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Doctrine of State Immunity Ruling/s:

1. TEST No. The doctrine of non-suability of the State has proper application in this case. The plaintiff
has impleaded the Republic of the Philippines as defendant in an action for recovery of
Republic vs Feliciano ownership and possession of a parcel of land, bringing the State to court just like any private
person who is claimed to be usurping a piece of property. A suit for the recovery of property
Doctrine of non-suability of the State is not an action in rem, but an action in personam. It is an action directed against a specific
party or parties, and any judgment therein binds only such party or parties. The complaint
Facts:
filed by plaintiff, the private respondent herein, is directed against the Republic of the
The appeal was filed by 86 settlers of Barrio of Salvacion, representing the Republic of the Philippines, represented by the Land Authority, a governmental agency created by Republic
Philippines to dismiss the complaint filed by Feliciano, on the ground that the Republic of the Act No. 3844.
Philippines cannot be sued without its consent.
The complaint is clearly a suit against the State, which under settled jurisprudence is not
Prior to this appeal, respondent Pablo Feliciano filed a complaint with the Court of First permitted, except upon a showing that the State has consented to be sued, either expressly
Instance against the Republic of the Philippines, represented by the Land Authority, for the or by implication through the use of statutory language too plain to be misinterpreted. There
recovery of ownership and possession of a parcel of land consisting of four lots. The trial court is no such showing in the instant case. Worse, the complaint itself fails to allege the existence
rendered a decision declaring Lot No. 1 to be the private property of Feliciano and the rest of of such consent.
the property, Lots 2, 3 and 4, reverted to the public domain.
Sanders v. Veridano
The trial court reopened the case due to the filing of a motion to intervene and to set aside GR No. L-46930; June 10, 1988
the decision of the trial court by 86 settlers, alleging that they had been in possession of the
land for more than 20 years under claim of ownership. The trial court ordered the settlers to FACTS:
present their evidence but they did not appear at the day of presentation of evidence. Petitioner Dale Sanders was the special services of the US Naval Station (NAVSTA) in
Feliciano, on the other hand, presented additional evidence. Thereafter, the case was Olongapo city. Private respondents Anthony Rossi and Ralph Wyers are American citizens
submitted for decision and the trial court ruled in favor of Feliciano. permanently residing in the Philippines and who were employed as gameroom attendants in
the special services department of NAVSTA. On October 3, 1975, the respondents were
The settlers immediately filed a motion for reconsideration. The case was reopened to allow advised that their employment had been converted from permanent full-time to permanent
them to present their evidence. But before this motion was acted upon, Feliciano filed a part-time. In a letter addressed to petitioner Moreau, Sanders disagreed with the hearing
motion for execution with the Appellate Court but it was denied. officers report of the reinstatement of private respondents to permanent full-time status
plus backwages. Respondents allege that the letters contained libellous imputations which
The settlers filed a motion to dismiss on the ground that the Republic of the Philippines caused them to be ridiculed and thus filed for damages against petitioners.
cannot be sued without its consent and hence the action cannot prosper. The motion was
opposed by Feliciano. ISSUE:
1) Were the petitioners acting officially or only in their private capacities when they did the
Issue/s: acts for which the private respondents sued them for damages?
2) Does the court have jurisdiction over the case?
Whether or not the state can be sued for recovery and possession of a parcel of land.

Discussions: HELD:
It is abundantly clear in the present case that the acts for which the petitioner are being
A suit against the State, under settled jurisprudence is not permitted, except upon a showing called to account were performed by them in the discharge of their official duties. Given the
that the State has consented to be sued, either expressly or by implication through the use of official character of the letters, the petioners were, legally speaking, being sued as officers of
statutory language too plain to be misinterpreted. It may be invoked by the courts sua the United States government. As such, the complaint cannot prosper unless the government
sponte at any stage of the proceedings. 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
Waiver of immunity, being a derogation of sovereignty, will not be inferred lightly. but must States of which they are all citizens and under whose jurisdiction the alleged offenses were
be construed in strictissimi juris (of strictest right). Moreover, the Proclamation is not a committed for the Philippine courts have no jurisdiction over the case.
legislative act. The consent of the State to be sued must emanate from statutory authority.
Waiver of State immunity can only be made by an act of the legislative body. Tan v Director of Forestry

