Doctrine of State Immunity - Constitutional Law

ARTICLE XVI, Section 3 of the Constitution – The state may not be sued without its consent

·     “A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends.” (Kawanakoa v. Polybank)

·     Two theories of State immunity

Ø Classical/absolute theory – A sovereign cannot, without its consent, be made a respondent in the courts of another sovereign (Holy see V. Rosario)

Ø Restrictive Theory

v 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 (JUSMAG v. NLRC)

v But not all contracts are deemed to be implied consent to be sued. The immunity of the sovereign is recognized only with regard to public acts or acta jure imperii of a state, but not with regards to private acts or acta jure gestionis. (Holy see V. Rosario)

·     How can a state be sued? (By Waiver of Immunity)

The consent of the state to be sued may be made either

Ø Expressly – May be manifested through a general law (ex. Act. 3083) or a special law (ex. art. 2189 of the Civil Code).

v The express consent of the State to be sued must be embodied in a duly enacted statute and may not be given by a mere counsel of the government. (Republic v. Purisima)

Ø Impliedly – when the state itself commences litigation or when it enters into a contract. (and when the state itself files a complaint.)

v Examples where the SC impliedly waived their immunity

§  Supreme court reversed the trial courts dismissal on the ground of state immunity of a complaint for damages filed by the plaintiff whose property was constructed by the Gov’t without his knowledge or consent. SC declared “The doctrine of sovereign immunity was not an instrument for perpetrating any injustice on a citizen. (De los Santos v. Intermediate Appellate Court)

§  In Froilan v. Pan Oriental Shipping Co. The Supreme Court held that the government impliedly allowed itself to be sued when it filed a complaint in intervention for the purpose of asserting claim for affirmative relief against the plaintiff to the recovery of the vessel.

§  Plaintiff sued the government for the revocation of a donation on the ground of failure to comply with the stipulated conditions. Defendant moved to dismiss for lack of consent to be sued. SC held “Here, the alleged failure to abide by the conditions under which a donation was given should not prove an insuperable obstacle to a civil action, the consent likewise being presumed. This conclusion is strengthened by the fact that while a donation partakes of a contract, there is no money claim, and therefore reliance on Commonwealth Act No. 327 would be futile.” (Santiago v. Republic)

·     A money claim against the government must first be filed with the COA, which must act upon it within 60 days. Rejection of the claim will authorize the claimant to elevate the matter to the Supreme Court on certiorari and in effect sue the State with its consent. (Commonwealth Act No. 327, as amended by P.D No. 1445) (Cannot be used against foreign entities. Phil. Congress cannot waive other countries immunity)

·     Suits against Government Agencies

Ø Incorporated Government Agency – has a charter of its own that invests it with a separate juridical personality. (i.e. UP and SSS)

v Suable if their charter said so regardless of the functions it is performing be it acts jure imperii of a state or acts or acts jure gestionis. (Bermoy v. Phil. Normal College, Arcega V. CA, Central Bank v. CFI of Bulacan, and NPC and PNR V. Intermediate Appellate Court)

Ø Unincorporated Government Agency – has no separate juridical personality but is merged in the general machinery of the Government (DOJ)

v It is necessary to determine the nature of the functions in which the agency is engaged. They are suable if they are proprietary and not suable if they are governmental.

v Non suability of the State is available to the agency even if it shown that it is engaged not only in Gov’t function but also, as a sideline, or incidentally, in proprietary enterprises.

§  In Bureau of Printing v. Bureau of printing employee’s association SC held that “The additional work it executes for private parties is merely incidental to its function”

§  In Mobil Phil. Exploration V. Customs Arrastre Services SC Held: “Although said arrastre function may be deemed proprietary, it is necessary incident of the primary and gov’t function of the BOC, so that engaging in the same does not necessarily render the BOC liable to suit. Sovereign immunity, granted as to the end, should not be denied as to the necessary means to that end”

v Examples of cases where SC ruled that the unincorporated Government agency is suable are Air Transportation Office v. Ramos, National Airport Corp. v. Teodoro.

·     SUABILITY OF THE STATE VS LIABILITY OF THE STATE

Ø SUABILITY – Is only a matter of the state waiving its immunity from suit. Or the result of the express or implied consent of the State to be sued.

Ø LIABILITY – Is a matter of the applicable law and the circumstances of its case. Determined after hearing the basis of the relevant laws, the established facts

Ø Liability is not ceded by the mere fact that the state has allowed itself to be sued. (La union v. Firme)

Ø Municipal Government are suable because their charters grant them the competence to sue and be sued.

