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REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT), petitioner, vs. SANDIGANBAYAN, BIENVENIDO R. TANTOCO, JR. and


DOMINADOR R. SANTIAGO, respondents.
G.R. No. 90478 November 21, 1991
NARVASA, J.:

FACTS: Private respondents together with Ferdinand E. Marcos, Imelda R. Marcos, Tantoco, Sr., Gliceria R.
Tantoco, and Maria Lourdes Tantoco-Pineda-are defendants in a civil case in Sandiganbayan. The case was
commenced by the PCGG in behalf of the Republic. The complaint was one "for reconveyance, reversion,
accounting, restitution and damages.
Tantoco, Jr. and Santiago, instead of filing their answer, jointly filed a "MOTION TO STRIKE OUT SOME
PORTIONS OF THE COMPLAINT AND FOR BILL OF PARTICULARS OF OTHER PORTIONS. Tantoco and
Santiago then presented a "motion for leave to file interrogatories and "Interrogatories under Rule 25." They sought
an answer to the question: "Who were the Commissioners of the PCGG who approved or authorized the inclusion of
Messrs. Bienvenido R. Tantoco, Jr. and Dominador R. Santiago as defendants in the case?" The PCGG responded
by filing a motion to strike out said motion and interrogatories as being impertinent.
Afterwards, the Sandiganbayan denied the motion to strike out, for bill of particulars, and for leave to file
interrogatories. Also denied was the PCGG's motion to strike out impertinent. Tantoco and Santiago then filed an
Answer with Compulsory Counterclaim. The case was set for pre-trial. Tantoco and Santiago filed with the
Sandiganbayan a pleading denominated "Interrogatories to Plaintiff," an "Amended Interrogatories to Plaintiff"' as
well as a Motion for Production and Inspection of Documents.
The amended interrogatories chiefly sought factual details relative to specific averments of PCGG's
amended complaint,. ., what specific property or properties does the plaintiff claim it has the right to recover from
defendants Tantoco, Jr. and Santiago for being ill-gotten?. . what specific act or acts . . were committed by
defendants Tantoco, Jr. and Santiago in "concert with" defendant Ferdinand Marcos and in furtherance or pursuit,
of the alleged systematic plan of said defendant Marcos to accumulate ill-gotten wealth?" what specific act or acts
of the defendants Tantoco, Jr. and Santiago . . were committed by said defendants as part, or in furtherance, of the
alleged plan to conceal assets of defendants Ferdinand and Imelda Marcos?. . is it plaintiff's position or theory of
the case that Tourist Duty Free Shops, Inc., including all the assets of said corporation, are beneficially owned by
either or both defendants Ferdinand and Imelda Marcos and that the defendants Tantoco, Jr. and Santiago, as well
as, the other stockholders of record of the same corporation are mere "dummies" of said defendants Ferdinand
and /or Imelda R. Marcos?
On the other hand, the motion for production and inspection of documents prayed for examination and
copying of "official records and other evidence" on the basis of which the verification of the Amended Complaint
asserted that the allegations thereof are "true and correct;" the documents listed in PCGG's Pre-Trial Brief as those
"intended to be presented and . . marked as exhibits for the plaintiff;" and "the minutes of the meeting of the PCGG
which chronicles the discussion (if any) and the decision (of the Chairman and members) to file the complaint" in
the case at bar.

The Sandiganbayan admitted the Amended Interrogatories and granted the motion for production and
inspection of documents. The PCGG filed a Motion for Reconsideration arguing that the documents are "privileged
in character" since they are intended to be used against the PCGG and/or its Commissioners in violation of Section
4, Executive Order No. 1, viz.: (a) No civil action shall lie against the Commission or any member thereof for
anything done or omitted in the discharge of the task contemplated by this Order. (b) No member or staff of the
Commission shall be required to testify or produce evidence in any judicial, legislative, or administrative proceeding
concerning matters within its official cognizance.
It also filed an opposition to the Amended Interrogatories. After hearing, the Sandiganbayan promulgated
two (2) Resolutions the first, denying reconsideration (of the Resolution allowing production of documents), and the
second, reiterating by implication the permission to serve the amended interrogatories on the plaintiff (PCGG).
Hence, this petition for certiorari.

ISSUE: Whether a civil action can lie against the PCGG

HELD:
Yes. The various modes or instruments of discovery are meant to serve (1) as a device, along with the pretrial hearing under Rule 20, to narrow and clarify the basic issues between the parties, and (2) as a device for
ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable parties, consistent with
recognized privileges, to obtain the fullest possible knowledge of the issues and facts before trials and thus prevent
that said trials are carried on in the dark.
To this end, the field of inquiry that may be covered by depositions or interrogatories is as broad as when
the interrogated party is called as a witness to testify orally at trial. The inquiry extends to all facts which are
relevant, whether they be ultimate or evidentiary, excepting only those matters which are privileged. To ensure that
availment of the modes of discovery is otherwise untrammeled and efficacious, the law imposes serious sanctions on
the party who refuses to make discovery. Of course, there are limitations to discovery, even when permitted to be
undertaken without leave and without judicial intervention. "As indicated by (the) Rules . . ., limitations inevitably
arise when it can be shown that the examination is being conducted in bad faith or in such a manner as to annoy,
embarass, or oppress the person subject to the inquiry. And . . . further limitations come into existence when the
inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege."
In fine, the liberty of a party to make discovery is well nigh unrestricted if the matters inquired into are
otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of the law.
The petitioner's objections to the interrogatories served on it in accordance with Rule 25 of the Rules
of Court cannot be sustained.
It should initially be pointed out as regards the private respondents "Motion for Leave to File
Interrogatories" dated February 1, 1988 that it was correct for them to seek leave to serve interrogatories,
because discovery was being availed of before an answer had been served. In such a situation, i.e., "after jurisdiction
has been obtained over any defendant or over property subject of the action" but before answer, Section 1 of Rule 24
(treating of depositions), in relation to Section 1 of Rule 25 (dealing with interrogatories to parties) explicitly

requires "leave of court." But there was no need for the private respondents to seek such leave to serve their
"Amended Interrogatories to Plaintiff" after they had filed their answer to the PCGG's complaint, just as there was
no need for the Sandiganbayan to act thereon.
The PCGG insinuates that the private respondents are engaged on a "fishing expedition. It suffices to point
out that "fishing expeditions" are precisely permitted through the modes of discovery. Moreover, a defendant who
files a counterclaim against the plaintiff is allowed by the Rules to implead persons (therefore strangers to the
action) as additional defendants on said counterclaim. This may be done pursuant to Section 14, Rule 6 of the Rules.
The State is, of course, immune from suit in the sense that it cannot, as a rule, be sued without its
consent. But it is axiomatic that in filing an action, it divests itself of its sovereign character and sheds its
immunity from suit, descending to the level of an ordinary litigant. The PCGG cannot claim a superior or
preferred status to the State, even while assuming to represent or act for the State.
The suggestion that the State makes no implied waiver of immunity by filing suit except when in so doing
it acts in, or in matters concerning, its proprietary or non-governmental capacity, is unacceptable; it attempts a
distinction without support in principle or precedent. On the contrary
The consent of the State to be sued may be given expressly or impliedly. Express consent may
be manifested either through a general law or a special law. Implied consent is given when
the State itself commences litigation or when it enters into a contract.
The immunity of the State from suits does not deprive it of the right to sue private parties in its
own courts. The state as plaintiff may avail itself of the different forms of actions open to private
litigants. In short, by taking the initiative in an action against the private parties, the state
surrenders its privileged position and comes down to the level of the defendant. The latter
automatically acquires, within certain limits, the right to set up whatever claims and other defenses
he might have against the state. . . .
It can hardly be doubted that in exercising the right of eminent domain, the State exercises its jus
imperii, as distinguished from its proprietary rights or jus gestionis. Yet, even in that area, it has been held that where
private property has been taken in expropriation without just compensation being paid, the defense of immunity
from suit cannot be set up by the State against an action for payment by the owner.
The Court also finds itself unable to sustain the PCGG's other principal contention, of the nullity of the
Sandiganbayan's Order for the production and inspection of specified documents and things allegedly in its
possession. Obviously, there is nothing secret or confidential about these documents.

REPUBLIC OF THE PHILIPPINES, petitioner-appellee, vs. PABLO FELICIANO and INTERMEDIATE


APPELLATE COURT, respondents-appellants.
G.R. No. 70853 March 12, 1987

YAP, J.:

FACTS: On January 22, 1970, respondent Feliciano filed a complaint with the then CFI of Camarines Sur against
the Republic, represented by the Land Authority, for the recovery of ownership and possession of a parcel of land,
consisting of four (4) lots, situated in the Barrio of Salvacion, Municipality of Tinambac, Camarines Sur. Plaintiff
alleged that he bought the property in question from Gardiola by virtue of a Contract of Sale followed by a Deed of
Absolute Sale; that Gardiola had acquired the property by purchase from the heirs of Francisco Abrazado whose title
to the said property was evidenced by an informacion posesoria that upon plaintiff's purchase of the property, he
took actual possession of the same, introduced improvements therein and caused it to be surveyed which survey was
approved by the Director of Lands; that on November 1, 1954, President Magsaysay issued Proclamation No. 90
reserving for settlement purposes, under the administration of the National Resettlement and Rehabilitation
Administration (NARRA), a tract of land situated in the Municipalities of Tinambac and Siruma, Camarines Sur,
after which the NARRA and its successor agency, the Land Authority, started sub-dividing and distributing the land
to the settlers; that the property in question, while located within the reservation established under Proclamation No.
90, was the private property of plaintiff and should therefore be excluded therefrom. Plaintiff prayed that he be
declared the rightful and true owner of the property in question consisting of 1,364.4177 hectares; that his title of
ownership based on informacion posesoria of his predecessor-in-interest be declared legal valid and subsisting and
that defendant be ordered to cancel and nullify all awards to the settlers.
The defendant, represented by the Land Authority, filed an answer, raising by way of affirmative defenses
lack of sufficient cause of action and prescription. The trial court rendered a decision declaring Lot No. 1, with an
area of 701.9064 hectares, to be the private property of the plaintiff, "being covered by a possessory information title
in the name of his predecessor-in-interest" and declaring said lot excluded from the NARRA settlement reservation.
The court declared the rest of the property claimed by plaintiff, i.e. Lots 2, 3 and 4, reverted to the public domain.
A motion to intervene and to set aside the decision was filed by eighty-six (86) settlers, together with the
barrio council of Pag-asay, alleging among other things that intervenors had been in possession of the land in
question for more than twenty (20) years under claim of ownership. The court a quo reconsidered its decision. The
plaintiff presented additional evidence on July 30, 1971, and the case was set for hearing for the reception of
intervenors' evidence on August 30 and August 31, 1971. Judge Sison rendered a decision reiterating his decision of
August 29, 1970.
A motion for reconsideration was immediately filed by the intervenors. But before this motion was acted
upon, plaintiff filed a motion for execution. The lower court, this time through Judge Navarro, issued an order
denying the motion for execution. The case was reopened to allow intervenors to present their evidence. Unable to
secure a reconsideration of Judge Navarro's order, the plaintiff went to the IAC on a petition for certiorari. Said
petition was, however, denied by the Intermediate Appellate Court, and petitioners brought the matter to this Court
in G.R. No. 36163, which was denied. Consequently, the case was remanded to the court a quo. The intervenors
filed a motion to dismiss, principally on the ground that the Republic of the Philippines cannot be sued without its
consent and hence the action cannot prosper. The motion was opposed by the plaintiff.
The trial court, through Judge Esteban Lising, issued the questioned order dismissing the case for lack of
jurisdiction. Respondent moved for reconsideration, while the Solicitor General, on behalf of the Republic filed its
opposition, maintaining that the dismissal was proper on the ground of non-suability of the State and also on the
ground that the existence and/or authenticity of the purported possessory information title of the respondents'

predecessor-in-interest had not been demonstrated and that at any rate, the same is not evidence of title, or if it is, its
efficacy has been lost by prescription and laches.
Upon denial of the motion for reconsideration, plaintiff again went to the IAC on petition for certiorari.
Respondent appellate court rendered its decision reversing the order of Judge Lising and remanding the case to the
court a quo. Hence this petition.

ISSUE: whether the dismissal was proper on the ground of non-suability of the State

HELD: Yes. 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 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 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
filed by plaintiff, the private respondent herein, is directed against the Republic of the Philippines, represented by
the Land Authority, a governmental agency created by Republic Act No. 3844.
By its caption and its allegation and prayer, the complaint is clearly a suit against the State, which under
settled jurisprudence is not permitted, except upon a showing that the State has consented to be sued, either
expressly or by implication through the use of statutory language too plain to be misinterpreted. There is no such
showing in the instant case. Worse, the complaint itself fails to allege the existence of such consent. This is a fatal
defect, and on this basis alone, the complaint should have been dismissed.
The failure of the petitioner to assert the defense of immunity from suit when the case was tried before the
court a quo, as alleged by private respondent, is not fatal. It is now settled that such defense "may be invoked by the
courts sua sponte at any stage of the proceedings."
Private respondent contends that the consent of petitioner may be read from the Proclamation itself, when it
established the reservation " subject to private rights, if any there be. " We do not agree. No such consent can be
drawn from the language of the Proclamation. The exclusion of existing private rights from the reservation
established by Proclamation No. 90 can not be construed as a waiver of the immunity of the State from suit. Waiver
of immunity, being a derogation of sovereignty, will not be inferred lightly, but must be construed in strictissimi
juris. Moreover, the Proclamation is not a 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.
Neither is there merit in respondent's submission, which the respondent appellate court sustained, on the
basis of our decision in the Begosa case, that the present action is not a suit against the State within the rule of State
immunity from suit, because plaintiff does not seek to divest the Government of any of its lands or its funds. It is
contended that the complaint involves land not owned by the State, but private land belonging to the plaintiff, hence
the Government is not being divested of any of its properties.
The inscription in the property registry of an informacion posesoria under the Spanish Mortgage Law was a
means provided by the law then in force in the Philippines prior to the transfer of sovereignty from Spain to the
United States of America, to record a claimant's actual possession of a piece of land, established through an ex parte

proceeding conducted in accordance with prescribed rules. Such inscription merely furnishes, at best, prima
facie evidence of the fact that at the time the proceeding was held, the claimant was in possession of the land under a
claim of right as set forth in his application. The possessory information could ripen into a record of ownership after
the lapse of 20 years (later reduced to 10 years), upon the fulfillment of the requisites prescribed in Article 393 of
the Spanish Mortgage Law. There is no showing in the case at bar that the informacion posesoria held by the
respondent had been converted into a record of ownership. Such possessory information, therefore, remained at best
mere prima facie evidence of possession. Using this possessory information, the respondent could have applied for
judicial confirmation of imperfect title under the Public Land Act, which is an action in rem. However, having failed
to do so, it is rather late for him to pursue this avenue at this time. Respondent must also contend, as the records
disclose, with the fact admitted by him and stated in the decision of the Court a quo that settlers have been
occupying and cultivating the land in question since even before the outbreak of the war, which puts in grave doubt
his own claim of possession.
Worthy of note is the fact, as pointed out by the Solicitor General, that the informacion posesoria registered
in the Office of the Register of Deed of Camarines Sur on September 23, 1952 was a "reconstituted" possessory
information; it was "reconstituted from the duplicate presented to this office (Register of Deeds) by Dr. Pablo
Feliciano," without the submission of proof that the alleged duplicate was authentic or that the original thereof was
lost. Reconstitution can be validly made only in case of loss of the original. These circumstances raise grave doubts
as to the authenticity and validity of the "informacion posesoria" relied upon by respondent Feliciano. Adding to the
dubiousness of said document is the fact that "possessory information calls for an area of only 100
hectares," whereas the land claimed by respondent Feliciano comprises 1,364.4177 hectares, later reduced to 7019064 hectares. Courts should be wary in accepting "possessory information documents, as well as other purportedly
old Spanish titles, as proof of alleged ownership of lands.

UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT
GOHIER,petitioners, vs. HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal
and ELIGIO DE GUZMAN & CO., INC., respondents.
G.R. No. L-35645 May 22, 1985

ABAD SANTOS, J.:

FACTS: At times material to this case, the United States of America had a naval base in Subic, Zambales. The base
was one of those provided in the Military Bases Agreement between the Philippines and the United States.
Sometime in May, 1972, the United States invited the submission of bids for the following projects
1. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to shoreline revetment, NAVBASE Subic;
and repair to Leyte Wharf approach, NAVBASE Subic Bay, Philippines.
Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequent thereto, the
company received from the United States two telegrams requesting it to confirm its price proposals and for the name
of its bonding company. The company complied with the requests. [In its complaint, the company alleges that the
United States had accepted its bids because "A request to confirm a price proposal confirms the acceptance of a bid
pursuant to defendant United States' bidding practices."
In June, 1972, the company received a letter which was signed by Wilham I. Collins, Director, Contracts
Division, Naval Facilities Engineering Command, Southwest Pacific, Department of the Navy of the United States,
who is one of the petitioners herein. The letter said that the company did not qualify to receive an award for the
projects because of its previous unsatisfactory performance rating on a repair contract for the sea wall at the boat
landings of the U.S. Naval Station in Subic Bay. The letter further said that the projects had been awarded to third
parties. In the abovementioned Civil Case No. 779-M, the company sued the United States of America and Messrs.
Galloway, Collins and Gohier all members of the Engineering Command of the U.S. Navy. The complaint is to order
the defendants to allow the plaintiff to perform the work on the projects and, in the event that specific performance
was no longer possible, to order the defendants to pay damages. The company also asked for the issuance of a writ
of preliminary injunction to restrain the defendants from entering into contracts with third parties for work on the
projects.
The defendants entered their special appearance for the purpose only of questioning the jurisdiction of this
court over the subject matter of the complaint and the persons of defendants, the subject matter of the complaint
being acts and omissions of the individual defendants as agents of defendant United States of America, a foreign
sovereign which has not given her consent to this suit or any other suit for the causes of action asserted in the
complaint."
Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the
issuance of the writ of preliminary injunction. The trial court denied the motion and issued the writ. The defendants
moved twice to reconsider but to no avail. Hence the instant petition.

ISSUE: whether individual defendants as agents of defendant United States of America, a foreign sovereign can be
sued

HELD: No. The petition is highly impressed with merit.


The traditional rule of State immunity exempts a State from being sued in the courts of another State
without its consent or waiver. This rule is a necessary consequence of the principles of independence and equality of
States. However, the rules of International Law are not petrified; they are constantly developing and evolving. And
because the activities of states have multiplied, it has been necessary to distinguish them-between sovereign and
governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that State
immunity now extends only to acts jure imperil The restrictive application of State immunity is now the rule in the
United States, the United Kingdom and other states in western Europe. (The respondent judge recognized the
restrictive doctrine of State immunity when he said in his Order denying the defendants' (now petitioners) motion: "
A distinction should be made between a strictly governmental function of the sovereign state from its private,
proprietary or non- governmental acts. However, the respondent judge also said: "It is the Court's considered opinion
that entering into a contract for the repair of wharves or shoreline is certainly not a governmental function although
it may partake of a public nature or character.
The reliance placed on Lyons by the respondent judge is misplaced for the following reasons:
In Harry Lyons, Inc. vs. The United States of America, supra, plaintiff brought suit in the Court of First
Instance of Manila to collect several sums of money on account of a contract between plaintiff and defendant. The
defendant filed a motion to dismiss on the ground that the court had no jurisdiction over defendant and over the
subject matter of the action. The court granted the motion on the grounds that: (a) it had no jurisdiction over the
defendant who did not give its consent to the suit; and (b) plaintiff failed to exhaust the administrative remedies
provided in the contract. The order of dismissal was elevated to this Court for review.
In sustaining the action of the lower court, this Court said:
It appearing in the complaint that appellant has not complied with the procedure laid down in
Article XXI of the contract regarding the prosecution of its claim against the United States
Government, or, stated differently, it has failed to first exhaust its administrative remedies against
said Government, the lower court acted properly in dismissing this case.(At p. 598.)
It can thus be seen that the statement in respect of the waiver of State immunity from suit was purely
gratuitous and, therefore, obiter so that it has no value as an imperative authority.
The restrictive application of State immunity is proper only when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, 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 contract relates to the exercise of its
sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the defense of
both the United States and the Philippines, indisputably a function of the government of the highest order; they are
not utilized for nor dedicated to commercial or business purposes.
That the correct test for the application of State immunity is not the conclusion of a contract by a State but
the legal nature of the act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased three
apartment buildings to the United States of America for the use of its military officials. The plaintiffs sued to recover
possession of the premises on the ground that the term of the leases had expired. They also asked for increased
rentals until the apartments shall have been vacated.

In Syquia,the United States concluded contracts with private individuals but the contracts notwithstanding
the States was not deemed to have given or waived its consent to be sued for the reason that the contracts were
forjure imperii and not for jure gestionis.

THE HOLY SEE, petitioner, vs. THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the
Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC., respondents.
G.R. No. 101949 December 1, 1994
QUIASON, J.:

FACTS: Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is
represented in the Philippines by the Papal Nuncio. Private respondent, Starbright Sales Enterprises, Inc., is a
domestic corporation engaged in the real estate business.
This petition arose from a controversy over a parcel of land located in the Municipality of Paraaque,
Metro Manila and registered in the name of petitioner. Said Lot 5-A is contiguous to Lots 5-B and 5-D registered in
the name of the Philippine Realty Corporation (PRC). The three lots were sold to Ramon Licup, through Msgr.
Domingo A. Cirilos, Jr., acting as agent to the sellers. Later, Licup assigned his rights to the sale to private
respondent.
In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose as to who
of the parties has the responsibility of evicting and clearing the land of squatters. Complicating the relations of the
parties was the sale by petitioner of Lot 5-A to Tropicana Properties and Development Corporation (Tropicana).
On January 23, 1990, private respondent filed a complaint with the RTC, Branch 61, Makati, Metro Manila
for annulment of the sale of the three parcels of land, and specific performance and damages against petitioner,
represented by the Papal Nuncio, and three other defendants: namely, Msgr. Domingo A. Cirilos, Jr., the PRC and
Tropicana. The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner and the PRC,
agreed to sell to Ramon Licup Lots 5-A, 5-B and 5-D at the price of P1,240.00 per square meters; (2) the agreement
to sell was made on the condition that earnest money of P100,000.00 be paid by Licup to the sellers, and that the
sellers clear the said lots of squatters who were then occupying the same; (3) Licup paid the earnest money to Msgr.
Cirilos; (4) in the same month, Licup assigned his rights over the property to private respondent and informed the
sellers of the said assignment; (5) thereafter, private respondent demanded from Msgr. Cirilos that the sellers fulfill
their undertaking and clear the property of squatters; however, Msgr. Cirilos informed private respondent of the
squatters' refusal to vacate the lots, proposing instead either that private respondent undertake the eviction or that the
earnest money be returned to the latter; (6) private respondent counterproposed that if it would undertake the
eviction of the squatters, the purchase price of the lots should be reduced from P1,240.00 to P1,150.00 per square
meter; (7) Msgr. Cirilos returned the earnest money of P100,000.00 and wrote private respondent giving it seven
days from receipt of the letter to pay the original purchase price in cash; (8) private respondent sent the earnest

money back to the sellers, but later discovered that on March 30, 1989, petitioner and the PRC, without notice to
private respondent, sold the lots to Tropicana, as evidenced by two separate Deeds of Sale, one over Lot 5-A, and
another over Lots 5-B and 5-D; and that the sellers' transfer certificate of title over the lots were cancelled,
transferred and registered in the name of Tropicana; (9) Tropicana induced petitioner and the PRC to sell the lots to
it and thus enriched itself at the expense of private respondent; (10) private respondent demanded the rescission of
the sale to Tropicana and the reconveyance of the lots, to no avail; and (11) private respondent is willing and able to
comply with the terms of the contract to sell and has actually made plans to develop the lots into a townhouse
project, but in view of the sellers' breach, it lost profits of not less than P30,000.000.00.
Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner and the PRC
on the one hand, and Tropicana on the other; (2) the reconveyance of the lots in question; (3) specific performance
of the agreement to sell between it and the owners of the lots; and (4) damages.
Petitioner and Msgr. Cirilos separately moved to dismiss the complaint petitioner for lack of jurisdiction
based on sovereign immunity from suit, and Msgr. Cirilos for being an improper party. The trial court issued an
order denying, among others, petitioner's motion to dismiss after finding that petitioner "shed off [its] sovereign
immunity by entering into the business contract in question". Petitioner forthwith elevated the matter to us. In its
petition, petitioner invokes the privilege of sovereign immunity only on its own behalf and on behalf of its official
representative, the Papal Nuncio.
On December 9, 1991, a Motion for Intervention was filed before us by the Department of Foreign Affairs,
claiming that it has a legal interest in the outcome of the case as regards the diplomatic immunity of petitioner, and
that it "adopts by reference, the allegations contained in the petition of the Holy See insofar as they refer to
arguments relative to its claim of sovereign immunity from suit".

ISSUE: whether respondent trial court has no jurisdiction over petitioner, being a foreign state enjoying sovereign
immunity

HELD: Yes.
I.

Personality or legal interest of the DFA to intervene in the case in behalf of the Holy See.

In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic
immunity in a foreign court, it requests the Foreign Office of the state where it is sued to convey to the court that
said defendant is entitled to immunity. In the United States, the procedure followed is the process of "suggestion,"
where the foreign state or the international organization sued in an American court requests the Secretary of State to
make a determination as to whether it is entitled to immunity. If the Secretary of State finds that the defendant is
immune from suit, he, in turn, asks the Attorney General to submit to the court a "suggestion" that the defendant is
entitled to immunity. In England, a similar procedure is followed, only the Foreign Office issues a certification to
that effect instead of submitting a "suggestion.
In the Philippines, the practice is for the foreign government or the international organization to first secure an
executive endorsement of its claim of sovereign or diplomatic immunity. But how the Philippine Foreign Office
conveys its endorsement to the courts varies. In International Catholic Migration Commission v. Calleja, the

Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and Employment, informing the latter
that the respondent-employer could not be sued because it enjoyed diplomatic immunity. In World Health
Organization v. Aquino, the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v. Tizon,
the U.S. Embassy asked the Secretary of Foreign Affairs to request the Solicitor General to make, in behalf of the
Commander of the United States Naval Base at Olongapo City, Zambales, a "suggestion" to respondent Judge. The
Solicitor General embodied the "suggestion" in a Manifestation and Memorandum as amicus curiae.
In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved with
this Court to be allowed to intervene on the side of petitioner. The Court allowed the said Department to file its
memorandum in support of petitioner's claim of sovereign immunity.

II.

A. The Holy See

Before we determine the issue of petitioner's non-suability, a brief look into its status as a sovereign state is
in order. Before the annexation of the Papal States by Italy in 1870, the Pope was the monarch and he, as the Holy
See, was considered a subject of International Law. With the loss of the Papal States and the limitation of the
territory under the Holy See to an area of 108.7 acres, the position of the Holy See in International Law became
controversial.
In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy recognized the exclusive
dominion and sovereign jurisdiction of the Holy See over the Vatican City. It also recognized the right of the Holy
See to receive foreign diplomats, to send its own diplomats to foreign countries, and to enter into treaties according
to International Law.
The Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to the Holy
See absolute and visible independence and of guaranteeing to it indisputable sovereignty also in the field of
international relations" In view of the wordings of the Lateran Treaty, it is difficult to determine whether the
statehood is vested in the Holy See or in the Vatican City. Some writers even suggested that the treaty created two
international persons the Holy See and Vatican City.
The Vatican City fits into none of the established categories of states, and the attribution to it of
"sovereignty" must be made in a sense different from that in which it is applied to other states. In a community of
national states, the Vatican City represents an entity organized not for political but for ecclesiastical purposes and
international objects. Despite its size and object, the Vatican City has an independent government of its own, with
the Pope, who is also head of the Roman Catholic Church, as the Holy See or Head of State, in conformity with its
traditions, and the demands of its mission in the world. Indeed, the world-wide interests and activities of the Vatican
City are such as to make it in a sense an "international state".
One authority wrote that the recognition of the Vatican City as a state has significant implication that it
is possible for any entity pursuing objects essentially different from those pursued by states to be invested with
international personality. Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the

Holy See and not in the name of the Vatican City, one can conclude that in the Pope's own view, it is the Holy See
that is the international person.
The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The Holy See,
through its Ambassador, the Papal Nuncio, has had diplomatic representations with the Philippine government since
1957 This appears to be the universal practice in international relations.

