939); United States v. United
170
87 SCRA 294 (1976). States Fidelity & Guaranty Co., 309 U.S. 506, 513 (1940).
171 178
Santiago v. Republic, 87 SCRA 294, 296-97 (1978). Republic v. Feliciano, 148 SCRA 424, 431 (1987).
172 179
Wells v. United States, 214 F2d 380, 382 (1954). 137 Phil. 194, 200-01 (1969).
58 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUrf 59
The fact that defendants-appellees have not raised such to provide· a remedy through the courts for violation of a right it has
defense at any stage of this case is of no moment. Indeed, whether created. 184
We hold that the matter on non-suability is jurisdictional, either
over the subject matter or of the person of the defendants, or We
consider it a failure to state a cause of action, when the consent of
the State is not alleged in the complaint, as in this case, in line with
the decision of the Court in American Insurance Co. v. Macondray IX. CONSEQUENCES OF WAIVER OF IMMUNITY FROM SUIT
& Co., We are agreed that whichever of these three means may
be the most accurate one, said defense may be invoked by the courts
sua sponte at/any stage of the proceedings.
A Right to Defend

B. Designation of Special Agent By consenting to be sued, the State simply waives its immunity from
suit. It does not concede its liability to the plaintiff. The State retains the right
to raise any lawful defense. When the State waives its immunity from suit, it
Whenever the State acts through a special agent, it is liable for is merely giving the plaintiff a chance to prove that the State is liable. 1as
damages caused by the special agent because of his negligence in the
performance of his duties.
Article 2180 of the Civil Code states in part: "The State is responsible B. Execution
in like manner when it acts through a special agent; but not when the damage
has been caused by the official to whom the task properly pertains, in which Even if the State consented to be sued, it does not follow that a
case what is provided in Article 2176 shall be applicable." judgment against it can be enforced by execution. The waiver of its immunity
A special agent is one who received a definite and fiXed order of from suit does not include a waiver of its immunity from execution. 186
commission foreign to the exercise of the duties of his office. 180 Disbursement of public funds· must be covered by a corresponding
Although Article 2180 of the Civil Code makes the State liable for ..
appropnatlon bCo
y ngress. 187
damages if it acted through a special agent, it does not follow that it can be The remedy of the plaintiff is to file a claim with the Commission on
sued. The provision lays down a rule of liability but not of suitability. 181 Audit. Section 7 of Act No. 3083 provides:
Artide 2180 of the Civil Code simply creates an exception to the general rule
that the State is not liable for the negligence of its employees. 182
Even if the law creates a right in the individual against the State, it
does not follow that he may sue the State. Only Congress can proVide for a 184
United States v. Babcock, 250 U.S. 328, 331 (1919).
judicial remedy for the enforcement of such right. It is up to Congress to
l&S Merritt v. Government of the Philippine Islands, 34 Phil. 311, 318 (1910);
define how such right can be enforced. 183 The State is under no obligation
Philippine Rock Industries, Inc. v. Board of Liquidators, 180 SCRA 171, 175 (1989);
United States of America v. Ceballos, 182 SCRA 644, 661 (1990).
186
Republic v. Belleng, 118 Phil. 854, 857 (1963); Republic v. Palacio, 132 Phil.
370, 375 (1968); Commissioner of Public Highways v. San Diego, 31 SCRA 616, 625
180
Merritt v. Government of the Philippine Islands, 34 Phil. 311, 322 (1916); (1970); Republic v. Villasor, 54 SCRA 83, 87 (1973); Director of the Bureau of
Rosete v. Auditor General, 81 Phil. 453, 456 (1948); Fontanilla v. Maliaman, 179 Printing v. Francisco, 54 SCRA 324, 331 (1973); Philippine Rock Industries, Inc. v.
SCRA 685, 692 (1989); Apia-on v. Municipality of Silay, 2 CAR 330, 334 (1962). Board of Liquidators, 180 SCRA 171, 175 (1989); Traders Royal Bank v.
181 Intermediate Appellate Court, G.R. No. 68514 (December 17, 1990).
United States of America v. Ceballos, 182 SCRA 644, 659 (1990). 187
182 Commissioner of Public Highways v. San Diego, 31 SCRA 616, 625 (1970);
1 TAJ\IADA AND CARREON, POLITICAL LAW OF 1HE PHILIPPINES, 51 (1961).
183
Republic v. Villasor, 54 SCRA 84, 87 (1973); Philippine Rock Industries, Inc. v.
Hobby v. Hodges, 215 F2d 754, 758 (1954). Board of Liquidators, 180 SCRA 171, 175 (1989).
60 ATENEO LAW JOURNAL VOL XXXV 1991 IMMUNITY FROM SUrT 61
No execution shall issue upon any judgment rendered by judgment is affirmed, it will be liable for the costs on appeal. 192
any court against the Government of the Philippine Islands under Costs are taxed against the Republic of the Philippines in
the provisions of this act; but a copy hereof duly certified by the expropriation the just compensation which Section 9, Article
Clerk of the Court in which judgment is rendered shall. be III of the 1987 Constitution requires to be paid to the owner must include the
transmitted by such clerk to the Governor-General, within five days
expenses he incurred to recover the just compensation. Otherwise, the
after the same becomes final.
compensation he will receive will be diminished by the costs incurred in
enforcing his rights. 193
.If Congress did not appropriate money to satisfy the judgment, it
cannot be paid. No money can be paid out of public funds without an The pronouncement of the Supreme Court in the case of Republic v.
194
appropriation. 188 This is provided in Subsection 1, Section 29, Article VI of Garcia, that the Republic of the Philippines is not liable for costs in
expropriation cases is erroneous.
the 1987 Constitution.

