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State Immunity From Suit:

A Basic Guide
By Atty. Alexis F. Medina1
San Sebastian College-Recoletos, Institute of Law

Sections 3, Article XVI of the Constitution provides:

The State may not be sued without its consent.

STATE IMMUNITY DOCTRINE

IN GENERAL
Doctrine of state immunity from suit
Nothing is better settled than the general rule that a sovereign state
and its political subdivisions cannot be sued in the courts except when it has
given its consent. (Republic v. Sandoval, 19 March 1993)
The Republic cannot be proceeded against unless it allows itself to be
sued. Neither can a department, bureau, agency, office, or instrumentality of
the government where the suit, may result "in adverse consequences to the
public treasury, whether in the disbursements of funds or loss of property.
Such a doctrine was reiterated in the following cases: Republic v. Villasor,
Sayson v. Singson, Director of the Bureau of Printing v. Francisco, and
Republic v. Purisima. (Santiago v. Republic, G.R. No. L-48214, 19 December
1978)
Logical/practical basis
There can be no legal right as against the authority that makes the law
on which the right depends. (Department of Agriculture v. National Labor
Relations Commission, G.R. No. 104269. November 11, 1993; Republic v.
Villasor, G.R. No. L-30671 28 November 1973; Professional Video v. Technical

Atty. Alexis F. Medina. AB Political Science, University of the Philippines (UP),

Diliman;
Order of the Purple Feather, UP, College of Law; Valedictorian, San
Sebastian College, Manila, Institute of Law; Associate, Ponce Enrile Reyes &
Manlastas
Law
Offices
(Pecabar);
Member,
Alpha
Phi
Beta Fraternity, UP College of Law.

2|Page
and Educational Skills Development Authority [Tesda], G.R. No. 155504, June
26, 2009)
The loss of governmental efficiency and the obstacle to the
performance of its multifarious functions would be far greater in severity than
the inconvenience that may be caused private parties, if such fundamental
principle is to be abandoned. (Department of Agriculture v. National Labor
Relations Commission, G.R. No. 104269. November 11, 1993)
It also rests on reasons of public policy that public service would be
hindered, and the public endangered, if the sovereign authority could be
subjected to law suits at the instance of every citizen and consequently
controlled in the uses and dispositions of the means required for the proper
administration of the government. (Republic v. Sandoval 19 March 1993;
Professional Video v. Technical and Educational Skills Development Authority
[Tesda], G.R. No. 155504, June 26, 2009)
State immunity as the royal prerogative of dishonesty
The doctrine of state immunity from suit is also called "the royal
prerogative of dishonesty" because it grants the state the prerogative to
defeat any legitimate claim against it by simply invoking its non-suability.
(Department of Agriculture v. NLRC 11 November 1993)

APPLICATION OF THE STATE IMMUNITY DOCTRINE

TO THE PHILIPPINE STATE
How to apply the state immunity doctrine to specific cases
involving the Philippine State
Step 1.

Determine if the suit qualifies as a suit against the

State.
Step 2. If it is a suit against the State, determine if there is an
express consent to be sued.
Step 3. If there is no express consent, determine if there is an
implied consent to be sued.
Step 4.
Even if there is no consent, express or implied,
determine if the case falls under the exceptions to the general rule of
state immunity from suit.

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Step 5.

Even if the State can be sued, determine if it is liable.

Step 6. If the State is liable, determine if there can be execution

against it.
Step 7. If execution is not allowed, determine how recovery can
be made against the State.

Step 1: Determine if the suit qualifies as a suit against the

State
Some instances of a suit against the State:
(1)

When the Republic is sued by name;

(2)

When the suit is against an unincorporated government agency;

(3)
When the suit is on its face against a government officer but the
case is such that ultimate liability will belong not to the officer but to the
government. (Republic v. Sandoval 19 March 1993) When the complaint is
filed against officials of the state for acts allegedly performed by them in the
discharge of their duties, the suit is regarded as one against the state where
satisfaction of the judgment against the officials will require the state itself to
perform a positive act, such as the appropriation of the amount necessary to
pay the damages awarded against them. (Shauf v. Court of Appeals, G.R. No.
90314, November 27, 1990, 191 SCRA 713; Professional Video v. Technical
and Educational Skills Development Authority [Tesda], G.R. No. 155504, June
26, 2009)
Cases when the state immunity doctrine does not apply
1) Relief does not requires action by the State
The principle of state immunity from suit does not apply when
the relief demanded by the suit requires no affirmative official action
on the part of the State nor the affirmative discharge of any obligation
which belongs to the State in its political capacity, even though the
officers or agents who are made defendants claim to hold or act only
by virtue of a title of the state and as its agents and servants.
(Republic v. Sandoval 19 March 1993)
2) When the act of the public officer is ultra vires, or in
bad faith, or with malice or gross negligence
When the public official has committed an ultra vires act or
where there is a showing of bad faith, malice or gross negligence, the