B. Sovereign Immunity
As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally accepted
principles of International Law. Even without this affirmation, such principles of International Law are deemed
incorporated as part of the law of the land as a condition and consequence of our admission in the society of nations.
There are two conflicting concepts of sovereign immunity, each widely held and firmly established.
According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the
courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is
recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private acts or
acts jure gestionis.
Some states passed legislation to serve as guidelines for the executive or judicial determination when an act
may be considered as jure gestionis. The United States passed the Foreign Sovereign Immunities Act of 1976, which
defines a commercial activity as "either a regular course of commercial conduct or a particular commercial
transaction or act." Furthermore, the law declared that the "commercial character of the activity shall be determined
by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its
purpose." The Canadian Parliament enacted in 1982 an Act to Provide For State Immunity in Canadian Courts. The
Act defines a "commercial activity" as any particular transaction, act or conduct or any regular course of conduct
that by reason of its nature, is of a "commercial character."
The restrictive theory, which is intended to be a solution to the host of problems involving the issue of
sovereign immunity, has created problems of its own. Legal treatises and the decisions in countries which follow the
restrictive theory have difficulty in characterizing whether a contract of a sovereign state with a private party is an
act jure gestionis or an act jure imperii.
The restrictive theory came about because of the entry of sovereign states into purely commercial activities
remotely connected with the discharge of governmental functions. This is particularly true with respect to the
Communist states which took control of nationalized business activities and international trading.
This Court has considered the following transactions by a foreign state with private parties as acts jure
imperii: (1) the lease by a foreign government of apartment buildings for use of its military officers (2) the conduct
of public bidding for the repair of a wharf at a United States Naval Station and (3) the change of employment status
of base employees.
On the other hand, this Court has considered the following transactions by a foreign state with private
parties as acts jure gestionis: (1) the hiring of a cook in the recreation center, consisting of three restaurants, a
cafeteria, a bakery, a store, and a coffee and pastry shop at the John Hay Air Station in Baguio City, to cater to
American servicemen and the general public; and (2) the bidding for the operation of barber shops in Clark Air Base

in Angeles City. The operation of the restaurants and other facilities open to the general public is undoubtedly for
profit as a commercial and not a governmental activity. By entering into the employment contract with the cook in
the discharge of its proprietary function, the United States government impliedly divested itself of its sovereign
immunity from suit.
In the absence of legislation defining what activities and transactions shall be considered "commercial" and
as constituting acts jure gestionis, we have to come out with our own guidelines, tentative they may be.
Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate
test. Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in
the activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the
particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an
incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit.
As held in United States of America v. Guinto, (supra):
There is no question that the United States of America, like any other state, will be deemed to have
impliedly waived its non-suability if it has entered into a contract in its proprietary or private
capacity. It is only when the contract involves its sovereign or governmental capacity that no such
waiver may be implied.
In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate
business, surely the said transaction can be categorized as an act jure gestionis. However, petitioner has
denied that the acquisition and subsequent disposal of Lot 5-A were made for profit but claimed that it
acquired said property for the site of its mission or the Apostolic Nunciature in the Philippines. Private
respondent failed to dispute said claim.
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was made
not for commercial purpose, but for the use of petitioner to construct thereon the official place of residence of the
Papal Nuncio. The right of a foreign sovereign to acquire property, real or personal, in a receiving state, necessary
for the creation and maintenance of its diplomatic mission, is recognized in the 1961 Vienna Convention on
Diplomatic Relations (Arts. 20-22). This treaty was concurred in by the Philippine Senate and entered into force in
the Philippines on November 15, 1965.
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and administrative
jurisdiction of the receiving state over any real action relating to private immovable property situated in the territory
of the receiving state which the envoy holds on behalf of the sending state for the purposes of the mission. If this
immunity is provided for a diplomatic envoy, with all the more reason should immunity be recognized as regards the
sovereign itself, which in this case is the Holy See.
The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a
governmental character. Petitioner did not sell Lot 5-A for profit or gain. It merely wanted to dispose off the same
because the squatters living thereon made it almost impossible for petitioner to use it for the purpose of the donation.
The fact that squatters have occupied and are still occupying the lot, and that they stubbornly refuse to leave the
premises, has been admitted by private respondent in its complaint.
The privilege of sovereign immunity in this case was sufficiently established by the Memorandum and
Certification of the Department of Foreign Affairs. As the department tasked with the conduct of the Philippines'

foreign relations, the Department of Foreign Affairs has formally intervened in this case and officially certified that
the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the Philippines exempt from
local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this
country. The determination of the executive arm of government that a state or instrumentality is entitled to sovereign
or diplomatic immunity is a political question that is conclusive upon the courts. Where the plea of immunity is
recognized and affirmed by the executive branch, it is the duty of the courts to accept this claim so as not to
embarrass the executive arm of the government in conducting the country's foreign relations .
Private respondent is not left without any legal remedy for the redress of its grievances. Under both Public
International Law and Transnational Law, a person who feels aggrieved by the acts of a foreign sovereign can ask
his own government to espouse his cause through diplomatic channels. Private respondent can ask the Philippine
government, through the Foreign Office, to espouse its claims against the Holy See. Its first task is to persuade the
Philippine government to take up with the Holy See the validity of its claims. Of course, the Foreign Office shall
first make a determination of the impact of its espousal on the relations between the Philippine government and the
Holy See. Once the Philippine government decides to espouse the claim, the latter ceases to be a private cause.

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.
G.R. No. L-30671 November 28, 1973
FERNANDO, J.:

FACTS: On July 3, 1961, a decision was rendered in Special Proceedings No. 2156-R in favor of respondents P. J.
Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation, and against the petitioner herein,
confirming the arbitration award in the amount of P1,712,396.40. On June 24, 1969, respondent Villasor, issued an
Order declaring the aforestated decision final and executory, directing the Sheriffs of Rizal Province, Quezon City
[as well as] Manila to execute the said decision. Pursuant to the said Order, the corresponding Alias Writ of
Execution [was issued] dated June 26, 1969. On the strength of the a Alias Writ of Execution the Provincial Sheriff
of Rizal (respondent herein) served notices of garnishment with several Banks, specially on the "monies due the
Armed Forces of the Philippines in the form of deposits sufficient to cover the amount mentioned in the said Writ of
Execution"; the Philippine Veterans Bank received the same notice of garnishment. The funds of the AFP on deposit
with the Banks, particularly, with the Philippine Veterans Bank and the Philippine National Bank [or] their branches
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 Armed Forces of the Philippines. The
complaint alleged that respondent Judge Villasor, acted in excess of jurisdiction [or] with grave abuse of discretion
amounting to lack of jurisdiction in granting the issuance of an alias writ of execution against the properties of the
Armed Forces of the Philippines, hence, the Alias Writ of Execution and notices of garnishment issued pursuant
thereto are null and void."

ISSUE: whether respondent Judge acted in conformity with the dictates of the Constitution in granting the issuance
of an alias writ of execution against the properties of the AFP

HED: No. 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. It is readily understandable why it
must be so. In the classic formulation of Holmes: "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." Sociological jurisprudence supplies an answer not
dissimilar. So it was indicated in a recent decision, Providence Washington Insurance Co. v. Republic of the
Philippines, with its affirmation that "a continued adherence to the doctrine of non-suability is not to be deplored for
as against the inconvenience that may be caused private parties, the loss of governmental efficiency and the obstacle
to the performance of its multifarious functions are far greater if such a fundamental principle were abandoned and
the availability of judicial remedy were not thus restricted. With the well known propensity on the part of our people
to go to court, at the least provocation, the loss of time and energy required to defend against law suits, in the
absence of such a basic principle that constitutes such an effective obstacle, could very well be imagined."
This fundamental postulate underlying the 1935 Constitution is now made explicit in the revised charter. It
is therein expressly provided: "The State may not be sued without its consent." A corollary, both dictated by
logic and sound sense from a basic concept is that 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. Thus in
the recent case of Commissioner of Public Highways v. San Diego, "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 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." Such a principle applies even to an attempted
garnishment of a salary that had accrued in favor of an employee. Thus: "A rule which has never been seriously
questioned, is that money in the hands of public officers, although it may be due government employees, is not
liable to the creditors of these employees in the process of garnishment. One reason is, that the State, by virtue of its
sovereignty, may not be sued in its own courts except by express authorization by the Legislature, and to subject its
officers to garnishment would be to permit indirectly what is prohibited directly. Another reason is that moneys
sought to be garnished, as long as they remain in the hands of the disbursing officer of the Government, belong to
the latter, although the defendant in garnishment may be entitled to a specific portion thereof. And still another
reason which covers both of the foregoing is that every consideration of public policy forbids it."

DEPARTMENT OF AGRICULTURE vs.THE NATIONAL LABOR RELATIONS COMMISSION, et al.


G.R. No. 104269 November 11, 1993
VITUG, J.:

FACTS: The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into a contract on
01 April 1989 for security services to be provided by the latter to the said governmental entity. Save for the increase
in the monthly rate of the guards, the same terms and conditions were also made to apply to another contract, dated
01 May 1990, between the same parties. Pursuant to their arrangements, guards were deployed by Sultan Agency in
the various premises of the petitioner.
On 13 September 1990, several guards of the Sultan Security Agency filed a complaint for underpayment
of wages, non-payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay and
overtime pay, as well as for damages before the Regional Arbitration Branch X of Cagayan de Oro City against the
Department of Agriculture and Sultan Security Agency.
The Labor Arbiter found herein petitioner and jointly and severally liable with Sultan Security Agency for
the payment of money claims of the complainant security guards. The petitioner and Sultan Security Agency did not
appeal the decision of the Labor Arbiter. Thus, the decision became final and executory.
The Labor Arbiter issued a writ of execution. commanding the City Sheriff to enforce and execute the
judgment against the property of the two respondents. Forthwith, the City Sheriff levied on execution the motor
vehicles of the petitioner, i.e. one (1) unit Toyota Hi-Ace, one (1) unit Toyota Mini Cruiser, and one (1) unit Toyota
Crown. These units were put under the custody of Zacharias Roa, the property custodian of the petitioner, pending
their sale at public auction or the final settlement of the case, whichever would come first.
A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of injunction was
filed by the petitioner with the NLRC Cagayan de Oro which denied the same. In this petition for certiorari, the
petitioner charges the NLRC with grave abuse of discretion for refusing to quash the writ of execution. The
petitioner faults the NLRC for assuming jurisdiction over a money claim against the Department, which, it claims,
falls under the exclusive jurisdiction of the Commission on Audit. More importantly, the petitioner asserts, the
NLRC has disregarded the cardinal rule on the non-suability of the State.

ISSUE: whether petitioner has impliedly waived its immunity from suit by concluding a service contract with
Sultan Security Agency

HELD: No. The basic postulate enshrined in the constitution that "the State may not be sued without its
consent," reflects nothing less than a recognition of the sovereign character of the State and an express affirmation of
the unwritten rule effectively insulating it from the jurisdiction of courts. It is based on the very essence of
sovereignty. As has been aptly observed, by Justice Holmes, 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. True, the doctrine, not too infrequently, is
derisively 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. We have had occasion, to explain in its defense,
however, that a continued adherence to the doctrine of non-suability cannot be deplored, for 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
and the availability of judicial remedy is not to be accordingly restricted.
The rule, in any case, is not really absolute for it does not say that the state may not be sued under any
circumstances. On the contrary, as correctly phrased, the doctrine only conveys, "the state may not be sued without
its consent;" its clear import then is that the State may at times be sued. The States' consent may be given
expressly or impliedly. 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 claims involving liability arising from contract,
express or implied, which could serve as a basis of civil action between private parties." Implied consent, on the
other hand, is conceded when the State itself commences litigation, thus opening itself to a counterclaim 16 or when it
enters into a contract. In this situation, the government is deemed to have descended to the level of the other
contracting party and to have divested itself of its sovereign immunity. This rule, relied upon by the NLRC and the
private respondents, is not, however, without qualification. Not all contracts entered into by the government
operate as a waiver of its non-suability; distinction must still be made between one which is executed in the
exercise of its sovereign function and another which is done in its proprietary capacity.
In the Unites States of America vs. Ruiz, where the questioned transaction dealt with improvements on the
wharves in the naval installation at Subic Bay, we held:
The traditional rule of immunity exempts a State from being sued in the courts of another State
without its consent or waiver. This rule is a necessary consequence of the principles of
independence and equality of States. However, the rules of International Law are not petrified;
they are constantly developing and evolving. And because the activities of states have multiplied,
it has been necessary to distinguish them between sovereign and governmental acts ( jure
imperii) and private, commercial and proprietary act ( jure gestionisis). The result is that State
immunity now extends only to acts jure imperii. The restrictive application of State immunity is
now the rule in the United States, the United Kingdom and other states in Western Europe.
The restrictive application of State immunity is proper only when the proceedings arise
out of commercial transactions of the foreign sovereign, its commercial activities or economic
affairs. Stated differently, a state may be said to have descended to the level of an individual and
can this be deemed to have actually 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. In
this case the projects are an integral part of the naval base which is devoted to the defense of both
the United States and the Philippines, indisputably a function of the government of the highest
order; they are not utilized for not dedicated to commercial or business purposes.
In the instant case, the Department of Agriculture has not pretended to have assumed a capacity
apart from its being a governmental entity when it entered into the questioned contract; nor that it could
have, in fact, performed any act proprietary in character.
But, be that as it may, the claims of private respondents, i.e. for underpayment of wages, holiday pay,
overtime pay and similar other items, arising from the Contract for Service, 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. 1145, the money claim first be brought to the Commission on Audit. Thus,
inCarabao, Inc., vs. Agricultural Productivity Commission, we ruled:

(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 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."
We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327 and the
Labor Code with respect to money claims against the State. The Labor code, in relation to Act No. 3083,
provides the legal basis for the State liability but the prosecution, enforcement or satisfaction thereof must
still be pursued in accordance with the rules and procedures laid down in C.A. No. 327, as amended by P.D.
1445.
When the state gives its consent to be sued, it does thereby necessarily consent to unrestrained execution
against it. tersely put, 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. 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 the 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 or 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. 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.

Petition is GRANTED.