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FACTS: state, or municipal, granting it and the person to whom it is granted; neither is it property or a
property right, nor does it create a vested right; nor is it taxation
Sometime in April 1961, the Bureau of Forestry issued notice advertising for public bidding a
certain tract of public forest land situated in Olongapo, Zambales consisting of 6,420 hectares, The welfare of the people is the supreme law. Thus, no franchise or right can be availed of to
within the former U.S. Naval Reservation comprising 7,252 hectares of timberland, which was defeat the proper exercise of police power.
turned over by the US Government to the Philippine Government. Wenceslao Tan with nine
others submitted their application in due form. The area was granted to the petitioner. On II
May 30, 1963, Secretary Gozon of Agriculture and Natural Resources issued a general
memorandum order authorizing Dir. Of Forestry to grant new Ordinary Timber Licenses (OTL) Petitioner did not exhaust administrative remedy in this case. He did not appeal the order of
subject to some conditions stated therein (not exceeding 3000 hectares for new OTL and not the respondent Secretary of Agriculture and Natural Resources to the President of the
exceeding 5000 hectares for extension) Philippines. Considering that the President has the power to review on appeal the orders or
acts of the respondents, the failure of the petitioner-appellant to take that appeal is failure on
his part to exhaust his administrative remedies.

Thereafter, Acting Secretary of Agriculture and Natural Resources Feliciano (replacing Veterans Manpower and Protective Services, Inc. (VMPSI) v CA
Gozon) promulgated on December 19, 1963 a memorandum revoking the authority delegated
to the Director of Forestry to grant ordinary timber licenses. On the same date, OTL in the FACTS:
name of Tan, was signed by then Acting Director of Forestry, without the approval of the Veterans Manpower and Protective Services, Inc. (VMPSI) alleges that the provisions under
Secretary of Agriculture and Natural Resources. On January 6, 1964, the license Section 4 and 17 of Republic Act No. 5487 or the Private Security Agency Law violate the 1987
was released by the Director of Forestry . Constitution against monopolies, unfair competition and combinations in restraint of trade,
and tend to favor and institutionalize the Philippine Association of Detective and Protective
Ravago Commercial Company wrote a letter to the Secretary of ANR praying that the OTL of Agency Operators, Inc. (PADPAO) which is monopolistic because it has an interest in more
Tan be revoked. On March 9, 1964, The Secretary of ANR declared Tans OTL null and void than one security agency.
(but the same was not granted to Ravago). Petitioner-appellant moved for a reconsideration Respondent VMPSI likewise questions the validity of paragraph 3, subparagraph (g) of the
of the order, but the Secretary of Agriculture and Natural Resources denied the motion. Modifying Regulations on the Issuance of License to Operate and Private Security Licenses
and Specifying Regulations for the Operation of PADPAO issued by then PC Chief Lt. Gen. Fidel
ISSUES: V. Ramos, through Col. Sabas V. Edades, requiring that all private security agencies/company
I. Whether or not petitioners timber license is valid (No) security forces must register as members of any PADPAO Chapter organized within the Region
II. Whether or not petitioner had exhausted administrative remedies available (No) where their main offices are located.... As such membership requirement in PADPAO is
compulsory in nature, it allegedly violates legal and constitutional provisions against
RULING: monopolies, unfair competition and combinations in restraint of trade.
A Memorandum of Agreement was executed by PADPAO and the PC Chief, which fixed the
I minimum monthly contract rate per guard for eight (8) hours of security service per day at
P2,255.00 within Metro Manila and P2,215.00 outside of Metro Manila.
Petitioners timber license was signed and released without authority and is therefore void
Odin Security Agency (Odin) filed a complaint with PADPAO accusing VMPSI of cut-throat
ab initio. In the first place, in the general memorandum dated May 30, 1963, the Director of
competition by undercutting its contract rate for security services rendered to the
Forestry was authorized to grant a new ordinary timber license only where the area covered
Metropolitan Waterworks and Sewerage System (MWSS), charging said customer lower than
thereby was not more than 3,000 hectares; the tract of public forest awarded to the
the standard minimum rates provided in the Memorandum of Agreement dated May 12,
petitioner contained 6,420 hectares In the second place, at the time it was released to the
1986.
petitioner, the Acting Director of Forestry had no more authority to grant any license. (The
license was released to the petitioner onJanuary 6, 1964 while on the other hand, the
PADPAO found VMPSI guilty of cut-throat competition, hence, the PADPAO Committee on
authority of the Director of Forestry to issue license was revoked on December 19, 1963). In
Discipline recommended the expulsion of VMPSI from PADPAO and the cancellation of its
view thereof, the Director of Forestry had no longer any authority to release the license on
license to operate a security agency. The PC-SUSIA affirmed the findings and likewise
January 6, 1964, and said license is therefore void ab initio. What is of greatest importance is
recommended the cancellation of VMPSIs license. As a result, PADPAO refused to issue a
the date of the release or issuance. Before its release, no right is acquired by the licensee.
clearance/certificate of membership to VMPSI.
Granting arguendo, that petitioner-appellant's timber license is valid, still respondents- VMPSI made a request letter to the PC Chief to set aside or disregard the findings of PADPAO
appellees can validly revoke his timber license. "A license is merely a permit or privilege to do and consider VMPSIs application for renewal of its license, even without a certificate of
what otherwise would be unlawful, and is not a contract between the authority, federal, membership from PADPAO.