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public officer can be held personally liable even if such acts are
claimed to have been performed in connection with official duties.
(Wylie v. Rarang 209 SCRA 357) A public officer is by law not immune
from 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. (Vinzons-Chato v.
Fortune Tobacco, 19 June 2007)

Step 2:
sued
1)

Determine if there is an EXPRESS CONSENT to be

UNINCORPORATED GOVT AGENCIES:

First View:
The State consents to be sued on money claims involving
liability arising from contract under Act 3083. But the claim
must be filed with the Commission on Audit, under CA 327 and
PD 1445.
Express consent may be made through a general law or a
special law. In this jurisdiction, the general law waiving the immunity of
the state from suit is found in Act No. 3083, where the Philippine
government "consents and submits to be sued upon any money claim
involving liability arising from contract, express or implied, which could
serve as a basis of civil action between private parties."
Act No. 3083, aforecited, gives the consent of the State to be
"sued upon any moneyed claim involving liability arising from contract,
express or implied, . . ." Pursuant, however, to Commonwealth Act
("C.A.") No. 327, as amended by Presidential Decree ("P.D.") No. 1445,
the money claim should first be brought to the Commission on Audit.
"(C)laimants have to prosecute their money claims against the
Government under Commonwealth Act 327, stating that Act 3083
stands now merely as the general law waiving the State's immunity
from suit, subject to its general limitation expressed in Section 7
thereof that 'no execution shall issue upon any judgment rendered by
any Court against the Government of the (Philippines), and that the
conditions provided in Commonwealth Act 327 for filing money claims
against the Government must be strictly observed.' "(Department of
Agriculture v. NLRC, 11 November 1993)

Note however that State consent to be sued under Act

3083 extends only to liabilities arising from contract, not torts.
Also, the State consenting to be sued is the Philippine State, not
any foreign State.
Second View:

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However, in the following cases, the Supreme Court did

not cite any express consent to be sued on money claims
arising from contract. Instead, the Supreme Court used as
basis in dismissing the cases the lack of implied State consent
when unincorporated government agencies entered into
contracts in the exercise of their sovereign or governmental
functions. However, the Supreme Court ruled that the money
claims may still be filed with the Commission on Audit,
pursuant to Act No. 327.

In Mobil Philippines Corp. v. Customs Arrastre Services (G.R. No.

L-23139, 17 December 1966), the Supreme Court ruled that the
Bureau of Customs cannot be sued for recovery of money and
damages involving arrastre services, considering that said arrastre
function may be deemed proprietary, because it is a necessary
incident of the primary and governmental function of the Bureau of
Customs. The Court ruled that the fact that a non-corporate
government entity performs a function proprietary in nature does not
necessarily result in its being suable. If said non-governmental function
is undertaken as an incident to its governmental function, there is no
waiver thereby of the sovereign immunity from suit extended to such
government entity. The Supreme Court ruled that the plaintiff should
have filed its present claim to the General Auditing Office, it being for
money under the provisions of Commonwealth Act 327, which state the
conditions under which money claims against the Government may be
filed.
In Professional Video v. Technical and Educational Skills
Development Authority [Tesda], G.R. No. 155504, June 26, 2009, the
Supreme Court ruled that TESDA cannot be sued for recovery of sum of
money and damages on a contract for the supply of PVC cards to be
used as ID of TESDA trainees who passed TESDAs National Skills
Certification Program the program that immediately serves TESDAs
mandated function of developing and establishing a national system of
skills standardization, testing, and certification in the country. TESDA
performs governmental functions, and the issuance of certifications is
a task within its function of developing and establishing a system of
skills standardization, testing, and certification in the country. From the
perspective of this function, the core reason for the existence of state
immunity applies i.e., the public policy reason that the performance
of governmental function cannot be hindered or delayed by suits, nor
can these suits control the use and disposition of the means for the
performance of governmental functions. Here, however, the Supreme
Court did not make any mention of the remedy of filing a claim with
the Commission on Audit.