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.
G.R. No. L-33112 June 15, 1978
FERNANDO, Acting C.J.:

FACTS: The reliance of petitioner Philippine National Bank in this certiorari and prohibition proceeding against
respondent Judge Javier Pabalan who issued a writ of execution, followed thereafter by a notice of garnishment of
the funds of respondent Philippine Virginia Tobacco Administration, deposited with it, is on the fundamental
constitutional law doctrine of non-suability of a state, it being alleged that such funds are public in character. This is
not the first time petitioner raised that issue. It did so before in Philippine National Bank v. Court of industrial
Relations, decided only last January. It did not meet with success, this Court ruling in accordance with the two
previous cases of National Shipyard and Steel Corporation and Manila Hotel Employees Association v. Manila
Hotel Company, that funds of public corporations which can sue and be sued were not exempt from garnishment. As
respondent Philippine Virginia Tobacco Administration is likewise a public corporation possessed of the same
attributes, a similar outcome is indicated. As noted at the outset, petitioner Philippine National Bank would invoke
the doctrine of non-suability. The alleged grave abuse of discretion, the basis of this certiorari proceeding, was
sought to be justified on the failure of respondent Judge to set aside the notice of garnishment of funds belonging to
respondent Philippine Virginia Tobacco Administration.

ISSUE: whether funds of public corporations which can sue and be sued are exempt from garnishment

HELD: No. It is to be admitted that under the present Constitution, what was formerly implicit as a fundamental
doctrine in constitutional law has been set forth in express terms: "The State may not be sued without its
consent." If the funds appertained to one of the regular departments or offices in the government, then, certainly,
such a provision would be a bar to garnishment. Such is not the case here. Garnishment would lie. Only last January,
as noted in the opening paragraph of this decision, this Court, in a case brought by the same petitioner precisely
invoking such a doctrine, left no doubt that the funds of public corporations could properly be made the object of a
notice of garnishment. Accordingly, this petition must fail.
The premise that the funds could be spoken as public character may be accepted in the sense that the People
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 the 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... , pursuant to which The NASSCO has been established all the powers of
a corporation under the Corporation Law ... ." Accordingly, it may be sue and be sued and may be subjected to court
processes just like any other corporation (Section 13, Act No. 1459, as amended.)" ... To repeat, the ruling was the
appropriate remedy for the prevailing party which could proceed against the funds of a corporate entity even if
owned or controlled by the government."
In the language of its ponente Justice Ozaeta "On the other hand, it is well-settled that when the
government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other
corporation. By engaging in a particular business thru the instrumentality of a corporation, the government divests
itself pro hac vice of its sovereign character, so as to render the corporation subject to the rules of law governing
private corporations." It is worth mentioning that Justice Ozaeta could find support for such a pronouncement from
the leading American Supreme Court case of united States v. Planters' Bank, with the opinion coming from the
illustrious Chief Justice Marshall. It was handed down more than one hundred fifty years ago, 1824 to be exact. It is

apparent, therefore, that petitioner Bank could it legally set forth as a bar or impediment to a notice of garnishment
the doctrine of non-suability.

GAUDENCIO RAYO, et. al. vs. COURT OF FIRST INSTANCE OF BULACAN, BRANCH V, STA. MARIA,
and NATIONAL POWER CORPORATION, respondents.
G.R. No. L-55273-83 December 19, 1981
ABAD SANTOS, J.:

FACTS: At about midnight on October 26, 1978, during the height of that infamous typhoon "KADING" the
respondent corporation, acting through its plant superintendent, Benjamin Chavez, opened or caused to be opened
simultaneously all the three floodgates of the Angat Dam. And as a direct and immediate result of the sudden,
precipitate and simultaneous opening of said floodgates several towns in Bulacan were inundated. Hardest-hit was
Norzagaray. About a hundred of its residents died or were reported to have died and properties worth million of
pesos destroyed or washed away. This flood was unprecedented in Norzagaray. Petitioners, who were among the
many unfortunate victims of that man-caused flood, filed with the respondent Court eleven complaints for damages
against the respondent corporation and the plant superintendent of Angat Dam, Benjamin Chavez. These complaints
though separately filed have a common/similar cause of action. ...Respondent corporation invoked in each answer a
special and affirmative defense that "in the operation of the Angat Dam," it is "performing a purely governmental
function", hence it "cannot be sued without the express consent of the State." ...Petitioners opposed the prayer for
dismissal and contended that respondent corporation is performing not governmental but merely proprietary
functions and that under its own organic act, Section 3 (d) of Republic Act No. 6395, it can sue and be sued in any
court. Petitioners received the questioned order of the respondent Court dismissing all their complaints as against the
respondent corporation thereby leaving the superintendent of the Angat Dam, Benjamin Chavez, as the sole partydefendant. The respondent Court denied petitioners' motion for reconsideration. Hence, the present petition for
review on certiorari under Republic Act No. 5440.

ISSUES: 1. Whether respondent National Power Corporation performs a governmental function with respect to the
management and operation of the Angat Dam; and
2. Whether the power of respondent National Power Corporation to sue and be sued under its organic
charter includes the power to be sued for tort.

HELD:

The petition is highly impressed with merit.

It is not necessary to write an extended dissertation on whether or not the NPC performs a governmental
function with respect to the management and operation of the Angat Dam. It is sufficient to say that the government

has organized a private corporation, put money in it and has allowed it to sue and be sued in any court under its
charter. (R.A. No. 6395, Sec. 3 (d).) As a government owned and controlled corporation, it has a personality of its
own, distinct and separate from that of the Government. (See National Shipyards and Steel Corp. vs. CIR, et al., L17874, August 31, 1963, 8 SCRA 781.)
Moreover, the charter provision that the NPC can "sue and be sued in any court" is without qualification on
the cause of action and accordingly it can include a tort claim such as the one instituted by the petitioners.

BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO LEDESMA, petitioners, vs. THE
BUREAU OF PRINTING EMPLOYEES ASSOCIATION (NLU), PACIFICO ADVINCULA, ROBERTO
MENDOZA, PONCIANO ARGANDA and TEODULO TOLERAN, respondents.
G.R. No. L-15751

January 28, 1961

GUTIERREZ DAVID, J.:

FACTS: The action in question was upon complaint of the respondents Bureau of Printing Employees
Association (NLU) Pacifico Advincula, Roberto Mendoza, Ponciano Arganda and Teodulo Toleran filed by an
acting prosecutor of the Industrial Court against herein petitioner Bureau of Printing, Serafin Salvador, the Acting
Secretary of the Department of General Services, and Mariano Ledesma the Director of the Bureau of Printing. The
complaint alleged that Serafin Salvador and Mariano Ledesma have been engaging in unfair labor practices by
interfering with, or coercing the employees of the Bureau of Printing particularly the members of the complaining
association petition, in the exercise of their right to self-organization an discriminating in regard to hire and tenure of
their employment in order to discourage them from pursuing the union activities.
Answering the complaint, the petitioners Bureau of Printing, Serafin Salvador and Mariano Ledesma
alleged that respondents Pacifico Advincula, Roberto Mendoza Ponciano Arganda and Teodulo Toleran were
suspended pending result of an administrative investigation against them for breach of Civil Service rules and

regulations petitions; that the Bureau of Printing has no juridical personality to sue and be sued; that said Bureau of
Printing is not an industrial concern engaged for the purpose of gain but is an agency of the Republic performing
government functions

ISSUE: whether the Bureau of Printing can be sued

HED: No. The Bureau of Printing is an office of the Government created by the Administrative Code of 1916 (Act
No. 2657). As such instrumentality of the Government, it operates under the direct supervision of the Executive
Secretary, Office of the President, and is "charged with the execution of all printing and binding, including work
incidental to those processes, required by the National Government and such other work of the same character as
said Bureau may, by law or by order of the (Secretary of Finance) Executive Secretary, be authorized to undertake . .
.." (See. 1644, Rev. Adm. Code). It has no corporate existence, and its appropriations are provided for in the General
Appropriations Act. Designed to meet the printing needs of the Government, it is primarily a service bureau and
obviously, not engaged in business or occupation for pecuniary profit.
It is true, as stated in the order complained of, that the Bureau of Printing receives outside jobs and that
many of its employees are paid for overtime work on regular working days and on holidays, but these facts do not
justify the conclusion that its functions are "exclusively proprietary in nature." Overtime work in the Bureau of
Printing is done only when the interest of the service so requires. As a matter of administrative policy, the overtime
compensation may be paid, but such payment is discretionary with the head of the Bureau depending upon its
current appropriations, so that it cannot be the basis for holding that the functions of said Bureau are wholly
proprietary in character. Anent the additional work it executes for private persons, we find that such work is done
upon request, as distinguished from those solicited, and only "as the requirements of Government work will permit"
(sec. 1654, Rev. Adm. Code), and "upon terms fixed by the Director of Printing, with the approval of the
Department Head". As shown by the uncontradicted evidence of the petitioners, most of these works consist of
orders for greeting cards during Christmas from government officials, and for printing of checks of private banking
institutions. On those greeting cards, the Government seal, of which only the Bureau of Printing is authorized to use,
is embossed, and on the bank cheeks, only the Bureau of Printing can print the reproduction of the official
documentary stamps appearing thereon. The volume of private jobs done, in comparison with government jobs, is
only one-half of 1 per cent, and in computing the costs for work done for private parties, the Bureau does not include
profit because it is not allowed to make any. Clearly, while the Bureau of Printing is allowed to undertake private
printing jobs, it cannot be pretended that it is thereby an industrial or business concern. The additional work it
executes for private parties is merely incidental to its function, and although such work may be deemed proprietary
in character, there is no showing that the employees performing said proprietary function are separate and distinct
from those employed in its general governmental functions.
From what has been stated, it is obvious that the Court of Industrial Relations did not acquire jurisdiction
over the respondent Bureau of Printing, and is thus devoid of any authority to take cognizance of the case. This
Court has already held in a long line of decisions that the Industrial Court has no jurisdiction to hear and determine
the complaint for unfair labor practice filed against institutions or corporations not organized for profit and,
consequently, not an industrial or business organization. This is so because the Industrial Peace Act was intended to
apply only to industrial employment, and to govern the relations between employers engaged in industry and
occupations for purposes of gain, and their industrial employees.

Indeed, as an office of the Government, without any corporate or juridical personality, the Bureau of
Printing cannot be sued. (Sec. 1, Rule 3, Rules of Court). Any suit, action or proceeding against it, if it were to
produce any effect, would actually be a suit, action or proceeding against the Government itself, and the rule
is settled that the Government cannot be sued without its consent, much less over its objection.
The record also discloses that the instant case arose from the filing of administrative charges against some
officers of the respondent Bureau of Printing Employees' Association by the Acting Secretary of General Services.
Said administrative charges are for insubordination, grave misconduct and acts prejudicial to public service
committed by inciting the employees, of the Bureau of Printing to walk out of their jobs against the order of the duly
constituted officials. Under the law, the Heads of Departments and Bureaus are authorized to institute and
investigate administrative charges against erring subordinates. For the Industrial Court now to take cognizance of
the case filed before it, which is in effect a review of the acts of executive officials having to do with the discipline
of government employees under them, would be to interfere with the discharge of such functions by said officials.

MOBIL PHILIPPINES EXPLORATION, INC., plaintiff-appellant, vs. CUSTOMS ARRASTRE SERVICE


and BUREAU of CUSTOMS, defendants-appellees.
G.R. No. L-23139

December 17, 1966

BENGZON, J.P., J.:

FACTS: Four cases of rotary drill parts were shipped from abroad on S.S. "Leoville" sometime in November of
1962, consigned to Mobil Philippines Exploration, Inc., Manila. The shipment arrived at the Port of Manila on April
10, 1963, and was discharged to the custody of the Customs Arrastre Service, the unit of the Bureau of Customs then
handling arrastre operations therein. The Customs Arrastre Service later delivered to the broker of the consignee
three cases only of the shipment.
On April 4, 1964 Mobil Philippines Exploration, Inc., filed suit in the CFI of Manila against the Customs
Arrastre Service and the Bureau of Customs to recover the value of the undelivered case plus other damages. The
defendants filed a motion to dismiss the complaint on the ground that not being persons under the law, defendants
cannot be sued.
After plaintiff opposed the motion, the court, on April 25, 1964, dismissed the complaint on the ground that neither
the Customs Arrastre Service nor the Bureau of Customs is suable.

ISSUE: whether the 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 private individuals.

HELD: The Rules of Court, in Section 1, Rule 3, provide:


SECTION 1. Who may be parties.Only natural or juridical persons or entities authorized by law may be
parties in a civil action.
Accordingly, a defendant in a civil suit must be (1) a natural person; (2) a juridical person or (3) an entity
authorized by law to be sued. Neither the Bureau of Customs nor (a fortiori) its function unit, the Customs Arrastre
Service, is a person. They are merely parts of the machinery of Government. The Bureau of Customs is a bureau
under the Department of Finance (Sec. 81, Revised Administrative Code); and as stated, the Customs Arrastre
Service is a unit of the Bureau of Custom, set up under Customs Administrative Order No. 8-62 of November 9,
1962. It follows that the defendants herein cannot he sued under the first two abovementioned categories of natural
or juridical persons.
Nonetheless it is urged that by authorizing the Bureau of Customs to engage in arrastre service, the law
thereby impliedly authorizes it to be sued as arrastre operator, for the reason that the nature of this function (arrastre
service) is proprietary, not governmental. Thus, insofar as arrastre operation is concerned, appellant would put
defendants under the third category of "entities authorized by law" to be sued. Stated differently, it is argued that
while there is no law expressly authorizing the Bureau of Customs to sue or be sued, still its capacity to be sued is
implied from its very power to render arrastre service at the Port of Manila, which it is alleged, amounts to the
transaction of a private business.
The statutory provision on arrastre service is found in Section 1213 of Republic Act 1937 (Tariff and
Customs Code, effective June 1, 1957), and it states:
SEC. 1213. Receiving, Handling, Custody and Delivery of Articles.The Bureau of Customs shall have
exclusive supervision and control over the receiving, handling, custody and delivery of articles on the
wharves and piers at all ports of entry and in the exercise of its functions it is hereby authorized to acquire,
take over, operate and superintend such plants and facilities as may be necessary for the receiving,
handling, custody and delivery of articles, and the convenience and comfort of passengers and the handling
of baggage; as well as to acquire fire protection equipment for use in the piers: Provided, That whenever in
his judgment the receiving, handling, custody and delivery of articles can be carried on by private parties
with greater efficiency, the Commissioner may, after public bidding and subject to the approval of the
department head, contract with any private party for the service of receiving, handling, custody and
delivery of articles, and in such event, the contract may include the sale or lease of government-owned
equipment and facilities used in such service.