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ISSUE:
Whether or not VMPSIs complaint against the PC Chief and PC-SUSIA is a suit against the
State without its consent. o Whether or not a public officer may be validly sued in his/her private capacity
for acts done in connection with the discharge of the functions of his/her office
HELD:
Yes. A public official may sometimes be held liable in his personal or private capacity if he acts o Whether or not Article 32, NCC, should be applied instead of Sec. 38, Book I,
in bad faith, or beyond the scope of his authority or jurisdiction, however, since the acts for Administrative Code
which the PC Chief and PC-SUSIA are being called to account in this case, were performed as
part of their official duties, without malice, gross negligence, or bad faith, no recovery may be
had against them in their private capacities. Furthermore, the Supreme Court agrees with the HELD:
Court of Appeals that the Memorandum of Agreement dated May 12, 1986 does not
constitute an implied consent by the State to be sued. The consent of the State to be sued On the first issue, the general rule is that a public officer is not liable for damages which a
must emanate from statutory authority, hence, a legislative act, not from a mere person may suffer arising from the just performance of his official duties and within the scope
memorandum. Without such consent, the trial court did not acquired jurisdiction over the of his assigned tasks. An officer who acts within his authority to administer the affairs of the
public respondents. Petition for review is denied and the judgment appealed from is affirmed office which he/she heads is not liable for damages that may have been caused to another, as
in toto. it would virtually be a charge against the Republic, which is not amenable to judgment for
monetary claims without its consent. However, a public officer is by law not immune from
Vinzons-Chato v Fortune Tobacco Corporation damages in his/her personal capacity for acts done in bad faith which, being outside the
scope of his authority, are no longer protected by the mantle of immunity for official actions.
FACTS:
This is a case for damages under Article 32 of the Civil Code filed by Fortune against Liwayway Specifically, under Sec. 38, Book I, Administrative Code, civil liability may arise where there is
as CIR. bad faith, malice, or gross negligence on the part of a superior public officer. And, under Sec.
On June 10, 1993, the legislature enacted RA 7654, which provided that locally manufactured 39 of the same Book, civil liability may arise where the subordinate public officers act is
cigarettes which are currently classified and taxed at 55% shall be charged an ad valorem tax characterized by willfulness or negligence. In Cojuangco, Jr. V. CA, a public officer who directly
of 55% provided that the maximum tax shall not be less than Five Pesos per pack. Prior to or indirectly violates the constitutional rights of another, may be validly sued for damages
effectivity of RA 7654, Liwayway issued a rule, reclassifying Champion, Hope, and More under Article 32 of the Civil Code even if his acts were not so tainted with malice or bad faith.
(all manufactured by Fortune) as locally manufactured cigarettes bearing foreign brand
subject to the 55% ad valorem tax. Thus, when RA 7654 was passed, these cigarette brands Thus, the rule in this jurisdiction is that a public officer may be validly sued in his/her private
were already covered. capacity for acts done in the course of the performance of the functions of the office, where
In a case filed against Liwayway with the RTC, Fortune contended that the issuance of the rule said public officer: (1) acted with malice, bad faith, or negligence; or (2) where the public
violated its constitutional right against deprivation of property without due process of law officer violated a constitutional right of the plaintiff.
and the right to equal protection of the laws.
On the second issue, SC ruled that the decisive provision is Article 32, it being a special law,
For her part, Liwayway contended in her motion to dismiss that respondent has no cause of which prevails over a general law (the Administrative Code).
action against her because she issued RMC 37-93 in the performance of her official function
and within the scope of her authority. She claimed that she acted merely as an agent of the Article 32 was patterned after the tort in American law. A tort is a wrong, a tortious act
Republic and therefore the latter is the one responsible for her acts. She also contended that which has been defined as the commission or omission of an act by one, without right,
the complaint states no cause of action for lack of allegation of malice or bad faith. whereby another receives some injury, directly or indirectly, in person, property or
reputation. There are cases in which it has been stated that civil liability in tort is determined
The order denying the motion to dismiss was elevated to the CA, who dismissed the case on by the conduct and not by the mental state of the tortfeasor, and there are circumstances
the ground that under Article 32, liability may arise even if the defendant did not act with under which the motive of the defendant has been rendered immaterial. The reason
malice or bad faith. sometimes given for the rule is that otherwise, the mental attitude of the alleged wrongdoer,
and not the act itself, would determine whether the act was wrongful. Presence of good
Hence this appeal. motive, or rather, the absence of an evil motive, does not render lawful an act which is
otherwise an invasion of anothers legal right; that is, liability in tort in not precluded by the
ISSUES: fact that defendant acted without evil intent.