Ø Celebration of Town Fiesta is considered as a proprietary function (Torio v. Fontanilla)

·     Can you Garnish government funds deposited in banks or levy government property and sell them on public action to satisfy judgement against the state?

Ø Where property of a municipal or other public corporations is sought to be subjected to execution to satisfy judgements recovered against such corporations, the question as to whether such property is leviable or not is to be determined by the usage and purpose for which it is held (Viuda de Tan Toco V. Municipal council of Iloilo)

Ø In UP v. Dizon, the SC stated that an award against the petitioner for moral and actual damages would require an appropriation by Congress considering that “such monetary liabilities were not covered by the ‘appropriations earmarked for said project,’’

Syquia vs Lopez - Constitutional Law

G.R. No. L-1648             August 17, 1949

PEDRO SYQUIA, GONZALO SYQUIA, and LEOPOLDO SYQUIA, petitioners,

vs.

NATIVIDAD ALMEDA LOPEZ, Judge of Municipal Court of Manila, CONRADO V. SANCHEZ, Judge of Court of First Instance of Manila, GEORGE F. MOORE, ET AL., respondents.

Ponente:

MONTEMAYOR, J.

Action:

Petition for a writ of mandamus seeking to order the Municipal Court of Manila to take jurisdiction over the case

Facts:

Petitioners Pedro, Gonzalo and Leopoldo Syquia are joint owners of properties in Manila. In 1945, they executed contracts for lease of their apartments to USA, with the term being until the war has ended and six months after, or unless terminated sooner by USA. When Japan surrendered on September 2, 1945, the lease would be terminated six months after. The petitioners approached the predecessors of Moore and Tillman and requested the buildings to be returned to them. However, they were advised that the US Army wanted to continue their occupancy of the buildings and advised that they will vacate the premises before February 1, 1947. Petitioner sued before the Municipal Court of Manila with the demand to get the properties and furthermore asked for increased rentals until the premises were vacated. Respondent moved to dismiss the suit for lack of jurisdiction on the part of the court. The MC of Manila granted the motion to dismiss the suit, sustained by the CFI of Manila, hence the petition for certiorari.

Issues:

Whether the Philippine Courts have a lack of jurisdiction, considering, under the doctrine of Sovereign Immunity, that USA has not given their consent to be a respondent.

Ruling:

In conclusion we find that the Municipal Court of Manila committed no error in dismissing the case for lack of jurisdiction. Case dismissed, without pronouncement as to costs.

Ratio Decidendi:

The real party defendant in interest is the Government of the United States of America; that any judgment for back or increased rentals or damages will have to be paid not by defendants but by the said U.S. Government. It is clear that the courts of the Philippines including the Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. The U. S. Government has not given its consent to the filing of this suit which is essentially against her, though not in name.

Ruiz vs Cabahug (G.R. No. L-9990) Constitutional Law

ENRIQUE J. L. RUIZ and JOSE V. HERRERA, in their behalf and as minority stockholders of the Allied Technologists, Inc., plaintiffs-appellants,

vs.

HON. SOTERO B. CABAHUG, Secretary of National Defense, Col. NICOLAS JIMENEZ, Head of the Engineer Group, Office of the Secretary of National Defense, THE FINANCE OFFICER of the Department of National Defense, the AUDITOR of the Department of the National Defense, PABLO D. PANLILIO and ALLIED TECHNOLOGISTS INC., defendants-appellees.

Ponente:

LABRADOR, J.

Action:

Appeal from a judgment of the Court of First Instance of Manila dismissing plaintiffs' amended complaint

Facts:

On July 31, 1950 Hon. Sotero B. Cabahug (Secretary of National Defense) accepted the bid of the Allied Technologists, Inc., to furnish the architectural and engineering services in the construction of the Veterans Hospital at a price of P302,700. The plans, specifications, sketches and detailed drawings and other architectural requirements submitted by the Allied Technologists through its architects, Enrique J. L. Ruiz, Jose V Herrera and Pablo D. Panlilio were approved by the United States Veterans Administration in Washington, D.C. When the officials of the Department of National Defense paid the Allied Technologists the contract price for the architectural engineering service, they retained 15 per cent of the sum due, for the reason that Mr. Panlilio has asserted that he is the sole and only architect of the Veterans Hospital to the exclusion of his fellow architects Ruiz and Herrera, an assertion aided and abetted by Col. Nicolas Jimenez. This action deprived Mr. Ruiz and Mr. Herrera monetary value of their professional services and damaged their professional prestige and standing.