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2)

INCORPORATED GOVT AGENCIES

Express consent based on their charter. An

unincorporated government agencies may be used if its
charter expressly provides that it can sue and be sued.
An incorporated agency has a charter of its own that
invests it with a separate juridical personality, like the Social
Security System, the University of the Philippines, and the City of
Manila. By contrast, the unincorporated agency is so called
because it has no separate juridical personality but is merged in
the general machinery of the government, like the Department of
Justice, the Bureau of Mines and the Government Printing Office.
If the agency is incorporated, the test of its suability is
found in its charter. The simple rule is that it is suable if its
charter says so, and this is true regardless of the functions it is
performing. Municipal corporations, for example, like provinces
and cities, are agencies of the State when they are 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 their charter provides
that they can sue and be sued.
State immunity from suit may be waived by general or
special law. The special law can take the form of the original
charter of the incorporated government agency. Jurisprudence is
replete with examples of incorporated government agencies
which were ruled not entitled to invoke immunity from suit,
owing to provisions in their charters manifesting their consent to
be sued. These include the National Irrigation Administration, the
former Central Bank, and the National Power Corporation. In SSS
v. Court of Appeals, the Court through Justice Melencio-Herrera
explained that by virtue of an express provision in its charter
allowing it to sue and be sued, the Social Security System did not
enjoy immunity from suit. (German Agency For Technical
Cooperation v. Court of Appeals, G.R. No. 152318, 16 April 2009)
(emphasis supplied)
A GOCC with original charter is not immune from
suit, whether or not it performs governmental functions.
A government-owned and controlled corporation "has a
personality of its own distinct and separate from that of the
government. Accordingly, it may sue and be sued and may be

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subjected to court processes just like any other corporation. (Santiago
v. Republic, G.R. No. L-48214, 19 December 1978; National Shipyard
and Steel Corporation v. Court of Industrial Relations, 118 Phil. 782)

A GOCC with original charter may be even be sued

for torts.
A government owned or controlled corporation with an
original charter, whether or not it perform a governmental
function, has a personality of its own, distinct and separate from
that of the Government. If the charter provision says that it can
'sue and be sued in any court,' without qualification on the cause
of action, thus it can include a tort claim. (See Rayo v. Court of
First Instance of Bulacan, 110 SCRA 457 [1981])

3)

LOCAL GOVTS:

Express consent under the Local Government Code

and/or charter
One of the corporate powers of local government units is to
sue and be sued. (See Section 22, Local Government Code)
Municipal corporations, for example, like provinces and
cities, are agencies of the State when they are 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 their
charter provides that they can sue and be sued. (German
Agency For Technical Cooperation v. Court of Appeals, G.R. No.
152318, 16 April 2009)(emphasis supplied)

Step 3.

Determine if there is an IMPLIED CONSENT to be sued

Implied consent, on the other hand, is conceded when the State

itself
1) commences litigation, thus opening itself to a counterclaim

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2) or when it enters into a contract.
Not all contracts entered into by the government operate as a
waiver of its non-suability. Distinguish
a) sovereign and governmental acts (jure imperii) and
b) private, commercial and proprietary acts (jure gestionis). The
State immunity now extends only to acts jure imperii.
(see Department of Agriculture v. National
Commission, G.R. No. 104269. November 11, 1993)

Labor

Relations

A State may be said to have descended to the level of an

individual and can thus be deemed to have tacitly given its consent to
be sued only when it enters into business contracts. It does not apply
where the contracts relates to the exercise of its sovereign functions.
(Department of Agriculture v. National Labor Relations Commission, G.R. No.
104269. November 11, 1993)

Step 4. Determine if the case falls under the exceptions to the

general rule of state immunity from suit
GENERAL RULE:
The state may not be sued without its consent.
EXCEPTIONS:
In these cases, the State may still be sued even if it
has no consent
1)
a public officer may be sued to compel him to do an
act required by law;
2)
a public officer may be sued to restrain him from
enforcing a law claimed to be unconstitutional;
3)
a public officer may be sued to compel an officer to
pay damages from an already appropriate assurance fund or a