In Associated Workers Union, et al. vs. Bureau of Customs, et al., this Court indeed held "that the foregoing
statutory provisions authorizing the grant by contract to any private party of the right to render said arrastre services
necessarily imply that the same is deemed by Congress to be proprietary or non-governmental function." The issue
in said case, however, was whether laborers engaged in arrastre service fall under the concept of employees in the
Government employed in governmental functions for purposes of the prohibition in Section 11, Republic Act 875 to
the effect that "employees in the Government . . . shall not strike," but "may belong to any labor organization which
does not impose the obligation to strike or to join in strike," which prohibition "shall apply only to employees
employed in governmental functions of the Government . . . .

Thus, the ruling therein was that the Court of Industrial Relations had jurisdiction over the subject matter of
the case, but not that the Bureau of Customs can be sued. Said issue of suability was not resolved, the resolution
stating only that "the issue on the personality or lack of personality of the Bureau of Customs to be sued does not
affect the jurisdiction of the lower court over the subject matter of the case, aside from the fact that amendment may
be made in the pleadings by the inclusion as respondents of the public officers deemed responsible, for the unfair
labor practice acts charged by petitioning Unions".
Now, 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. This is the doctrine recognized in Bureau of Printing, et al. vs. Bureau of Printing Employees
Association, et al., L-15751, January 28, 1961).
The situation here is not materially different. The Bureau of Customs, to repeat, is part of the Department
of Finance (Sec. 81, Rev. Adm. Code), with no 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. For practical reasons said revenues and customs duties can not be assessed and
collected by simply receiving the importer's or ship agent's or consignee's declaration of merchandise being
imported and imposing the duty provided in the Tariff law. Customs authorities and officers must see to it that the
declaration tallies with the merchandise actually landed. And this checking up requires that the landed merchandise
be hauled from the ship's side to a suitable place in the customs premises to enable said customs officers to make it,
that is, it requires arrastre operations.
Clearly, therefore, although said arrastre function may be deemed proprietary, it is a necessary
incident of the primary and governmental function of the Bureau of Customs, so that engaging in the same
does not necessarily render said Bureau liable to suit. For otherwise, it could not perform its governmental
function without necessarily exposing itself to suit. Sovereign immunity, granted as to the end, should not be
denied as to the necessary means to that end.
And herein lies the distinction between the present case and that of National Airports Corporation vs.
Teodoro, 91 Phil. 203, on which appellant would rely. For there, the Civil Aeronautics Administration was found
have for its prime reason for existence not a governmental but a proprietary function, so that to it the latter was not a
mere incidental function.
Regardless of the merits of the claim against it, the State, for obvious reasons of public policy, cannot be
sued without its consent. 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.
It must be remembered that statutory provisions waiving State immunity from suit are strictly construed
and that waiver of immunity, being in derogation of sovereignty, will not be lightly inferred. From the provision
authorizing the Bureau of Customs to lease arrastre operations to private parties, We see no authority to sue
the said Bureau in the instances where it undertakes to conduct said operation itself. The Bureau of Customs,
acting as part of the machinery of the national government in the operation of the arrastre service, pursuant
to express legislative mandate and as a necessary incident of its prime governmental function, is immune
from suit, there being no statute to the contrary.

CIVIL AERONAUTICS ADMINISTRATION, petitioner, vs.COURT OF APPEALS and ERNEST E.


SIMKE, respondents.
G.R. No. L-51806 November 8, 1988
CORTES, J.:

FACTS: Private respondent is a naturalized Filipino citizen and at the time of the incident was the Honorary Consul
Geileral of Israel in the Philippines. In the afternoon of December 13, 1968, private respondent with several other
persons went to the Manila International Airport to meet his future son-in-law. In order to get a better view of the
incoming passengers, he and his group proceeded to the viewing deck or terrace of the airport. While walking on the
terrace, then filled with other people, private respondent slipped over an elevation about four (4) inches high at the
far end of the terrace. As a result, private respondent fell on his back and broke his thigh bone. The next day, private
respondent was operated on for about three hours. Private respondent then filed an action for damages based on
quasi-delict with the Court of First Instance of Rizal, Branch VII against petitioner Civil Aeronautics Administration
or CAA as the entity empowered "to administer, operate, manage, control, maintain and develop the Manila
International Airport ... ." [Sec. 32 (24), R.A. 776].
Said claim for damages included, aside from the medical and hospital bills, consequential damages for the
expenses of two lawyers who had to go abroad in private respondent's stead to finalize certain business transactions
and for the publication of notices announcing the postponement of private respondent's daughter's wedding which
had to be cancelled because of his accident.
Judgment was rendered in private respondent's favor prompting petitioner to appeal to the Court of
Appeals. The latter affirmed the trial court's decision. Petitioner then filed with the same court a Motion for,
Reconsideration but this was denied.

ISSUE: whether petitioner can be made a party-defendant in this case.

HED: Yes. This Court has already held otherwise in the case of National Airports Corporation v. Teodoro, Sr.
Petitioner contends that the said ruling does not apply in this case because: First, in the Teodoro case, the CAA was
sued only in a substituted capacity, the National Airports Corporation being the original party. Second, in the
Teodoro case, the cause of action was contractual in nature while here, the cause of action is based on a quasi-delict.
Third, there is no specific provision in Republic Act No. 776, the law governing the CAA, which would justify the
conclusion that petitioner was organized for business and not for governmental purposes.
Such arguments are untenable.

First, the Teodoro case, far from stressing the point that the CAA was only substituted for the National
Airports Corporation, in fact treated the CAA as the real party in interest when it stated that:
... To all legal intents and practical purposes, the National Airports Corporation is dead and the
Civil Aeronautics Administration is its heir or legal representative, acting by the law of its creation
upon its own rights and in its own name. The better practice there should have been to make the
Civil Aeronautics Administration the third party defendant instead of the National Airports
Corporation.
Second, the Teodoro case did not make any qualification or limitation as to whether or not the CAA's power
to sue and be sued applies only to contractual obligations. The Court in the Teodoro case ruled that Sections 3 and 4
of Executive Order 365 confer upon the CAA, without any qualification, the power to sue and be sued, albeit only
by implication. Accordingly, this Court's pronouncement that where such power to sue and be sued has been granted
without any qualification, it can include a claim based on tort or quasi-delict [Rayo v. Court of First Instance of
Bulacan, finds relevance and applicability to the present case.
Third, it has already been settled in the Teodoro case that the CAA as an agency is not immune from
suit, it being engaged in functions pertaining to a private entity.
The Civil Aeronautics Administration comes under the category of a private entity. Although not a
body corporate it was created, like the National Airports Corporation, not to maintain a necessary
function of government, but to run what is essentially a business, even if revenues be not its prime
objective but rather the promotion of travel and the convenience of the travelling public. It is
engaged in an enterprise which, far from being the exclusive prerogative of state, may, more than
the construction of public roads, be undertaken by private concerns.
True, the law prevailing in 1952 when the Teodoro case was promulgated was Exec. Order 365
(Reorganizing the Civil Aeronautics Administration and Abolishing the National Airports Corporation). Republic
Act No. 776 (Civil Aeronautics Act of the Philippines), subsequently enacted on June 20, 1952, did not alter the
character of the CAA's objectives under Exec, Order 365. The pertinent provisions cited in the Teodoro case,
particularly Secs. 3 and 4 of Exec. Order 365, which led the Court to consider the CAA in the category of a private
entity were retained substantially in Republic Act 776, Sec. 32 (24) and (25).<re||anIt can be seen that the CAA is
tasked with private or non-governmental functions which operate to remove it from the purview of the rule on State
immunity from suit. For the correct rule as set forth in the Tedoro case states:
Not all government entities, whether corporate or non-corporate, are immune from
suits. Immunity functions suits is determined by the character of the objects for which the entity
was organized. The rule is thus stated in Corpus Juris:
Suits against State agencies with relation to matters in which they have assumed to act in
private or non-governmental capacity, and various suits against certain corporations created by the
state for public purposes, but to engage in matters partaking more of the nature of ordinary
business rather than functions of a governmental or political character, are not regarded as suits
against the state. The latter is true, although the state may own stock or property of such a
corporation for by engaging in business operations through a corporation, the state divests itself so
far of its sovereign character, and by implication consents to suits against the corporation.

Petitioner tries to escape liability on the ground that there was no basis for a finding of negligence. There
can be no negligence on its part, it alleged, because the elevation in question "had a legitimate purpose for being on
the terrace and was never intended to trip down people and injure them. It was there for no other purpose but to
drain water on the floor area of the terrace"
To determine whether or not the construction of the elevation was done in a negligent manner, the trial
court conducted an ocular inspection of the premises.
... This Court after its ocular inspection found the elevation shown in Exhs. A or 6-A where
plaintiff slipped to be a step, a dangerous sliding step, and the proximate cause of plaintiffs
injury...This Court during its ocular inspection also observed the dangerous and defective
condition of the open terrace which has remained unrepaired through the years.
These factual findings are binding and conclusive upon this Court.
The Court finds the contention that private respondent was, at the very least, guilty of contributory
negligence, thus reducing the damages that plaintiff may recover, unmeritorious. Contributory negligence under
Article 2179 of the Civil Code contemplates a negligent act or omission on the part of the plaintiff, which although
not the proximate cause of his injury, contributed to his own damage, the proximate cause of the plaintiffs own
injury being the defendant's lack of due care. In the instant case, no contributory negligence can be imputed to the
private respondent.
The private respondent, who was the plaintiff in the case before the lower court, could not have reasonably
foreseen the harm that would befall him, considering the attendant factual circumstances. Even if the private
respondent had been looking where he was going, the step in question could not easily be noticed because of its
construction.
Finally, petitioner appeals to this Court the award of damages to private respondent. The liability of CAA to
answer for damages, whether actual, moral or exemplary, cannot be seriously doubted in view of one conferment of
the power to sue and be sued upon it, which, as held in the case of Rayo v. Court of First Instance, supra, includes
liability on a claim for quasi-delict.
Gross negligence which, according to the Court, is equivalent to the term "notorious negligence" and
consists in the failure to exercise even slight care can be attributed to the CAA for its failure to remedy the
dangerous condition of the questioned elevation or to even post a warning sign directing the attention of the viewers
to the change in the elevation of the floorings notwithstanding its knowledge of the hazard posed by such elevation
However, since the Manila International Airport Authority (MIAA) has taken over the management and
operations of the Manila International Airport [renamed Ninoy Aquino International Airport under Republic Act No.
6639, the MIAA has assumed all the debts, liabilities and obligations of the now defunct Civil Aeronautics
Administration (CAA), the liabilities of the CAA have now been transferred to the MIAA.

MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner vs. HON. JUDGE ROMEO N. FIRME,
JUANA RIMANDO-BANIA, IAUREANO BANIA, JR., SOR MARIETA BANIA, MONTANO
BANIA, ORJA BANIA, AND LYDIA R. BANIA, respondents.
G.R. No. L-52179 April 8, 1991
MEDIALDEA, J.:

FACTS: Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and in
accordance with the laws of the Republic of the Philippines. Respondent Honorable Judge Romeo N. Firme is
impleaded in his official capacity as the presiding judge of the CFI of La Union, Branch IV, Bauang, La Union.
While private respondents are heirs of the deceased Laureano Bania Sr. and plaintiffs in Civil Case No. 107-Bg
before the aforesaid court.
At about 7 o'clock in the morning of December 16, 1965, a collision occurred involving a passenger
jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a gravel and sand truck driven
by Jose Manandeg and owned by Tanquilino Velasquez and a dump truck of the Municipality of San Fernando, La
Union and driven by Alfredo Bislig. Due to the impact, several passengers of the jeepney including Laureano
Bania Sr. died as a result of the injuries they sustained and four (4) others suffered varying degrees of physical
injuries.
On December 11, 1966, the private respondents instituted a compliant for damages against the Estate of
Macario Nieveras and Bernardo Balagot, owner and driver, respectively, of the passenger jeepney in the Court of
First Instance of La Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a Third Party
Complaint against the petitioner and the driver of a dump truck of petitioner.
Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent judge. By
virtue of a court order, the private respondents amended the complaint wherein the petitioner and its regular
employee, Alfredo Bislig were impleaded for the first time as defendants. Petitioner filed its answer and raised
affirmative defenses such as lack of cause of action, non-suability of the State, prescription of cause of action and
the negligence of the owner and driver of the passenger jeepney as the proximate cause of the collision.
The trial court rendered a decision in favor of the plaintiffs.
Petitioner maintains that the respondent judge committed grave abuse of discretion amounting to excess of
jurisdiction in issuing the aforesaid orders and in rendering a decision. Furthermore, petitioner asserts that while
appeal of the decision maybe available, the same is not the speedy and adequate remedy in the ordinary course of
law.