Issues:

Whether or not the government can be sued for withholding the 15% of the sum and depriving the plaintiffs of their share.

Ruling:

The order of dismissal is hereby reversed and set aside, and the case is remanded to the court a quo for further proceedings. With costs against the defendants-appellees.

Ratio Decidendi:

The case is a not a suit against the government, which could not be sued without its consent. It was found that the government has already allotted the full amount for the contract price; it was the defendant-officials which were responsible for the allegation. This was to be directed to the officials alone, where they are compelled to act in accordance with the rights established by Ruiz and Herrera or to desist from paying and recognizing the rights and interests in the funds retained and the credit for the job finished. The order of dismissal was reversed and set aside and the case was remanded to the court a quo for further proceedings with cost against the defendants.

Sanders vs Veridiano (G.R. No. L-46930) Constitutional Law

G.R. No. L-46930 June 10, 1988

DALE SANDERS, AND A.S. MOREAU, JR, petitioners,

vs.

HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First Instance of Zambales, Olongapo City, ANTHONY M. ROSSI and RALPH L. WYERS, respondents.

Ponente:

CRUZ, J.

Action:

This petition for certiorari, prohibition and preliminary injunction

Facts:

Petitioner Dale Sanders was the special services director of the US Naval Station (NAVSTA) in Olongapo City. Private respondents, Anthony Rossi and Ralph Wyers, are American citizens permanently residing in the Philippines and were employed as game room attendants in the special services department of NAVSTA. On October 3, 1975, the respondents were advised that their employment had been converted from permanent full-time to permanent part-time. In a letter addressed to petitioner Moreau, Sanders disagreed with the hearing officer’s report of the reinstatement of private respondents to permanent part-time plus back wages. Respondents allege that the letters contained libelous imputations which caused them to be ridiculed and, thus, filed for damages against petitioners.

Issues:

Whether the petitioners were performing their official duties when they did the acts for which they have been sued for damages.

Ruling:

WHEREFORE, the petition is GRANTED.

Ratio Decidendi:

It is clear in the present case that the acts for which the petitioners are being called to account were performed by them in the discharge of their official duties. Sanders, as director of the special services department of NAVSTA, undoubtedly had supervision over its personnel and had a hand in their employment, work assignments, discipline, dismissal and other related matters. The same can be said for Moreau. Given the official character of the above-described letters, it can be concluded that the petitioners were being sued as officers of the United States government. There should be no question by now that such complaint cannot prosper unless the government sought to be held ultimately liable has given its consent to be sued. The private respondents must pursue their claim against the petitioners in accordance with the laws of the Unites States of which they are all citizens and under whose jurisdiction the alleged offenses were committed for the Philippine courts have no jurisdiction over the case.

Garcia Vs Chief of Staff (G.R. No. L-20213; 16 SCRA 120) Constitutional Law

MARIANO E. GARCIA, plaintiff-appellant,

vs.

THE CHIEF OF STAFF and THE ADJUTANT GENERAL, ARMED FORCES OF THE PHILIPPINES and/or THE CHAIRMAN, PHILIPPINE VETERANS BOARD and/or THE AUDITOR GENERAL OF THE PHILIPPINES,defendants-appellees.

Ponente: REGALA, J.

Action:

This is an appeal from an order of dismissal.

Facts:

On December 1, 1961, the plaintiff Mariano E. Garcia, filed with the lower courts an action to collect a sum of money against the Chief of Staff and the Adjutant General of the Armed Forces of the Philippines et. Al. The complaint alleged: that by reason of the injuries suffered by plaintiff he was deprived of his sight or vision rendering him permanently disabled; and that by reason of the unjustified refusal by defendants of plaintiff's claim, the latter was deprived of his disability pension from totalling no less than P4,000 and suffered thereby moral damages and attorney's fees the amount of P2,000.00.

The PVA and the Chief of Staff of the Armed Forces filed separate motions to dismiss the complaint on the grounds that the plaintiff failed to exhaust all administrative remedies before coming to court; that the complaint states no cause of action; and that the cause of action is barred by the statute of limitations. On March 2, 1962 the lower courts, rendered an order dismissing the complaint on the ground that the action has prescribed. Motion for reconsideration of the said order having been denied, the plaintiff has interposed this appeal.

Issues:

WON the lower court has jurisdiction on the said matter and dismissing the complaint on the ground it being the money claim against the government.

Ruling:

The order dismissing the complaint is hereby affirmed, without pronouncement as to costs.