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revenue officer to refund tax overpayments from a fund already
available for such purpose;
4)
an action may be filed to secure a judgment that the
officer impleaded may satisfy himself without the government
itself having to do a positive act to assist him;
5)
where the government itself has violated its own
laws, the aggrieved party may directly implead the government
even without first filing his claim with the Commission on Audit,
as the doctrine of state immunity cannot be used as an
instrument for perpetrating an injustice. (Sanders v. Veridiano,
10 June 1988)
The doctrine of state immunity from suit cannot serve as
an instrument for perpetrating an injustice.
In Amigable vs. Cuenca, the Supreme Court, in effect, shred the
protective shroud which shields the State from suit, reiterating the decree in
the landmark case of Ministerio vs. CFI of Cebu[ that the doctrine of
governmental immunity from suit cannot serve as an instrument for
perpetrating an injustice on a citizen. It is just as important, if not more so,
that there be fidelity to legal norms on the part of officialdom if the rule of
law were to be maintained. (EPG Construction v. Vigilar, 16 March 2001)
Amigable filed in the court a complaint against the Republic of the
Philippines and Nicolas Cuenca, in his capacity as Commissioner of Public
Highways for the recovery of ownership and possession of the 6,167 square
meters of land traversed by the Mango and Gorordo Avenues. She also
sought the payment of compensatory damages in the sum of P50,000.00 for
the illegal occupation of her land, moral damages in the sum of P25,000.00,
attorney's fees in the sum of P5,000.00 and the costs of the suit. The
government contended that the suit was premature because no claim having
been filed first before the Office of the Auditor General. Nevertheless, the
Supreme Court
ruled that the government should pay Amigable just
compensation for the land, plus damages in the form of legal interest on the
price of the land from the time it was taken up to the time that payment is
made by the government, and attorneys fees. Citing Ministerio vs. Court of
First Instance of Cebu, the Supreme Court declared that where the
government takes away property from a private landowner for public use
without going through the legal process of expropriation or negotiated sale,
the aggrieved party may properly maintain a suit against the government
without thereby violating the doctrine of governmental immunity from suit
without its consent. The doctrine of governmental immunity from suit
cannot serve as an instrument for perpetrating an injustice on a
citizen. When the government takes any property for public use, which is
conditioned upon the payment of just compensation, to be judicially
ascertained, it makes manifest that it submits to the jurisdiction of a court.

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There is no thought then that the doctrine of immunity from suit could still be
appropriately invoked. (Amigable vs. Cuenca , G.R. No. L-26400 29 February
1972) (emphasis supplied)
In Republic v. UniMex Micro-Electronics (G.R. Nos. 166309-10, March 9,
2007), the Supreme Court ordered the Bureau of Customs to pay the value of
the goods that were lost in the BOCs custody, declaring that the situation
does not allow us to reject respondents claim on the mere invocation of the
doctrine of state immunity. Succinctly, the doctrine must be fairly observed
and the State should not avail itself of this prerogative to take undue
advantage of parties that may have legitimate claims against it.
Citing Department of Health v. C.V. Canchela & Associates, the Supreme
Court declared that it cannot sanction an injustice so patent in its face, and
allow itself to be an instrument in the perpetration thereof. Justice and equity
now demand that the States cloak of invincibility against suit and liability be
shredded.

Step 5. Determine if the State is liable

When the State waives its immunity, all it does, in effect, is to give the
other party an opportunity to prove, if it can, that the State has a liability.
(Department of Agriculture v. National Labor Relations Commission, G.R. No.
104269. November 11, 1993)

Step 6. Determine if the State funds or property can be

subject to execution
Consent to be sued does not mean consent to execution.
Even though the rule as to immunity of a state from suit is relaxed, the
power of the courts ends when the judgment is rendered. (City of Caloocan v.
Allarde, G.R. No. 107271, September 10, 2003
When the State gives its consent to be sued, it does not thereby
necessarily consent to an unrestrained execution against it. In Republic vs.
Villasor this Court, in nullifying the issuance of an alias writ of execution
directed against the funds of the Armed Forces of the Philippines to satisfy a
final and executory judgment, has explained, thus The universal rule that
where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant's action "only up to the
completion of proceedings anterior to the stage of execution" and that the
power of the Courts ends when the judgment is rendered. (Department of