ISSUE: whether the municipality can be held liable for the torts committed by its regular employee, who was then
engaged in the discharge of governmental functions

HELD: No. In the case at bar, the respondent judge deferred the resolution of the defense of non-suability of the
State amounting to lack of jurisdiction until trial. However, said respondent judge failed to resolve such defense,
proceeded with the trial and thereafter rendered a decision against the municipality and its driver.
The respondent judge did not commit grave abuse of discretion when in the exercise of its judgment it
arbitrarily failed to resolve the vital issue of non-suability of the State in the guise of the municipality. However, said
judge acted in excess of his jurisdiction when in his decision dated October 10, 1979 he held the municipality liable
for the quasi-delict committed by its regular employee.
The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the
Constitution, to wit: "the State may not be sued without its consent." Stated in simple parlance, the general rule is
that the State may not be sued except when it gives consent to be sued. Consent takes the form of express or implied
consent. Express consent may be embodied in a general law or a special law. The standing consent of the State to be
sued in case of money claims involving liability arising from contracts is found in Act No. 3083. A special law may
be passed to enable a person to sue the government for an alleged quasi-delict.
Consent is implied when the government enters into business contracts, thereby descending to the level of
the other contracting party, and also when the State files a complaint, thus opening itself to a counterclaim.
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 provided that they can sue and be sued.
(Cruz, Philippine Political Law, 1987 Edition, p. 39)
A distinction should first be made between suability and liability. "Suability depends on the consent of
the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable
does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent to
be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does
waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is
liable."
Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the test
of liability of the municipality depends on whether or not the driver, acting in behalf of the municipality, is
performing governmental or proprietary functions. The distinction of powers becomes important for purposes of
determining the liability of the municipality for the acts of its agents which result in an injury to third persons.
Municipal corporations exist in a dual capacity, and their functions are twofold. In one they exercise the
right springing from sovereignty, and while in the performance of the duties pertaining thereto, their acts are
political and governmental. Their officers and agents in such capacity, though elected or appointed by them, are
nevertheless public functionaries performing a public service, and as such they are officers, agents, and servants of
the state. In the other capacity the municipalities exercise a private, proprietary or corporate right, arising from their
existence as legal persons and not as public agencies. Their officers and agents in the performance of such functions
act in behalf of the municipalities in their corporate or individual capacity, and not for the state or sovereign power."
It has already been remarked that municipal corporations are suable because their charters grant
them the competence to 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 State merely gives the
claimant the right to show that the defendant was not acting in its 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 the case at bar, the driver of the dump truck of the municipality insists that "he was on his way to
the Naguilian river to get a load of sand and gravel for the repair of San Fernando's municipal streets." In
the absence of any evidence to the contrary, the regularity of the performance of official duty is presumed
pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule that the driver of the
dump truck was performing duties or tasks pertaining to his office.
We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District Engineer, and the
Provincial Treasurer that "the construction or maintenance of roads in which the truck and the driver worked at the
time of the accident are admittedly governmental activities."
After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the
municipality cannot be held liable for the torts committed by its regular employee, who was then engaged in the
discharge of governmental functions. Hence, the death of the passenger tragic and deplorable though it may
be imposed on the municipality no duty to pay monetary compensation.
All premises considered, the Court is convinced that the respondent judge's dereliction in failing to resolve
the issue of non-suability did not amount to grave abuse of discretion. But said judge exceeded his jurisdiction when
it ruled on the issue of liability.

MUNICIPALITY OF SAN MIGUEL, BULACAN, petitioner, vs. HONORABLE OSCAR C. FERNANDEZ,


in his capacity as the Presiding Judge, Branch IV, Baliuag, Bulacan, The PROVINCIAL SHERIFF of
Bulacan, MARGARITA D. VDA. DE IMPERIO, ADORACION IMPERIO, RODOLFO IMPERIO,
CONRADO IMPERIO, ERNESTO IMPERIO, ALFREDO IMPERIO, CARLOS IMPERIO, JR., JUAN
IMPERIO and SPOUSES MARCELO PINEDA and LUCILA PONGCO, respondents.
G.R. No. L-61744 June 25, 1984
RELOVA, J.:

FACTS: In a civil case entitled "Margarita D. Vda. de Imperio, et al. vs. Municipal Government of San Miguel,
Bulacan, et al.", the CFI of Bulacan rendered judgment holding herein petitioner municipality liable to private
respondents, ordering the partial revocation of the Deed of Donation signed by the deceased Carlos Imperio in favor
of the Municipality of San Miguel Bulacan. The foregoing judgment became final when herein petitioner's appeal
was dismissed due to its failure to file the record on appeal on time. The dismissal was affirmed by the then Court of
Appeals. Thereafter, herein private respondents moved for issuance of a writ of execution for the satisfaction of the
judgment. Petitioner filed a Motion to Quash the writ of execution on the ground that the municipality's property or

funds are all public funds exempt from execution. The said motion to quash was, however, denied by the respondent
and the alias writ of execution stands in full force and effect.
On September 13, 1982, respondent judge issued an order which in part, states: It is clear and evident from
the foregoing that defendant has more than enough funds to meet its judgment obligation. Municipal Treasurer
Roura of San Miguel, Bulacan and Provincial Treasurer of Bulacan, Talavera are ordered to comply with the money
judgment rendered by Judge Agustin C. Bagasao against said municipality. In like manner, the municipal authorities
of San Miguel, Bulacan are likewise ordered to desist from plaintiffs' legal possession of the property already
returned to plaintiffs by virtue of the alias writ of execution.
When the treasurers failed to comply with the respondent judge issued an order for their arrest and that they
will be release only upon compliance thereof. Hence, the present petition.

ISSUE: whether 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 the civil case.

HELD: Yes. Well settled is the rule that public funds are not subject to levy and execution. The reason for this was
explained in the case of Municipality of Paoay vs. Manaois, "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, 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."
Thus, it is clear that all the funds of petitioner municipality in the possession of the Municipal Treasurer of San
Miguel, as well as those in the possession of the Provincial Treasurer of Bulacan, are also public funds and as such
they are exempt from execution.
Besides, Presidential Decree No. 477, known as "The Decree on Local Fiscal Administration", Section 2
(a), provides: SEC. 2. Fundamental Principles.
(a) No money shall be paid out of the treasury except in pursuance of a lawful appropriation or
other specific statutory authority.
Otherwise stated, 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. In the case at bar, it has not been
shown that the Sangguniang Bayan has passed an ordinance to this effect.

MUNICIPALITY OF MAKATI, petitioner, vs. THE HONORABLE COURT OF APPEALS, HON.


SALVADOR P. DE GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL FINANCE
CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA, respondents.
G.R. Nos. 89898-99 October 1, 1990
CORTS, J.:

FACTS: The present petition for review is an off-shoot of expropriation proceedings initiated by petitioner
Municipality of Makati against private respondent Admiral Finance Creditors Consortium, Inc., Home Building
System & Realty Corporation and one Arceli P. Jo, involving a parcel of land and improvements thereon located at
Mayapis St., San Antonio Village, Makati and registered in the name of Arceli P. Jo. It appears that the action for
eminent domain was filed on May 20, 1986. Attached to petitioner's complaint was a certification that a bank
account had been opened with the PNB Buendia Branch under petitioner's name containing the sum of P417,510.00,
made pursuant to the provisions of P.D. No. 42. After due hearing where the parties presented their respective
appraisal reports regarding the value of the property, respondent RTC judge rendered a decision fixing the appraised
value of the property at P5,291,666.00, and ordering petitioner to pay this amount minus the advanced payment of
P338,160.00 which was earlier released to private respondent.
After this decision became final and executory, private respondent moved for the issuance of a writ of
execution. After issuance of the writ of execution, a Notice of Garnishment was served by respondent sheriff Silvino
R. Pastrana upon the manager of the PNB Buendia Branch. However, respondent sheriff was informed that a "hold
code" was placed on the account of petitioner. As a result of this, private respondent filed a praying that an order be
issued directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance due under the
RTC decision.
Petitioner filed a motion to lift the garnishment, on the ground that the manner of payment of the
expropriation amount should be done in installments which the respondent RTC judge failed to state in his decision.
Pending resolution of the above motions, petitioner filed a "Manifestation" informing the court that private
respondent was no longer the true and lawful owner of the subject property because a new title over the property had
been registered in the name of Philippine Savings Bank, Inc. (PSB) Respondent RTC judge issued an order requiring
PSB to make available the documents pertaining to its transactions over the subject property, and the PNB Buendia
Branch to reveal the amount in petitioner's account which was garnished by respondent sheriff. In compliance with
this order, PSB filed a manifestation informing the court that it had consolidated its ownership over the property as
mortgagee/purchaser at an extrajudicial foreclosure sale held on April 20, 1987. After several conferences, PSB and
private respondent entered into a compromise agreement whereby they agreed to divide between themselves the
compensation due from the expropriation proceedings.
Respondent trial judge subsequently issued an order which: (1) approved the compromise agreement; (2)
ordered PNB Buendia Branch to immediately release to PSB the sum of P4,953,506.45 which corresponds to the
balance of the appraised value of the subject property under the RTC decision dated June 4, 1987, from the
garnished account of petitioner; and, (3) ordered PSB and private respondent to execute the necessary deed of
conveyance over the subject property in favor of petitioner. Petitioner's motion to lift the garnishment was denied.

Petitioner filed a motion for reconsideration, which was duly opposed by private respondent. On the other hand, for
failure of the manager of the PNB Buendia Branch to comply with the order dated September 8, 1988, private
respondent filed two succeeding motions to require the bank manager to show cause why he should not be held in
contempt of court. During the hearings conducted for the above motions, the general manager of the PNB Buendia
Branch, a Mr. Antonio Bautista, informed the court that he was still waiting for proper authorization from the PNB
head office enabling him to make a disbursement for the amount so ordered.
For its part, petitioner contended that its funds at the PNB Buendia Branch could neither be garnished nor
levied upon execution, for to do so would result in the disbursement of public funds without the proper appropriation
required under the law.
Respondent trial judge issued an order denying petitioner's motion for reconsideration on the ground that
the doctrine enunciated in Republic v. Palacio did not apply to the case because petitioner's PNB Account No. S/A
265-537154-3 was an account specifically opened for the expropriation proceedings of the subject property pursuant
to Pres. Decree No. 42. Respondent RTC judge likewise declared Mr. Antonio Bautista guilty of contempt of court
for his inexcusable refusal to obey the order dated September 8, 1988, and thus ordered his arrest and detention until
his compliance with the said order.
Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions for certiorari with
the Court of Appeals, which were eventually consolidated. The Court of Appeals dismissed both petitions for lack of
merit, sustained the jurisdiction of respondent RTC judge over the funds contained in petitioner's PNB Account No.
265-537154-3, and affirmed his authority to levy on such funds.
Its motion for reconsideration having been denied by the Court of Appeals, petitioner now files the present
petition for review with prayer for preliminary injunction.
The Court resolved to issue a temporary restraining order enjoining respondent RTC judge, respondent
sheriff, and their representatives, from enforcing and/or carrying out the RTC order dated December 21, 1988 and
the writ of garnishment issued pursuant thereto. Private respondent then filed its comment to the petition, while
petitioner filed its reply.
Petitioner not only reiterates the arguments adduced in its petition before the Court of Appeals, but also
alleges for the first time that it has actually two accounts with the PNB Buendia Branch, to wit:
(1) Account No. S/A 265-537154-3 exclusively for the expropriation of the subject property,
with an outstanding balance of P99,743.94.
(2) Account No. S/A 263-530850-7 for statutory obligations and other purposes of the
municipal government, with a balance of P170,098,421.72, as of July 12, 1989.
Because the petitioner has belatedly alleged only in this Court the existence of two bank accounts, it may
fairly be asked whether the second account was opened only for the purpose of undermining the legal basis of the
assailed orders of respondent RTC judge and the decision of the Court of Appeals, and strengthening its reliance on
the doctrine that public funds are exempted from garnishment or execution as enunciated in Republic v.
Palacio[supra.] At any rate, the Court will give petitioner the benefit of the doubt, and proceed to resolve the
principal issues presented based on the factual circumstances thus alleged by petitioner.

Admitting that its PNB Account No. S/A 265-537154-3 was specifically opened for expropriation
proceedings it had initiated over the subject property, petitioner poses no objection to the garnishment or the levy
under execution of the funds deposited therein amounting to P99,743.94. However, it is petitioner's main contention
that inasmuch as the assailed orders of respondent RTC judge involved the net amount of P4,965,506.45, the funds
garnished by respondent sheriff in excess of P99,743.94, which are public funds earmarked for the municipal
government's other statutory obligations, are exempted from execution without the proper appropriation required
under the law.

ISSUE: whether the funds deposited in the second PNB Account No. S/A 263-530850-7 are public funds exempt
from execution

HED: There is merit in this contention. The funds deposited in the second PNB Account No. S/A 263-530850-7
are public funds of the municipal government. In this jurisdiction, well-settled is the rule that public funds
are not subject to levy and execution, unless otherwise provided for by statute [Republic v. Palacio, supra.; The
Commissioner of Public Highways v. San Diego, G.R. No. L-30098, February 18, 1970, 31 SCRA 616]. More
particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be
attached and sold at execution sale to satisfy a money judgment against the municipality. Municipal revenues
derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of
financing the governmental activities and functions of the municipality, are exempt from execution. The foregoing
rule finds application in the case at bar. Absent a showing that the municipal council of Makati has passed an
ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision
dated June 4, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under
execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7.
Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a
municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered
against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the
necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor.
In the case at bar, the validity of the RTC decision dated June 4, 1987 is not disputed by petitioner. No
appeal was taken therefrom. For three years now, petitioner has enjoyed possession and use of the subject property
notwithstanding its inexcusable failure to comply with its legal obligation to pay just compensation. Petitioner has
benefited from its possession of the property since the same has been the site of Makati West High School since the
school year 1986-1987. This Court will not condone petitioner's blatant refusal to settle its legal obligation arising
from expropriation proceedings it had in fact initiated. It cannot be over-emphasized that, within the context of the
State's inherent power of eminent domain,
The State's power of eminent domain should be exercised within the bounds of fair play and justice. In the
case at bar, considering that valuable property has been taken, the compensation to be paid fixed and the
municipality is in full possession and utilizing the property for public purpose, for three (3) years, the Court finds
that the municipality has had more than reasonable time to pay full compensation.