C. Liability for Interest and Costs

X EXECUTION
Even if the State waived its immunity from suit, it cannot be held
liable for interest and costs of suit unless a statute expressly makes it
A Separate Juridical Personality
liable. 189
As a rule, no costs can be taxed against the Republic of the
Philippines. 190 However, costs should be assessed against the Republic of the The Supreme Court has repeatedly held that if a government agency
Philippines in expropriation cases. 191 This is pursuant to Section 12, Rule 67 has a separate juridical personality, its funds may be garnished. 195 Should not
of the Rules of Court, which reads: a further inquiry be made as to what is the source of such funds and for what
purpose such funds were appropriated? If the funds sought to be garnished
The fees of the commissioners shall be part of the costs of came from a legislative appropriation and they were appropriated for a certain
the proceedings. All costs, except those of rivl)l claimants litigating special purpose, they should be exempt from garnishment. Otherwise, the
their claims, shall be paid by the plaintiff, unless an appeal is taken funds will be diverted from the purpose for which they were appropriated.
by the owner and the judgment is affirmed, in which event the costs
of the appeal shall be paid by the owner.

Thus, if it is the owner of the property sought to be expropriated who

192
appealed and the judgment is affirmed, the costs of the appeal should be Republic v. Gonzales, 94 Phil. 956, %3 (1954).
assessed against him. However, if it is the government who appealed and the 193
Dickson v. Epling, 48 NE 1001, 1003 (Ill. Sup. Ct., 1897); Stolze v. Milwaukee
& Lake Winnebago Railroad Co., 88 NW 919, 924 (Wis. Sup. Ct., 1902); Dolores
No.2 Land & Canal Co. v. Hartman, 29 P 378, 378 (Col. Sup. Ct., 1894); City &
188
County of San Francisco v. Collins, 33 P 56, 57 (Cal. Sup. Ct., 1893).
Lung Chea Kung Kee & Co. v. Wright, 46 Phil. 44, 47 (1924). 194
189
76 SCRA 47, 49 (1977).
Marine Trading Co., Inc. v. Government of the Philippine Islands, 39 Phil. 29, 195
33 (1918). National Shipyards & Steel Corporation v. Court of Industrial Relations, 118
190 Phil. 782, 788 (1963); Philippine National Bank v. Court of Industrial Relations, 81
Id. Hongkong & Shanghai Banking Corporation v. Gafferty, 39 Phil. 145, 154
SCRA 314, 318 (1978); Philippine National Bank v. Pabalan, 83 SCRA 595, 599
(1918); Sarasoia v. Trinidad, 40 Phil. 252, 261 (1919); Urtula v. Republic, 130 Phil.
449, 455 (1968). . (1978); Philippine National Railway v. Union de Maquinistas, Fogoneros y
191
Motormen, 84 SCRA 223, 227 (1978); Rizal Commercial Banking Corporation v. De
Republic v. Gonzales, 94 Phil. 956, 963 (1954); Urtula v. Republic, 130 Phil. Castro, 168 SCRA 49, 59 (1988); Philippine Rock Industries, Inc. v. Board of
449, 455 (1968). Liquidators, 180 SCRA 171, 174-75 (1989).
 1:1:11 63
62 ATENEO LAW JOURNAL VOL XXXV
JURISDICTION OF PHILIPPINE COURTS
B. Waiver of Exemption from Execution OVER NON-RESIDENT DEFENDANTS
Under Section 1 of Presidential Decree No; 1807, the Republic of the
Philippines waived its immunity from execution. However, this waiver should .RAMON ERENETA, JR. •
be limited to the patrimonial properties of the Republic of the Philippines and