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Agriculture v. National Labor Relations Commission, G.R. No. 104269.
November 11, 1993)
The universal rule that where the State gives its consent to be sued by
private parties either by general or special law, it may limit claimant's action
"only up to the completion of proceedings anterior to the stage of execution"
and that the power of the Courts ends when the judgment is rendered. (The
Commissioner of Public Highways v. San Diego, G.R. No. L-30098, February
18, 1970)
In Republic vs. Villasor this Court, in nullifying the issuance of an alias
writ of execution directed against the funds of the Armed Forces of the
Philippines to satisfy a final and executory judgment, has explained, thus
The universal rule that where the State gives its consent to be sued by
private parties either by general or special law, it may limit claimant's action
"only up to the completion of proceedings anterior to the stage of execution"
and that the power of the Courts ends when the judgment is rendered, since
government funds and properties may not be seized under writs of execution
or garnishment to satisfy such judgments, is based on obvious considerations
of public policy. Disbursements of public funds must be covered by the
correspondent appropriation as required by law. (Department of Agriculture v.
National Labor Relations Commission, G.R. No. 104269. November 11, 1993)

RULES ON EXECUTION AGAINST THE STATE

1.
AGENCIES

Execution against UNINCORPORATED GOVT

RULE:
Public funds cannot be the object of garnishment.
Funds and properties of unincorporated government
agencies are exempt from execution and garnishment.
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. (Republic v. Villasor, G.R. No. L-30671 28
November 1973)

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In Republic vs. Villasor this Court, in nullifying the issuance of an
alias writ of execution directed against the funds of the Armed Forces
of the Philippines to satisfy a final and executory judgment, has
explained, thus The universal rule that where the State gives its
consent to be sued by private parties either by general or special law,
it may limit claimant's action "only up to the completion of proceedings
anterior to the stage of execution" and that the power of the Courts
ends when the judgment is rendered. (Department of Agriculture v.
National Labor Relations Commission, G.R. No. 104269. November 11,
1993)
Even assuming that TESDA entered into a proprietary contract
with PROVI and thereby gave its implied consent to be sued, TESDAs
funds are still public in nature and, thus, cannot be the valid subject of
a writ of garnishment or attachment. Under Section 33 of the TESDA
Act, the TESDA budget for the implementation of the Act shall be
included in the annual General Appropriation Act; hence, TESDA funds,
being sourced from the Treasury, are moneys belonging to the
government, or any of its departments, in the hands of public officials.
Public funds cannot be the object of garnishment proceedings 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. (Professional
Video v. Technical and Educational Skills Development Authority
[Tesda], G.R. No. 155504, June 26, 2009)
All government funds deposited with it by any agency or
instrumentality of the government, whether by way of general or
special deposit, remain government funds, since such government
agencies or instrumentalities do not have any non-public or private
funds of their own. (The Commissioner of Public Highways v. San
Diego, G.R. No. L-30098, February 18, 1970)
The rule is and has always been that all government funds
deposited in the PNB or any other official depositary of the Philippine
Government by any of its agencies or instrumentalities, whether by
general or special deposit, remain government funds and may not be
subject to garnishment or levy, in the absence of a corresponding
appropriation as required by law. (City of Caloocan v. Allarde, G.R. No.
107271, September 10, 2003
Reason for the rule
That government funds and properties may not be seized
under writs of execution or garnishment to satisfy such
judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the

13 | P a g e
correspondent 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.
(Department of Agriculture v. National Labor Relations
Commission, G.R. No. 104269.
November 11, 1993; The
Commissioner of Public Highways v. San Diego, G.R. No. L30098, February 18, 1970)

2.
EXECUTION
AGENCIES

AGAINST

INCORPORATED

GOVT

GEN. RULE:
Funds and properties of incorporated government
agencies may be subject to execution.
In Philippine National Railways v. Union de Maquinistas, et al.,
then Justice Fernando, later Chief Justice, said. "The main issue posed
in this certiorari proceeding, whether or not the funds of the Philippine
National Railways, could be garnished or levied upon on execution was
resolved in two recent decisions, the Philippine National Bank v. Court
of Industrial Relations [81 SCRA 314] and Philippine National Bank v.
Hon. Judge Pabalan [83 SCRA 595]. This Court in both cases answered
the question in the affirmative. There was no legal bar to garnishment
or execution. The argument based on non-suability of a state allegedly
because the funds are governmental in character was unavailing.So it
must be again."
In support of the above conclusion, Justice Fernando cited the
Court's holding in Philippine National Bank v. Court of Industrial
Relations, to wit: "The premise that the funds could be spoken of as
public in character may be accepted in the sense that the People's
Homesite and Housing Corporation was a government-owned entity. It
does
not
follow
though
that
they
were
exempt
from
garnishment. National Shipyard and Steel Corporation v. Court of
Industrial Relations is squarely in point. As was explicitly stated in the
opinion of then Justice, later Chief Justice, Concepcion: "The allegation
to the effect that the funds of the NASSCO are public funds of the
government, and that, as such, the same may not be garnished,
attached or levied upon, is untenable for, as a government- owned and
controlled corporation, the NASSCO has a personality of its own,
distinct and separate from that of the Government. It has-pursuant to
Section 2 of Executive Order No. 356, dated October 23, 1950,
pursuant to which the NASSCO has been established- all the powers of