CITY OF CALOOCAN and NORMA M. ABRACIA, petitioners, vs. HON. MAURO T. ALLARDE, Presiding
Judge of Branch 123, RTC of Caloocan City, ALBERTO A. CASTILLO, Deputy Sheriff of Branch 123, RTC
of Caloocan City, and DELFINA HERNANDEZ SANTIAGO and PHILIPPINE NATIONAL BANK
(PNB), respondents.
G.R. No. 107271

September 10, 2003

CORONA, J.:

FACTS: Sometime in 1972, Marcial Samson, City Mayor of Caloocan City, through Ordinance No. 1749,
abolished the position of Assistant City Administrator and 17 other positions from the plantilla of the local
government of Caloocan. Then Assistant City Administrator Delfina Hernandez Santiago and the 17 affected
employees of the City Government assailed the legality of the abolition before the then Court of First Instance (CFI)
of Caloocan City, Branch 33.
In 1986, the City Government of Caloocan paid respondent Santiago P75,083.37 in partial payment of her
backwages, thereby leaving a balance of P530,761.91. Her co-parties were paid in full. 3 In 1987, the City of
Caloocan appropriated funds for her unpaid back salaries. This was included in Supplemental Budget No. 3 for the
fiscal year 1987. Surprisingly, however, the City later refused to release the money to respondent Santiago.
Respondent Santiago exerted effort for the execution of the remainder of the money judgment but she met stiff
opposition from the City Government of Caloocan.
For the second time, the City Government of Caloocan went up to the Court of Appeals and filed a petition
for certiorari, prohibition and injunction to stop the trial court from enforcing the writ of execution. The CA
dismissed the petition and affirmed the order of issuance of the writ of execution. And for the second time, the City
Government of Caloocan appealed to this Court in G.R. No. 98366, City Government of Caloocan vs. Court of
Appeals, et al. The petition was dismissed.
On July 27, 1992, Sheriff Alberto A. Castillo levied and sold at public auction one of the motor vehicles of
the City Government of Caloocan, with plate no. SBH-165, for P100,000. The proceeds of the sale were turned over
to respondent Santiago in partial satisfaction of her claim, thereby leaving a balance of P439,377.14, inclusive of
interest. Petitioners filed a motion questioning the validity of the auction sale of the vehicle with plate no. SBH-165,
and a supplemental motion maintaining that the properties of the municipality were exempt from execution. All the
vehicles, including that previously sold in the auction sale, were owned by the City and assigned for the use of
herein petitioner Norma Abracia, Division Superintendent of Caloocan City, and other officials of the Division of
City Schools.
On October 5, 1992, the City Council of Caloocan passed Ordinance No. 0134, Series of 1992, which
included the amount of P439,377.14 claimed by respondent Santiago as back salaries, plus interest.
In an order dated May 7, 1993, Judge Allarde ordered Sheriff Alberto A. Castillo to immediately garnish
the funds of the City Government of Caloocan corresponding to the claim of respondent Santiago. On the same day,

Sheriff Alberto A. Castillo served a copy of the Notice of Garnishment on the Philippine National Bank (PNB),
Sangandaan Branch, Caloocan City. When PNB immediately notified the City of Caloocan of the Notice of
Garnishment, the City Treasurer sent a letter-advice informing PNB that the order of garnishment was "illegal," with
a warning that it would hold PNB liable for any damages which may be caused by the withholding of the funds of
the city. PNB opted to comply with the order of Judge Allarde. After 21 long years, the claim of private respondent
Santiago was finally settled in full.

ISSUES: whether the garnishment of the funds of the City of Caloocan and the levy and sale of the motor vehicles
belonging to the City of Caloocan are valid

whether the funds of the City of Caloocan deposited with the PNB may be garnished

HELD:
The petition has absolutely no merit. The trial court committed no grave abuse of discretion in
implementing the alias writ of execution to settle the claim of respondent Santiago, the satisfaction of which
petitioner had been maliciously evading for 21 years.
Petitioner argues that the garnishment of its funds in PNB was invalid inasmuch as these were public funds
and thus exempt from execution. Garnishment is considered a specie of attachment by means of which the plaintiff
seeks to subject to his claim property of the defendant in the hands of a third person, or money owed by such third
person or garnishee to the defendant.
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:
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.
The rule is based on obvious considerations of public policy. 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.
However, the rule is not absolute and admits of a well-defined 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.

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.
Petitioners reliance on Municipality of Makati vs. Court of Appeals, et al.,15 and Commissioner of Public
Highways vs. San Diego, does not help their cause. Both cases implicitly affirmed that public funds may be
garnished if there is a statute which appropriated the amount so garnished. Thus, in Municipality of Makati,
citing San Diego, we unequivocally held that:
In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless
otherwise provided by statute.

ZACARIAS VILLAVICENCIO, ET AL., petitioners, vs. JUSTO LUKBAN, ET AL., respondents.


G.R. No. L-14639

March 25, 1919

MALCOLM, J.:

FACTS: The Mayor of the city of Manila, Justo Lukban, for the best of all reasons, to exterminate vice, ordered the
segregated district for women of ill repute, which had been permitted for a number of years in the city of Manila,
closed. Between October 16 and October 25, 1918, the women were kept confined to their houses in the district by
the police. Presumably, during this period, the city authorities quietly perfected arrangements with the Bureau of
Labor for sending the women to Davao, Mindanao, as laborers; with some government office for the use of the
coastguard cutters Corregidor and Negros, and with the Constabulary for a guard of soldiers. At any rate, about
midnight of October 25, the police, acting pursuant to orders from the chief of police, Anton Hohmann and the
Mayor of the city of Manila, Justo Lukban, descended upon the houses, hustled some 170 inmates into patrol
wagons, and placed them aboard the steamers that awaited their arrival. The women were given no opportunity to
collect their belongings, and apparently were under the impression that they were being taken to a police station for
an investigation. They had no knowledge that they were destined for a life in Mindanao. They had not been asked if
they wished to depart from that region and had neither directly nor indirectly given their consent to the deportation.
The involuntary guests were received on board the steamers by a representative of the Bureau of Labor and a
detachment of Constabulary soldiers. The two steamers with their unwilling passengers sailed for Davao during the
night of October 25.
The vessels reached their destination at Davao on October 29. The women were landed and receipted for as
laborers by Francisco Sales, provincial governor of Davao, and by Feliciano Yigo and Rafael Castillo. The
governor and the hacendero Yigo, who appear as parties in the case, had no previous notification that the women
were prostitutes who had been expelled from the city of Manila.

Just about the time the Corregidor and the Negros were putting in to Davao, the attorney for the relatives
and friends of a considerable number of the deportees presented an application for habeas corpus to a member of the
Supreme Court. The application alleged that the women were illegally restrained of their liberty by Justo Lukban,
Mayor of the city of Manila, Anton Hohmann, chief of police of the city of Manila, and by certain unknown parties.
The writ was made returnable before the full court.
According to an exhibit attached to the answer of the fiscal, the 170 women were destined to be laborers, at
good salaries, on the haciendas of Yigo and Governor Sales. In open court, the fiscal admitted, in answer to
question of a member of the court, that these women had been sent out of Manila without their consent. The court
awarded the writ, in an order of November 4, that directed Justo Lukban, Mayor of the city of Manila, Anton
Hohmann, chief of police of the city of Manila, Francisco Sales, governor of the province of Davao, and Feliciano
Yigo, an hacendero of Davao, to bring before the court the persons therein named, alleged to be deprived of their
liberty, on December 2, 1918.
Before the date mentioned, seven of the women had returned to Manila at their own expense. On the day
named in the order, December 2nd, 1918, none of the persons in whose behalf the writ was issued were produced in
court by the respondents.

ISSUE: whether the writ of habeas corpus should be granted

HELD: Yes. One fact, and one fact only, need be recalled these one hundred and seventy women were isolated
from society, and then at night, without their consent and without any opportunity to consult with friends or to
defend their rights, were forcibly hustled on board steamers for transportation to regions unknown. Despite the
feeble attempt to prove that the women left voluntarily and gladly, that such was not the case is shown by the mere
fact that the presence of the police and the constabulary was deemed necessary and that these officers of the law
chose the shades of night to cloak their secret and stealthy acts. Indeed, this is a fact impossible to refute and
practically admitted by the respondents.
With this situation, a court would next expect to resolve the question By authority of what law did the
Mayor and the Chief of Police presume to act in deporting by duress these persons from Manila to another distant
locality within the Philippine Islands?
We turn to the statutes and we find Alien prostitutes can be expelled from the Philippine Islands in
conformity with an Act of congress. The Governor-General can order the eviction of undesirable aliens after a
hearing from the Islands. Act No. 519 of the Philippine Commission and section 733 of the Revised Ordinances of
the city of Manila provide for the conviction and punishment by a court of justice of any person who is a common
prostitute. But one can search in vain for any law, order, or regulation, which even hints at the right of the Mayor of
the city of Manila or the chief of police of that city to force citizens of the Philippine Islands and these women
despite their being in a sense lepers of society are nevertheless not chattels but Philippine citizens protected by the
same constitutional guaranties as are other citizens to change their domicile from Manila to another locality. On
the contrary, Philippine penal law specifically punishes any public officer who, not being expressly authorized by
law or regulation, compels any person to change his residence.

In other countries, as in Spain and Japan, the privilege of domicile is deemed so important as to be found in
the Bill of Rights of the Constitution.
Law defines power. Centuries ago Magna Charta decreed that "No freeman shall be taken, or
imprisoned, or be disseized of his freehold, or liberties, or free customs, or be outlawed, or exiled, or any other wise
destroyed; nor will we pass upon him nor condemn him, but by lawful judgment of his peers or by the law of the
land. We will sell to no man, we will not deny or defer to any man either justice or right.". No official, no matter
how high, is above the law. The courts are the forum which functionate to safeguard individual liberty and to punish
official transgressors. "The law," said Justice Miller "is the only supreme power in our system of government, and
every man who by accepting office participates in its functions is only the more strongly bound to submit to that
supremacy, and to observe the limitations which it imposes upon the exercise of the authority which it gives." "The
very idea," said Justice Matthews of the same high tribunal in another case, "that one man may be compelled to hold
his life, or the means of living, or any material right essential to the enjoyment of life, at the mere will of another,
seems to be intolerable in any country where freedom prevails, as being the essence of slavery itself." All this
explains the motive in issuing the writ of habeas corpus, and makes clear why we said in the very beginning that the
primary question was whether the courts should permit a government of men or a government of laws to be
established in the Philippine Islands.
What are the remedies of the unhappy victims of official oppression? The remedies of the citizen are three:
(1) Civil action; (2) criminal action, and (3) habeas corpus.
The first is an optional but rather slow process by which the aggrieved party may recoup money damages.
It may still rest with the parties in interest to pursue such an action, but it was never intended effectively and
promptly to meet any such situation as that now before us.
As to criminal responsibility, it is true that the Penal Code in force in these Islands provides:
Any public officer not thereunto authorized by law or by regulations of a general character in force in the
Philippines who shall banish any person to a place more than two hundred kilometers distant from his domicile, except
it be by virtue of the judgment of a court, shall be punished by a fine of not less than three hundred and twenty-five and
not more than three thousand two hundred and fifty pesetas.
Any public officer not thereunto expressly authorized by law or by regulation of a general character in force in the
Philippines who shall compel any person to change his domicile or residence shall suffer the penalty of destierro and a
fine of not less than six hundred and twenty-five and not more than six thousand two hundred and fifty pesetas. (Art.
211.)

Granted that habeas corpus is the proper remedy, respondents have raised three specific objections to its
issuance in this instance. The fiscal has argued (l) that there is a defect in parties petitioners, (2) that the Supreme
Court should not a assume jurisdiction, and (3) that the person in question are not restrained of their liberty by
respondents. It was finally suggested that the jurisdiction of the Mayor and the chief of police of the city of Manila
only extends to the city limits and that perforce they could not bring the women from Davao.
The first defense was not presented with any vigor by counsel.
The fiscal next contended that the writ should have been asked for in the Court of First Instance of Davao
or should have been made returnable before that court. It is a general rule of good practice that, to avoid unnecessary

expense and inconvenience, petitions for habeas corpus should be presented to the nearest judge of the court of first
instance. But this is not a hard and fast rule. The writ of habeas corpus may be granted by the Supreme Court or any
judge thereof enforcible anywhere in the Philippine Islands.
The last argument of the fiscal is more plausible and more difficult to meet.. A prime specification of an
application for a writ of habeas corpus is restraint of liberty. The essential object and purpose of the writ of habeas
corpus is to inquire into all manner of involuntary restraint as distinguished from voluntary, and to relieve a person
therefrom if such restraint is illegal. Any restraint which will preclude freedom of action is sufficient. The restraint
of liberty which began in Manila continued until the aggrieved parties were returned to Manila and released or until
they freely and truly waived his right.
Consider for a moment what an agreement with such a defense would mean. The chief executive of any
municipality in the Philippines could forcibly and illegally take a private citizen and place him beyond the
boundaries of the municipality, and then, when called upon to defend his official action, could calmly fold his hands
and claim that the person was under no restraint and that he, the official, had no jurisdiction over this other
municipality. We believe the true principle should be that, if the respondent is within the jurisdiction of the court and
has it in his power to obey the order of the court and thus to undo the wrong that he has inflicted, he should be
compelled to do so. Even if the party to whom the writ is addressed has illegally parted with the custody of a person
before the application for the writ is no reason why the writ should not issue. If the mayor and the chief of police,
acting under no authority of law, could deport these women from the city of Manila to Davao, the same officials
must necessarily have the same means to return them from Davao to Manila. The respondents, within the reach of
process, may not be permitted to restrain a fellow citizen of her liberty by forcing her to change her domicile and to
avow the act with impunity in the courts, while the person who has lost her birthright of liberty has no effective
recourse. The great writ of liberty may not thus be easily evaded.
We find, therefore, both on reason and authority, that no one of the defense offered by the
respondents constituted a legitimate bar to the granting of the writ of habeas corpus.