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2. Suit Against Government Agencies and driver of the jeepney, who, in turn, filed a Third Party Complaint against the Municipality
a. Incorporated and its dump truck driver, Alfredo Bislig. Municipality filed its answer and raised the defense
of non-suability of the State. After trial, the court ruled in favor of the plaintiffs and ordered
RAYO vs. CFI of BULACAN Municipality and Bislig to pay jointly and severally the heirs of Bania.
Facts:

1. During the height of typhoon Kading, the National Power Corporations plant
superintendent Chavez opened simultaneously all the three floodgates of the Angat Dam.
ISSUES:
2. As a direct and immediate result, several towns in Bulacan were flooded
(particularly Norzagaray). About a hundred of its residents died and properties worth million 1. Are municipal corporations suable?
of pesos were destroyed.
2. Is the Municipality liable for the torts committed by its employee who was then engaged in
3. The petitioners, who are among the unfortunate victims of the man-caused flood, the discharge of governmental functions?
filed several complaints for damages against NPC and the plant superintendent.
HELD:
4. NPC claimed, as its defense, that in the operation of the Angat Dam, it is
performing a purely governmental function. Thus, it cannot be sued without the express 1. Municipal corporations, like provinces and cities, are agencies of the State when they are
consent of the State. engaged in governmental functions and therefore should enjoy the sovereign immunity from
suit. Nevertheless, they are subject to suit even in the performance of such functions because
5. The petitioners opposed the claim of NPC and claimed that it is performing not
their charter provided that they can sue and be sued.
governmental but merely proprietary functions and that based on the organic charter
(charter - a legal document that provides for the creation of a corporate entity) of NPC, it can
2. Municipal corporations are suable because their charters grant them the competence to
be sued and be sued in any court.
sue and be sued. Nevertheless, they are generally not liable for torts committed by them in
the discharge of governmental functions and can be held answerable only if it can be shown
that they were acting in a proprietary capacity. In permitting such entities to be sued, the
Issue: Whether or not the power of NPC to sue and be sued under its organic charter includes State merely gives the claimant the right to show that the defendant was not acting in its
the power to be sued for tort. governmental capacity when the injury was committed or that the case comes under the
exceptions recognized by law. Failing this, the claimant cannot recover.

In this case, the driver of the dump truck of the municipality insists that "he was on his way to
Held: The government has organized a private corporation, put money in it and has allowed it the Naguilian river to get a load of sand and gravel for the repair of San Fernando's municipal
to sue and be sued in any court under its charter. NPC, as a government owned and streets." In the absence of any evidence to the contrary, the regularity of the performance of
controlled corporation, has a personality of its own, distinct and separate from that of the official duty is presumed. Hence, the driver of the dump truck was performing duties or tasks
Government. In any court, NPC can sue and be sued for tort. The petition of the petitioners pertaining to his office.
was granted.
Decision of the lower court modified. Petitioner municipality was absolved of any
Notes:
liability. (Municipality of San Fernando vs. Firme, No. L-52179, April 8, 1991)
Government-owned and controlled corporations have a personality of their own, separate
Air Transportation Office v Spouses Ramos
and distinct from the government. Therefore, although they are considered to be public in
character, they are not exempt from garnishment (legal proceedings). FACTS: Spouses Ramos own a parcel of land that was being used as part of the runway of
Loakan Airport operated by petitioner Air Transportation Office (ATO). Spouses
Municipality of San Fernando, La Union v Judge Firme
Ramos agreedto sell the subject land to petitioner but the latter failed to pay prompting the
FACTS: A passenger jeepney, a sand truck and a dump truck of the Municipality of San spouses to file a collection suit against ATO.
Fernando, La Union collided. Due to the impact, several passengers of the jeepney including
ISSUE: Whether ATO, an unincorporated government agency not performing a purely
Laureano Bania Sr. died. The heirs of Bania filed a complaint for damages against the owner
governmental function can be sued without its consent