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a corporation under the Corporation Law. (Philippine National Railways
v. Court of Appeals, G.R. No. L-55347 October 4, 1985)

EXCEPTION TO THE GEN. RULE:

Public funds of local governments are not subject to
execution
The funds of the Municipality of San Miguel, Bulacan, in the
hands of the provincial and municipal treasurers of Bulacan and San
Miguel, respectively, are public funds which are exempt from execution
for the satisfaction of the money judgment in Civil Case No. 604-B. Well
settled is the rule that public funds are not subject to levy and
execution. The reason for this is that they are held in trust for the
people, intended and used for the accomplishment of the purposes for
which municipal corporations are created, and that to subject said
properties and public funds to execution would materially impede,
even defeat and in some instances destroy said purpose." And, in
Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was held that "it is
the settled doctrine of the law that not only the public property but
also the taxes and public revenues of such corporations Cannot be
seized under execution against them, either in the treasury or when in
transit to it. Judgments rendered for taxes, and the proceeds of such
judgments in the hands of officers of the law, are not subject to
execution unless so declared by statute." Moreover, under Presidential
Decree No. 477, known as "The Decree on Local Fiscal Administration",
Section 2 (a), there must be a corresponding appropriation in the form
of an ordinance duly passed by the Sangguniang Bayan before any
money of the municipality may be paid out. (Municipality of San Miguel
Bulacan v. Fernandez, G.R. No. L-61744, 25 June 1984)

EXCEPTION TO THE EXCEPTION:

Public funds of local government units may subject
to execution if there is already a corresponding
appropriation as required by law
However, the rule is not absolute and admits of a welldefined exception, that is, when there is a corresponding
appropriation as required by law. Otherwise stated, the rule on
the immunity of public funds from seizure or garnishment does
not apply where the funds sought to be levied under execution
are already allocated by law specifically for the satisfaction of
the money judgment against the government. In such a case,
the monetary judgment may be legally enforced by judicial
processes.

15 | P a g e
Thus, in the similar case of Pasay City Government, et al.
vs. CFI of Manila, Br. X, et al., where petitioners challenged the
trial courts order garnishing its funds in payment of the contract
price for the construction of the City Hall, we ruled that, while
government funds deposited in the PNB are exempt from
execution or garnishment, this rule does not apply if an
ordinance has already been enacted for the payment of the
Citys obligations.
In the instant case, the City Council of Caloocan already
approved and passed Ordinance No. 0134, Series of 1992,
allocating the amount of P439,377.14 for respondent Santiagos
back salaries plus interest. Thus this case fell squarely within the
exception. For all intents and purposes, Ordinance No. 0134,
Series of 1992, was the "corresponding appropriation as required
by law." The sum indicated in the ordinance for Santiago were
deemed automatically segregated from the other budgetary
allocations of the City of Caloocan and earmarked solely for the
Citys monetary obligation to her. The judgment of the trial court
could then be validly enforced against such funds. (City of
Caloocan v. Allarde, G.R. No. 107271, September 10, 2003)

Step 7. If execution is not allowed, determine how recovery

can be made against the State.

Money claims against unincorporated government

agencies must be filed with the Commission on Audit
The claims of private respondents, i.e., for underpayment of wages,
holiday pay, overtime pay and similar other items, arising from the Contract
for Security Services, clearly constitute money claims. Act No. 3083,
aforecited, gives the consent of the State to be "sued upon any moneyed
claim involving liability arising from contract, express or implied, . . ."
Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by
Presidential Decree ("P.D.") No. 1445, the money claim should first be brought
to the Commission on Audit. (Department of Agriculture v. National Labor
Relations Commission, G.R. No. 104269. November 11, 1993)
Act 3083, the general law waiving its immunity from suit "upon any
money claim involving liability arising from contract express or implied,"
imposed the limitation in Sec. 7 thereof that "no execution shall issue upon
any judgment rendered by any Court against the Government of the
(Philippines) under the provisions of this Act;" and that otherwise, the