should not be expanded to cover properties for public use and for public
service. 196
The world seems to be shrinking as a result of technological
advancement in high-speed communication and air travel. Oral and written
XI. CONCLUSION communications are now received almost instantly in most parts of the world;
while travel from one continent to another now takes only several hours.
The application of the principle <:1f State immunity from suit will keep These developments have facilitated greater interaction among people in
a
involving delicate balancing act between the claim of private individuals for different countries and accelerated the increase in the number of transnational
redress for violation of their rights and the need to protect the State from transactions.
s).lability because of the demands of public interest. Doubtless, special factors In the Philippines, transactions containing foreign elements are
will crop up in future cases that will test the applicability of the principle of becoming very common as shown by the volume of imports and exports,
State immunity from suit. In a given case, can an exemption froni the principle inflow of foreign i:qvestments, international subcontracting, overseas
of -state immunity from suit be fashioned out and still leave this principle employment, and tourist trade. Disputes are likely to occur in a number of
intact? The quest for justice is unceasing. The interplay between individual these tranSactions and the party residing in the Philippines would most likely
demand for justice and the principle of State immunity from suit will pose a ask the question: Can it be resolved by a Philippine Court?
continuing challenge to the creativity of lawyers and judges alike. Even in everyday living a dispute may arise as a result of a simple
purchase made by a Filipino consumer of a defective foreign-manufactured
product or a Philippine-manufactured. product containing ddective parts
produced in a foreign country. In this case, the Filipino plaintiffs interest is
to satisfy his claim against the defendant. He has a strong interest in being
heard in the forum which he finds most convenient. More often, this will
mean that the plaintiff will sue in his home forum. 1 In the ordinary habits of
life, anyone would be disinclined to litigate before a foreign tribunal. 2 This
paper will try to establish the reasonable limits of a Philippine Court's
jurisdiction over non-resident· defendants. The focus will be ·on quasi in rem
jurisdiction and in personam jurisdiction over foreign corporations.

• Professor, Ateneo de Manila School of Law; Presidential Assistant, Office of

the President; Executive Director, Filipino Overseas Construction Board; LL.B.,
Ateneo de Manila School of Law (1977); LL.M., London School of Economics
(1983).
1
Smit, The Enduring Utility of In Rem Rules: A Lasting Legacy of Pennoyer v.
Tan Taco v. Municipal Council of Iloilo, 49 Phil. 52, 59 (1926); Municipality
196
Neff, 43 BROOKLYN L. REV. 600, 607 (1977).
of Paoay v. Manaois, 86 Phil. 629, 632 (1950); Municipality of San Miguel v. 2
Fernandez, 130 SCRA 56, 60 (1984); Municipality of Makati v. Court of Appeals, Hongkong & Shanghai Ba.nking Corp. v. Sherman, 176 SCRA 331 (1989).
G.R. No. 89898 (October 1, 1990).