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RULING: Yes. An unincorporated government agency without any separate juridical June 30, 1989, which could mean that they were appointed either before the cut-off date of
personality of its own enjoys immunity from suit because it is invested with an inherent October 31, 1989 or after. Thus, there is not enough basis for this Court to determine that the
power of sovereignty. Accordingly, a claim for damages against the agency cannot prosper; foregoing COA Decision No. 95-074 adversely affects Morales, et al.
otherwise, the doctrine of sovereign immunity is violated. However, the need to distinguish
between an unincorporated government agency performing governmental function and one Morales, et al. filed a Motion to Implement the Writ of Execution, pointing out that the
performing proprietary functions has arisen. The immunity has been upheld in favor of the reason cited in the May 17, 2000 RTC Order for suspension of the implementation of the writ
former because its function is governmental or incidental to such function; it has not been of execution no longer exists given that DBM already denied NEAs request for funding. The
upheld in favor of the latter whose function was not in pursuit of a necessary function of same was denied. The RTC issued an Order dated January 8, 2001, denying the Motion for an
government but was essentially a business. The ATO is an agency of the government not Order to Implement Writ of Execution. A Petition for Certiorari was filed before the CA which
performing a purely governmental or sovereignty function, but was instead involved in the was granted, directing the Implementation of the Writ of Execution. CA held that, being a
management and maintenance of the Loakan airport, an activity that was not the exclusive GOCC, petitioner NEA may be subjected to court processes just like any other corporation;
prerogative of the State in its sovereign capacity. Hence, the ATO had no claim to the State's specifically, its properties may be proceeded against by way of garnishment or levy. Thus, this
immunity from suit. Moreover, the doctrine of sovereign immunity cannot be successfully petition for review.
invoked to defeat a valid claim for compensation arising from the taking without just
compensation and without the proper expropriation proceedings being first resorted to of the ISSUE:
plaintiff's property.
Whether the Court of Appeals (CA) committed an error of law in ordering the implementation
G.R. No. 154200 of a writ of execution against the funds of the National Electrification Administration (NEA).

NATIONAL ELECTRIFICATION ADMINISTRATION vs DANILO MORALES RULING:

July 24, 2007 Meritorious. Respondents cannot proceed against the funds of petitioners because the RTC
Decision sought to be satisfied is not a judgment for a specific sum of money susceptible of
execution by garnishment; it is a special judgment requiring petitioners to settle the claims of
respondents in accordance with existing regulations of the COA.
FACTS:
In its plain text, the RTC Decision merely directs petitioners to settle the claims of
Danilo Morales and 105 other employees of the NEA filed with the RTC, Branch 88, Quezon [respondents] and other employees similarly situated. It does not require petitioners to pay a
City, a class suit against their employer for payment of rice allowance, meal allowance, certain sum of money to respondents. The judgment is only for the performance of an act
medical/ dental /optical allowance, children allowance and longevity pay purportedly other than the payment of money, implementation of which is governed by Section 11, Rule
authorized under RA No. 6758. The RTC granted the petition. Upon Motion, the RTC issued a 39 of the Rules of Court, which provides:
Writ of Execution and a Notice of Garnishment was issued against the funds of NEA with DBP
amounting to P16,581,429.00. NEA filed a Motion to Quash Writs of Execution/Garnishment, Section 11. Execution of special judgments. - When a judgment requires the performance of
claiming that the garnished public funds are exempt from execution under Section 4 of PD No. any act other than those mentioned in the two preceding sections, a certified copy of the
1445, but manifesting that it is willing to pay the claims only that it has no funds to cover the judgment shall be attached to the writ of execution and shall be served by the officer upon
same, although it already requested the Department of Budget and Management (DBM) for a the party against whom the same is rendered, or upon any other person required thereby, or
supplemental budget. RTC denied the Motion to Quash but held in abeyance the by law, to obey the same, and such party or person may be punished for contempt if he
implementation of the Writ of Execution. Morales, et al. filed a Partial Motion for disobeys such judgment.
Reconsideration but the RTC denied it.
Garnishment cannot be employed to implement such form of judgment. Under Section 9 of
In a letter dated June 28, 2000, former DBM Secretary Benjamin E. Diokno informed NEA of Rule 39, to wit:
the denial of its request for a supplemental budget on the ground that the claims under R.A.
No. 6758 which the RTC had ordered to be settled cannot be paid because Morales, et al. are Section 9. Execution of judgments for money, how enforced. -
not incumbents of positions as of July 1, 1989 who are actually receiving and enjoying such
xxxx
benefits. Moreover, in an Indorsement dated March 23, 2000, the COA advised NEA against
making further payments in settlement of the claims of Morales, et al.. Apparently, COA had (c) Garnishment of debts and credits. - The officer may levy on debts due the judgment
already passed upon claims similar to those of Morales, et al. in its earlier Decision dated obligor and other credits, including bank deposits, financial interests, royalties, commissions
January 25, 1995. Records do not indicate when Morales, et al. were appointed. Even the and other personal property not capable of manual delivery in the possession or control of
December 16, 1999 RTC Decision is vague for it merely states that they were appointed after

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third parties. Levy shall be made by serving notice upon the person owing such debts or ISSUE:
having in his possession or control such credits to which the judgment obligor is entitled. The
garnishment shall cover only such amount as will satisfy the judgment and all lawful fees. 1) Who between the petitioner and respondent was negligent?