Ratio Decidendi:

We have to uphold the order of dismissal, not necessarily on the same ground as found by the lower court; but for the reason that the Court of First Instance has no jurisdiction over the subject matter, it being a money claim against the government. A claim for the recovery of money against the government should be filed with the Auditor General, in line with the principle that the State cannot be sued without its consent. As stated in Commonwealth Act 327 in all cases involving the settlement of accounts or claims, other than those of accountable officers, the Auditor General shall act and decide the same within sixty days. The well established rule that no recourse to court can be had until all administrative remedies had been exhausted.

PNB VS PABALAN (G.R. No. L-33112) Constitutional Law

PHILIPPINE NATIONAL BANK, petitioner,

vs.

HON. JUDGE JAVIER PABALAN, Judge of the Court of First Instance, Branch III, La Union, AGOO TOBACCO PLANTERS ASSOCIATION, INC., PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, and PANFILO P. JIMENEZ, Deputy Sheriff, La Union, respondents.

Ponente:

FERNANDO, Acting C.J.

Action: Petition for certiorari and prohibition

Facts:

The case was filed by petitioner requesting for certiorari against the writ of execution authorized by the Hon Judge Pabalan regarding the transfer of funds amounting to P12,724.66 belonging to Philippine Virginia Tobacco Administration (PVTA).

Philippine National Bank (PNB) of La Union filed an administrative complaint against Judge Pabalan for grave abuse of discretion, alleging that the latter failed to recognize that the questioned funds are of public character and therefore may not be garnished, attached or levied upon. The PNB La Union Branch invoked the doctrine of non-suability, putting a bar on the notice of garnishment.

Issues:

1. Whether or not Philippine National Bank can be sued.

2. Whether or not the notice of garnishment of funds of Philippine Virginia Tobacco deposited with the petitioner bank is valid.

Ruling:

WHEREFORE, this petition for certiorari and prohibition is dismissed.

Ratio Decidendi:

PVTA is also a public corporation with the same attributes, a similar outcome is attributed. The government has entered with them into a commercial business hence it has abandoned its sovereign capacity and has stepped down to the level of a corporation. Therefore, it is subject to rules governing ordinary corporations and in effect can be sued. Therefore, the petition of PNB La Union is denied.

The Supreme Court ruled that the funds held by PNB is subject for garnishment. Funds of public corporations which can sue and be sued are not exempt from garnishment. Thus, the writ of execution be imposed immediately.

Republic of the Philippines VS VILLASOR (G.R. No. L-30671) Constitutional Law

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.

HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION, respondents.

Ponente: FERNANDO, J.:

Action:

Petition for certiorari and prohibition

Facts:

A decision was rendered in Special Proceedings in favor of respondents P. J. Kiener Co., Ltd, and against the petitioner herein, confirming the award in the amount of P1,712,396.40, subject of Special Proceedings. The respondent Honorable Guillermo P. Villasor, issued an Order declaring the said decision final and executory, directing the Sheriffs to execute the said decision. The corresponding Alia Writ of Execution was issued. On the strength of the aforementioned Alias Writ of Execution, the Provincial Sheriff of Rizal served Notices of Garnishment. The funds of the Armed Forces of the Philippines on deposit are public funds duly appropriated and allocated for the payment of pensions of retirees, pay and allowances of military and civilian personnel and for maintenance and operations of the AFP.

Petitioner, filed prohibition proceedings against respondent Judge Villasor for acting in excess of jurisdiction with grave abuse of discretion amounting to lack of jurisdiction in granting the issuance of a Writ of Execution against the properties of the AFP, hence the notices and garnishment are null and void.

Issues:

1. Whether or not the state can be sued without its consent.

2. Whether or not the notice of garnishment issued by Judge Villasor is valid.

Ruling: The writs of certiorari and prohibition are granted

Ratio Decidendi:

It is a fundamental postulate of constitutionalism flowing from the juristic concept of sovereignty that the state as well as its government is immune from suit unless it gives its consent. A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends. A continued adherence to the doctrine of non-suability is not to be deplored for as against the inconvenience that may cause private parties, the loss of government efficiency and the obstacle to the performance of its multifarious functions are far greater is such a fundamental principle were abandoned and the availability of judicial remedy were not thus restricted.

What was done by respondent Judge is not in conformity with the dictates of the Constitution. From a logical and sound sense from the basic concept of the non-suability of the State, public funds cannot be the object of a garnishment proceeding even if the consent to be sued had been previously granted and the state liability adjudged. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law.