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claimant would have to prosecute his money claim against the State under
Commonwealth Act 327. (Belleng v. Republic, L-19856, Nov. 16, 1963 [9
SCRA 6])
Claimants have to prosecute their money claims against the
Government under Commonwealth Act 327, stating that Act 3083 stands now
merely as the general law waiving the State's immunity from suit, subject to
the general limitation expressed in Section 7 thereof that "no execution shall
issue upon any judgment rendered by any Court against the Government of
the (Philippines), and that the conditions provided in Commonwealth Act 327
for filing money claims against the Government must be strictly observed.
(Carabao Inc. v. Agricultural Productivity Commission, G.R. No. L-29304, 30
September 1970; see also Mobil Philippines Explorers v. Customs Arrastre
Service, G.R. No. L-26994, 28 November 1969)
It is apparent that respondent Singson's cause of action is a money
claim against the government, for the payment of the alleged balance of the
cost of spare parts supplied by him to the Bureau of Public Highways.
Assuming momentarily the validity of such claim, mandamus is not the
remedy to enforce the collection of such claim against the State but a
ordinary action for specific performance. Actually, the suit disguised as one
for mandamus to compel the Auditors to approve the vouchers for payment,
is a suit against the State, which cannot prosper or be entertained by the
Court except with the consent of the State. In other words, the respondent
should have filed his claim with the General Auditing Office, under the
provisions of Com. Act 327, which prescribe the conditions under which
money
claim
against
the
government
may
be
filed. Commonwealth Act No. 327 provided: "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, exclusive
of Sundays and holidays, after their presentation. If said accounts or claims
need reference to other persons, office or offices, or to a party interested, the
period aforesaid shall be counted from the time the last comment necessary
to a proper decision is received by him." Thereafter, the procedure for appeal
is indicated: "The party aggrieved by the final decision of the Auditor General
in the settlement of an account or claim may, within thirty days from receipt
of the decision, take an appeal in writing: (a) To the President of the United
States, pending the final and complete withdrawal of her sovereignty over the
Philippines, or (b) To the President of the Philippines, or (c) To the Supreme
Court of the Philippines if the appellant is a private person or entity." (Sayson
v. Singson, G.R. No. L-30044, 19 December 1973)
Note however that in Amigable vs. Cuenca (G.R. No. L-26400 29
February 1972) the Supreme Court ruled that a suit for recovery of
possession and damages against an unincorporated agency (Public Works
Commission) can propsper even in the absence of a prior claim before the
Auditor General, declaring that where the government takes away property
from a private landowner for public use without going through the legal
process of expropriation or negotiated sale, the aggrieved party may properly
maintain a suit against the government without thereby violating the doctrine

17 | P a g e
of governmental immunity from suit without its consent. The doctrine of
governmental immunity from suit cannot serve as an instrument for
perpetrating an injustice on a citizen.

The State must appropriate money to satisfy judgment

against it
Although the Government, as plaintiff in expropriation proceedings,
submits itself to the jurisdiction of the Court and thereby waives its immunity
from suit, the judgment that is thus rendered requiring its payment of the
award determined as just compensation for the condemned property as a
condition precedent to the transfer to the title thereto in its favor, cannot be
realized upon execution. It is incumbent upon the legislature to appropriate
any additional amount, over and above the provisional deposit, that may be
necessary to pay the award determined in the judgment, since the
Government cannot keep the land and dishonor the judgment.
Judgments against the State or its agencies and instrumentalities in
cases where the State has consented to be sued, operate merely to liquidate
and establish the plaintiff's claim; such judgments may not be enforced by
writs of execution or garnishment and it is for the legislature to provide for
their payment through the corresponding appropriation, as indicated in Act
3083. (The Commissioner of Public Highways v. San Diego, G.R. No. L-30098,
February 18, 1970)
Even though the rule as to immunity of a state from suit is relaxed, the
power of the courts ends when the judgment is rendered. Although the
liability of the state has been judicially ascertained, the state is at liberty to
determine for itself whether to pay the judgment or not, and execution
cannot issue on a judgment against the state. Such statutes do not authorize
a seizure of state property to satisfy judgments recovered, and only convey
an implication that the legislature will recognize such judgment as final and
make provision for the satisfaction thereof. (City of Caloocan v. Allarde, G.R.
No. 107271, September 10, 2003)