Garnishment is proper only when the judgment to be enforced is one for payment of a sum 2) Is PNR immune from suit?
of money.
HELD:
Petitioner NEA is a GOCC -- a juridical personality separate and distinct from the government,
with capacity to sue and be sued. As such, NEA cannot evade execution; its funds may be There is no admissible evidence to show that the bus driver did not take necessary precaution
garnished or levied upon in satisfaction of a judgment rendered against it. However, before in traversing the track. Contributory negligence may not be ascribed to the bus driver for he
execution may proceed against it, a claim for payment of the judgment award must first be had taken necessary precautions before passing over the railway track. The failure of PNR, on
filed with the COA. Under Commonwealth Act No. 327, as amended by Section 26 of P.D. No. the other hand, to put a cross bar, or signal light, flagman, or switchman or semaphores is
1445, it is the COA which has primary jurisdiction to examine, audit and settle all debts and evidence of negligence on their part.
claims of any sort due from or owing the Government or any of its subdivisions, agencies and
By the doctrine of implied powers, the power to sue and be sued is implicit from the faculty
instrumentalities, including government-owned or controlled corporations and their
to transact private business. PNR is not exercising governmental powers, as such it is not
subsidiaries. With respect to money claims arising from the implementation of R.A. No. 6758,
immune from suit.
their allowance or disallowance is for COA to decide, subject only to the remedy of appeal by
petition for certiorari to this Court. Bureau of Printing v Bereau of Printing Employees Assoc.
All told, the RTC acted prudently in halting implementation of the writ of execution to allow Facts: BPEA (respondents) filed a complaint by an acting prosecutor of the Industrial Court
the parties recourse to the processes of the COA. It may be that the tenor of against petitioners BOP (secretary of Department of General Services and Director of BOP).
the Indorsement issued by COA already spells doom for respondents claims; but it is not for The complaint alleged that both the secretary of DOG and the director of BOP have been
this Court to pre-empt the action of the COA on the post-audit to be conducted by it. engaging in unfair labor practices. Answering the complaint, the petitioners (BOP), denied the
charges of unfair labor practices attributed to them and alleged that the BPEA complainants
WHEREFORE, the petition is GRANTED. The July 4, 2002 Decision of the Court of Appeals
were suspended pending result of administrative investigation against them for breach of
is REVERSED and SET ASIDE. The Resolution dated December 11, 2000 and Order
Civil Service rules and regulations; that the BOP is not an industrial concern engaged for the
dated January 8, 2001 of the Regional Trial Court, Branch 88,Quezon City in Special Civil
purpose of gain but of the republic performing governmental functions. For relief, they
Action No. Q-99-38275 are REINSTATED.
prayed that the case be dismissed for lack of jurisdiction. But later on January 27, 1959, the
NIA v CA trial judge of Industrial Court sustained the jurisdiction of the court on the theory that the
functions of the BOP are exclusively proprietary in nature, since they receives outside jobs
(None) and that many of its employees are paid for overtime work on regular working days and
holidays, therefore consequently denied the prayed for dismissal, which brought the
b. Unincorporated petitioners (BOP) to present petition for certiorari and prohibition.

PNR v. IAC Issue: Whether or not the BOP can be sued.

GR No. 70547; January 22, 1993 Held: As an office of the Government, without any corporate or juridical personality, the BOP
cannot be sued (Sec.1, Rule 33, Rules of court).

It is true that BOP receives outside jobs and that many of its employees are paid for overtime
FACTS: work on regular working days and holidays, but these facts do not justify the conclusion that
its functions are exclusively proprietary in nature. Overtime work in the BOP is done only
The passenger express train of Philippine National Railways (PNR) and a passenger bus of when the interest of the service so requires. As a matter of administrative policy, the
Baliwag Transit Inc. collided at the railroad crossing at Barrio Balungao, Calumpit Bulacan at overtime compensation may be paid, but such payment is discretionary with the head of the
1:30 in the afternoon of August 10, 1947 causing damage to the bus and its passengers, 18 of Bureau depending upon its current appropriations, so that it cannot be the basis for holding
whom died and 53 suffered physical injuries. Plaintiff alleges that the collision was due to the that the functions of said Bureau are wholly proprietary in character.
negligence and imprudence of PNR and its engineer Honorio Cirbado in operating in a busy
intersection without any bars, semaphores, signal lights, flagman or switchman.

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Any suit, action or proceeding against it, if it were to produce any effect, would actually be a taxation. As an agency, the Bureau of Customs performs the governmental function of
suit, action or proceeding against the Government itself, and the rule is settled that the collecting revenues which is defined not a proprietary function. Thus private respondents
Government cannot be sued without its consent, much less over its jurisdiction. claim for damages against the Commissioner of Customs must fails.

Disposition: The petition for a writ of prohibition is granted. The orders complained of are set Veterans Manpower and Protective Services, Inc v CA
aside and the complaint for unfair labor practice against the petitioners is dismissed, with
costs against respondents other than the respondent court. Veterans Manpower and Protective Services, Inc. (VMPSI) alleges that the provisions under
Section 4 and 17 of Republic Act No. 5487 or the Private Security Agency Law violate the 1987
Farolan vs CTA Constitution against monopolies, unfair competition and combinations in restraint of trade,
and tend to favor and institutionalize the Philippine Association of Detective and Protective
Facts: Agency Operators, Inc. (PADPAO) which is monopolistic because it has an interest in more
than one security agency.
S/S Pacific Hawk vessel with Registry No. 170 arrived on January 30, 1972 at the Port of
Manila carrying among others, 80 bales of screen net consigned to Baging Buhay Trading Respondent VMPSI likewise questions the validity of paragraph 3, subparagraph (g) of the
(Baging Buhay). The import was classified under Tariff Heading no. 39.06-B of the Tariff and Modifying Regulations on the Issuance of License to Operate and Private Security Licenses
Customs Code at 35% ad valorem. Bagong Buhay paid the duties and taxes due in the amount and Specifying Regulations for the Operation of PADPAO issued by then PC Chief Lt. Gen. Fidel
of P11,350.00. V. Ramos, through Col. Sabas V. Edades, requiring that all private security agencies/company
security forces must register as members of any PADPAO Chapter organized within the Region
The Office of the Collector of Customs ordered a re-examination of the shipment upon
where their main offices are located.... As such membership requirement in PADPAO is
hearing the information that the shipment consisted of mosquito net made of nylon under
compulsory in nature, it allegedly violates legal and constitutional provisions against
Tariff Heading No. 62.02 of the Tariff and Customs Code. Upon re-examination, it turns out
monopolies, unfair competition and combinations in restraint of trade.
that the shipment was undervalued in quantity and value as previously declared. Thus the
Collector of Customs forfeited the shipment in favor of the government. A Memorandum of Agreement was executed by PADPAO and the PC Chief, which fixed the
minimum monthly contract rate per guard for eight (8) hours of security service per day at
Private respondent filed a petition on August 20, 1976 for the release of the questioned
P2,255.00 within Metro Manila and P2,215.00 outside of Metro Manila.
goods which the Court denied. On June 2,1986, 64 bales out of the 80 bales were released to
Bagong Buhay after several motion. The sixteen remaining bales were missing. The
Odin Security Agency (Odin) filed a complaint with PADPAO accusing VMPSI of cut-throat
respondent claims that of the 143,454 yards released, only 116,950 yards were in good
competition by undercutting its contract rate for security services rendered to the
condition and the rest were in bad condition. Thus, respondents demands that the Bureau of
Metropolitan Waterworks and Sewerage System (MWSS), charging said customer lower than
Customs be ordered to pay for damages for the 43,050 yards it actually lost.
the standard minimum rates provided in the Memorandum of Agreement dated May 12,
Issue: 1986.

Whether or not the Collector of Customs may be held liable for the 43,050 yards actually lost PADPAO found VMPSI guilty of cut-throat competition, hence, the PADPAO Committee on
by the private respondent. Discipline recommended the expulsion of VMPSI from PADPAO and the cancellation of its
license to operate a security agency. The PC-SUSIA affirmed the findings and likewise
Held: recommended the cancellation of VMPSIs license. As a result, PADPAO refused to issue a
clearance/certificate of membership to VMPSI.
Bureau of Customs cannot be held liable for actual damages that the private respondent
sustained with regard to its goods. Otherwise, to permit private respondent's claim to prosper VMPSI made a request letter to the PC Chief to set aside or disregard the findings of PADPAO
would violate the doctrine of sovereign immunity. Since it demands that the Commissioner of and consider VMPSIs application for renewal of its license, even without a certificate of
Customs be ordered to pay for actual damages it sustained, for which ultimately liability will membership from PADPAO.
fall on the government, it is obvious that this case has been converted technically into a suit
against the state. ISSUE:
On this point, the political doctrine that state may not be sued without its consent,
Whether or not VMPSIs complaint against the PC Chief and PC-SUSIA is a suit against the
categorically applies. As an unincorporated government agency without any separate judicial
State without its consent.
personality of its own, the Bureau of Customs enjoys immunity from suit. Along with the
Bureau of Internal Revenue, it is invested with an inherent power of sovereignty, namely
HELD:

7
Rulings:
Yes. A public official may sometimes be held liable in his personal or private capacity if he acts
in bad faith, or beyond the scope of his authority or jurisdiction, however, since the acts for Yes. The Supreme Court ruled that the Bureau of Customs cannot be sued for recovery of
which the PC Chief and PC-SUSIA are being called to account in this case, were performed as money and damages involving arrastre services, considering that said arrastre function may
part of their official duties, without malice, gross negligence, or bad faith, no recovery may be be deemed proprietary, because it is a necessary incident of the primary and governmental
had against them in their private capacities. Furthermore, the Supreme Court agrees with the function of the Bureau of Customs. The Court ruled that the fact that a non-corporate
Court of Appeals that the Memorandum of Agreement dated May 12, 1986 does not government entity performs a function proprietary in nature does not necessarily result in its
constitute an implied consent by the State to be sued. The consent of the State to be sued being suable. If said non-governmental function is undertaken as an incident to its
must emanate from statutory authority, hence, a legislative act, not from a mere governmental function, there is no waiver thereby of the sovereign immunity from suit
memorandum. Without such consent, the trial court did not acquired jurisdiction over the extended to such government entity. The Supreme Court ruled that the plaintiff should have
public respondents. Petition for review is denied and the judgment appealed from is affirmed filed its present claim to the General Auditing Office, it being for money under the provisions
in toto. of Commonwealth Act 327, which state the conditions under which money claims against the
Government may be filed.
Mobil PH Exploration v Customs Arrastre Service

Facts:
Civil Aeronautics Administration v CA
This case was filed by Mobil Phil Exploration Inc. against the Customs Arrastre Service and the
Bureau of Customs to recover the value of the undelivered case of rotary drill parts. FACTS: Ernest Simke was a naturalized Filipino and was Honorary Consul Geileral of Israel in
the Philippines. In December 1968, respondent went to the Manila International Airport to
Four cases of rotary drill parts were shipped from abroad, consigned to Mobil Philippines meet his future son-in-law. While walking on the terrace, Simke slipped over an elevation, fell
Exploration, Inc. The shipment was discharged to the custody of the Customs Arrastre Service, on his back and broke his thigh.He was operated on but filed for damages under quasi-delict
the unit of the Bureau of Customs then handling arrastre operations therein. The Customs (or negligence) against CAA as the entity empowered to administer, operate, manage,
Arrastre Service later delivered to the broker of the consignee three cases only of the control, maintain and develop the Manila International Airport (RA 776). Trial Court and CA
shipment. Mobil Philippines Exploration, Inc filed suit in the Court of First Instance of Manila ruled in favor of Simke.
against the Customs Arrastre Service and the Bureau of Customs to recover the value of the
undelivered case plus other damages. ISSUE: Is the suit against the CAA effectively against the Republic of the Philippines, which
cannot be sued without its consent?
Defendants filed a motion to dismiss the complaint on the ground that not being persons
under the law, defendants cannot be sued. Appellant contends that not all government HELD: NO
entities are immune from suit; that defendant Bureau of Customs as operator of the arrastre
service at the Port of Manila, is discharging proprietary functions and as such, can be sued by RATIO DECIDENDI: Executive Order 365 (Reorganizing the CAA and Abolishing the National
private individuals. Airports Corporation) was interpreted by the Court as giving the CAA the status of a private
entity. RA 776 (Civil Aeronautics Act) amends the EO but retains most of pertinent provisions
Issues: of EO 365. Citing National Airports Corporation vs Teodoro, court held that the CAA, which
replaced the National Airports Corporation, is engaged in solely private functions and thus has
Whether or not both Customs Arrastre Service and the Bureau of Customs can invoke state no sovereign immunity and can sue or be sued. They cite Sec. 32 (24 and 25) which defines
immunity. powers of the administrator. The nature of its functions is private.

Discussions:

The Bureau of Custom, is a part of Department of Finance. It does not have a separate
juridical personality of its own apart from that of the national government. Its primary
function is governmental, that of assessing and collecting lawful revenues from imported
articles and all other tariff and customs duties, fees, charges, fines and penalties (Sec. 602,
R.A. 1937). To this function, arrastre service is a necessary incident. As stated in the law,
agencies of the government is not suable if it is performing governmental functions and if it
an unincorporated government entity without a separate juridical personality.

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