SHIGENORI KURODA, petitioner, vs. Major General RAFAEL JALANDONI, Brigadier General CALIXTO
DUQUE, Colonel MARGARITO TORALBA, Colonel IRENEO BUENCONSEJO, Colonel PEDRO
TABUENA, Major FEDERICO ARANAS, MELVILLE S. HUSSEY and ROBERT PORT, respondents.
G.R. No. L-2662

March 26, 1949

MORAN, C.J.:

FACTS: Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and Commanding
General of the Japanese Imperial Forces in The Philippines during a period covering 19433 and 19444 who is now
charged before a military Commission convened by the Chief of Staff of the Armed forces of the Philippines with
having unlawfully disregarded and failed "to discharge his duties as such command, permitting them to commit
brutal atrocities and other high crimes against noncombatant civilians and prisoners of the Imperial Japanese Forces
in violation of the laws and customs of war" comes before this Court seeking to establish the illegality of
Executive Order No. 68 of the President of the Philippines: to enjoin and prohibit respondents Melville S. Hussey

and Robert Port from participating in the prosecution of petitioner's case before the Military Commission and to
permanently prohibit respondents from proceeding with the case of petitioners.
In support of his case petitioner tenders the following principal arguments.
First. "That Executive Order No. 68 is illegal on the ground that it violates not only the provision of our
constitutional law but also our local laws to say nothing of the fact (that) the Philippines is not a signatory nor an
adherent to the Hague Convention on Rules and Regulations covering Land Warfare and therefore petitioners is
charged of 'crimes' not based on law, national and international." Hence petitioner argues "That in view off the
fact that this commission has been empanelled by virtue of an unconstitutional law an illegal order this commission
is without jurisdiction to try herein petitioner."
Second. That the participation in the prosecution of the case against petitioner before the Commission in behalf of
the United State of America of attorneys Melville Hussey and Robert Port who are not attorneys authorized by the
Supreme Court to practice law in the Philippines is a diminution of our personality as an independent state and their
appointment as prosecutor are a violation of our Constitution for the reason that they are not qualified to practice law
in the Philippines.
Third. That Attorneys Hussey and Port have no personality as prosecution the United State not being a party in
interest in the case.
Executive Order No. 68, establishing a National War Crimes Office prescribing rule and regulation
governing the trial of accused war criminals, was issued by the President of the Philippines on the 29th days of July,
1947

ISSUE: whether the said order is valid and constitutional

HELD: Yes. Article 2 of our Constitution provides in its section 3, that The Philippines renounces war as an
instrument of national policy and adopts the generally accepted principles of international law as part of the of the
nation.
In accordance with the generally accepted principle of international law of the present day including the
Hague Convention the Geneva Convention and significant precedents of international jurisprudence established by
the United Nation all those person military or civilian who have been guilty of planning preparing or waging a war
of aggression and of the commission of crimes and offenses consequential and incidental thereto in violation of the
laws and customs of war, of humanity and civilization are held accountable therefor. Consequently in the
promulgation and enforcement of Execution Order No. 68 the President of the Philippines has acted in conformity
with the generally accepted and policies of international law which are part of the our Constitution.
The promulgation of said executive order is an exercise by the President of his power as Commander in
chief of all our armed forces as upheld by this Court in the case of Yamashita vs. Styer when we said
War is not ended simply because hostilities have ceased. After cessation of armed hostilities
incident of war may remain pending which should be disposed of as in time of war. An importance incident

to a conduct of war is the adoption of measure by the military command not only to repel and defeat the
enemies but to seize and subject to disciplinary measure those enemies who in their attempt to thwart or
impede our military effort have violated the law of war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.)
Indeed the power to create a military commission for the trial and punishment of war criminals is an aspect
of waging war. And in the language of a writer a military commission has jurisdiction so long as a technical
state of war continues. This includes the period of an armistice or military occupation up to the effective of
a treaty of peace and may extend beyond by treaty agreement.
Consequently, the President as Commander in Chief is fully empowered to consummate this
unfinished aspect of war namely the trial and punishment of war criminal through the issuance and
enforcement of Executive Order No. 68.
It cannot be denied that the rules and regulation of the Hague and Geneva conventions form, part of and are
wholly based on the generally accepted principals of international law. In facts these rules and principles were
accepted by the two belligerent nation the United State and Japan who were signatories to the two Convention, Such
rule and principles therefore form part of the law of our nation even if the Philippines was not a signatory to the
conventions embodying them for our Constitution has been deliberately general and extensive in its scope and is not
confined to the recognition of rule and principle of international law as continued inn treaties to which our
government may have been or shall be a signatory.
Furthermore when the crimes charged against petitioner were allegedly committed the Philippines was
under the sovereignty of United States and thus we were equally bound together with the United States and with
Japan to the right and obligation contained in the treaties between the belligerent countries. These rights and
obligation were not erased by our assumption of full sovereignty. If at all our emergency as a free state entitles us to
enforce the right on our own of trying and punishing those who committed crimes against crimes against our people.
In this connection it is well to remember what we have said in the case of Laurel vs. Misa (76 Phil., 372):
. . . The change of our form government from Commonwealth to Republic does not affect the prosecution
of those charged with the crime of treason committed during then Commonwealth because it is an offense
against the same sovereign people. . . .
By the same token war crimes committed against our people and our government while we were a
Commonwealth are triable and punishable by our present Republic.
Petitioner challenges the participation of two American attorneys namely Melville S. Hussey and Robert
Port in the prosecution of his case on the ground that said attorney's are not qualified to practice law in Philippines
in accordance with our Rules of court and the appointment of said attorneys as prosecutors is violative of our
national sovereignty.
In the first place respondent Military Commission is a special military tribunal governed by a special law
and not by the Rules of court which govern ordinary civil court. There is nothing in said executive order which
requires that counsel appearing before said commission must be attorneys qualified to practice law in the Philippines
in accordance with the Rules of Court.
Secondly the appointment of the two American attorneys is not violative of our nation sovereignty. It is
only fair and proper that United States, which has submitted the vindication of crimes against her government and
her people to a tribunal of our nation should be allowed representation in the trial of those very crimes. The least that
we could do in the spirit of comity is to allow them representation in said trials.

Alleging that the United State is not a party in interest in the case petitioner challenges the personality of
attorneys Hussey and Port as prosecutors. It is of common knowledge that the United State and its people have been
equally if not more greatly aggrieved by the crimes with which petitioner stands charged before the Military
Commission. It can be considered a privilege for our Republic that a leader nation should submit the vindication of
the honor of its citizens and its government to a military tribunal of our country.
The Military Commission having been convened by virtue of a valid law with jurisdiction over the crimes
charged which fall under the provisions of Executive Order No. 68, and having said petitioner in its custody, this
Court will not interfere with the due process of such Military commission.

LEOVILLO C. AGUSTIN, petitioner, vs. HON. ROMEO F. EDU, in his capacity as Land Transportation
Commissioner; HON. JUAN PONCE ENRILE, in his capacity as Minister of National Defense; HON.
ALFREDO L. JUINIO, in his capacity as Minister Of Public Works, Transportation and Communications;
and HON: BALTAZAR AQUINO, in his capacity as Minister of Public Highways, respondents.
G.R. No. L-49112

February 2, 1979

FERNANDO, J.:

FACTS: The assailed Letter of Instruction No. 229 of President Marcos, states that " statistics show that one of the
major causes of fatal or serious accidents in land transportation is the presence of disabled, stalled or parked motor
vehicles along streets or highways without any appropriate early warning device to signal approaching motorists of
their presence; the hazards posed by such obstructions to traffic have been recognized by international bodies
concerned with traffic safety, the 1968 Vienna Convention on Road Signs and Signals and the United Nations
Organization (U.N.); the said Vienna Convention which was ratified by the Philippine Government under P.D. No.
207, recommended the enactment of local legislation for the installation of road safety signs and devices; [Now,
therefore, I, Ferdinand E. Marcos], President of the Philippines, in the interest of safety on all streets and highways,
including expressways or limited access roads, do hereby direct: 1. That all owners, users or drivers of motor
vehicles shall have at all times in their motor vehicles at least one (1) pair of early warning device consisting of
triangular, collapsible reflectorized plates in red and yellow colors at least 15 cms. at the base and 40 cms. at the
sides. 2. Whenever any motor vehicle is stalled or disabled or is parked for thirty (30) minutes or more on any street
or highway, including expressways or limited access roads, the owner, user or driver thereof shall cause the warning
device mentioned herein to be installed at least four meters away to the front and rear of the motor vehicle staged,
disabled or parked. 3. The Land Transportation Commissioner shall cause Reflectorized Triangular Early Warning
Devices to be prepared and issued to registered owners of motor vehicles, except motorcycles and trailers, charging
for each piece not more than 15 % of the acquisition cost. He shall also promulgate such rules and regulations as are
appropriate to effectively implement this order. Thereafter, it was amended by Letter of Instruction No. 479 in this
wise. "Paragraph 3 of Letter of Instruction No. 229 is hereby amended to read as follows: 3. The Land transportation
Commissioner shall require every motor vehicle owner to procure from any and present at the registration of his
vehicle, one pair of a reflectorized early warning device, as d bed of any brand or make chosen by mid motor vehicle
There was issued accordingly, by respondent Edu, the implementing rules and regulations on December 10,
1976. They were not enforced as President Marcos ordered a six-month period of suspension insofar as the
installation of early warning device as a pre-registration requirement for motor vehicle was concerned. Then another

Letter of Instruction the lifting of such suspension and directed the immediate implementation of Letter of
Instruction No. 229 as amended. It was not until August 29, 1978 that respondent Edu issued Memorandum Circular
No. 32, worded thus: "In pursuance of Letter of Instruction No. 716, dated June 30, 1978, the implementation of
Letter of Instruction No. 229, as amended by Letter of Instructions No. 479, requiring the use of Early Warning
Devices (EWD) on motor vehicle, the following rules and regulations are hereby issued.
Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle Car, Model 13035, already
properly equipped when it came out from the assembly lines with blinking lights fore and aft, which could very well
serve as an early warning device in case of the emergencies alleged that said Letter of Instruction No. 229, as
amended, "clearly violates the provisions and delegation of police power. For him they are "oppressive,
unreasonable, arbitrary, confiscatory, nay unconstitutional and contrary to the precepts of our compassionate New
Society.

ISSUE: whether Letter of Instruction No. 229 as amended by Letters of Instructions Nos. 479 and 716 as well as
Land transportation Commission Administrative Order No. 1 and its Memorandum Circular No. 32 violates the
constitutional provisions on due process of law, equal protection of law and undue delegation of police power.

HELD: No. Justice Laurel in Calalang v. Williams, identified police power with state authority to enact legislation
that may interfere with personal liberty or property in order to promote the general welfare. Persons and property
could thus 'be subjected to all kinds of restraints and burdens in order to we the general comfort, health and
prosperity of the state.' Shortly after independence in 1948, Primicias v. Fugoso reiterated the doctrine, such a
competence being referred to as 'the power to prescribe regulations to promote the health, morals, peace, education,
good order or safety, and general welfare of the people. The concept was set forth in negative terms by Justice
Malcolm in a pre-Commonwealth decision as 'that inherent and plenary power in the State which enables it to
prohibit all things hurtful to the comfort, safety and welfare of society. In that sense it could be hardly
distinguishable as noted by this Court in Morfe v. Mutuc with the totality of legislative power. It is in the above
sense the greatest and most powerful at. tribute of government. The police power is thus a dynamic agency, suitably
vague and far from precisely defined, rooted in the conception that men in organizing the state and imposing upon
its government limitations to safeguard constitutional rights did not intend thereby to enable an individual citizen or
a group of citizens to obstruct unreasonably the enactment of such salutary measures calculated to communal peace,
safety, good order, and welfare."
It was thus a heavy burden to be shouldered by petitioner, compounded by the fact that the particular police
power measure challenged was clearly intended to promote public safety. It would be a rare occurrence indeed for
this Court to invalidate a legislative or executive act of that character. None has been called to our attention, an
indication of its being non-existent. The futility of petitioner's effort to nullify both the Letter of Instruction and the
implementing rules and regulations becomes even more apparent considering his failure to lay the necessary factual
foundation to rebut the presumption of validity. As underlying questions of fact may condition the constitutionality
of legislation of this character, the presumption of constitutionality must prevail in the absence of some factual
foundation of record in overthrowing the statute.
There is nothing in the questioned Letter of Instruction No. 229, as amended, or in Administrative Order
No. 1, which requires or compels motor vehicle owners to purchase the early warning device prescribed thereby. All
that is required is for motor vehicle owners concerned like petitioner, to equip their motor vehicles with a pair of this

early warning device in question, procuring or obtaining the same from whatever source. In fact, with a little of
industry and practical ingenuity, motor vehicle owners can even personally make or produce this early warning
device so long as the same substantially conforms with the specifications laid down in said letter of instruction and
administrative order. Accordingly the early warning device requirement can neither be oppressive, onerous,
immoral, nor confiscatory.
The alleged infringement of the fundamental principle of non-delegation of legislative power is equally
without any support well-settled legal doctrines. Had petitioner taken the trouble to acquaint himself with
authoritative pronouncements from this Tribunal, he would not have the temerity to make such an assertion. An
exempt from the aforecited decision of Edu v. Ericta sheds light on the matter: "To avoid the taint of unlawful
delegation, there must be a standard, which implies at the very least that the legislature itself determines matters of
principle and lays down fundamental policy. Otherwise, the charge of complete abdication may be hard to repel A
standard thus defines legislative policy, marks its maps out its boundaries and specifies the public agency to apply it.
It indicates the circumstances under which the legislative command is to be effected. It is the criterion by which
legislative purpose may be carried out. Thereafter, the executive or administrative office designated may in
pursuance of the above guidelines promulgate supplemental rules and regulations. The standard may be either
express or implied. If the former, the non-delegation objection is easily met. The standard though does not have to
be spelled out specifically. It could be implied from the policy and purpose of the act considered as a whole. In the
Reflector Law clearly, the legislative objective is public safety. What is sought to be attained as in Calalang v.
Williams is "safe transit upon the roads.' This is to adhere to the recognition given expression by Justice Laurel in a
decision announced not too long after the Constitution came into force and effect that the principle of non-delegation
"has been made to adapt itself to the complexities of modern governments, giving rise to the adoption, within certain
limits, of the principle of "subordinate legislation" not only in the United States and England but in practically all
modern governments.' He continued: 'Accordingly, with the growing complexity of modern life, the multiplication
of the subjects of governmental regulation, and the increased difficulty of administering the laws, there is a
constantly growing tendency toward the delegation of greater powers by the legislature and toward the approval of
the practice by the courts.' Consistency with the conceptual approach requires the reminder that what is delegated is
authority non-legislative in character, the completeness of the statute when it leaves the hands of Congress being
assumed."

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and partnerships
adversely affected. by Republic Act No. 1180, petitioner, vs. JAIME HERNANDEZ, Secretary of Finance, and
MARCELINO SARMIENTO, City Treasurer of Manila, respondents.
G.R. No. L-7995
May 31, 1957
LABRADOR, J.:
FACTS: Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the
retail trade business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of the
Philippines, and against associations, partnerships, or corporations the capital of which are not wholly owned by
citizens of the Philippines, from engaging directly or indirectly in the retail trade; (2) an exception from the above
prohibition in favor of aliens actually engaged in said business on May 15, 1954, who are allowed to continue to
engaged therein, unless their licenses are forfeited in accordance with the law, until their death or voluntary
retirement in case of natural persons, and for ten years after the approval of the Act or until the expiration of term in
case of juridical persons; (3) an exception therefrom in favor of citizens and juridical entities of the United States;
(4) a provision for the forfeiture of licenses (to engage in the retail business) for violation of the laws on
nationalization, control weights and measures and labor and other laws relating to trade, commerce and industry; (5)
a prohibition against the establishment or opening by aliens actually engaged in the retail business of additional
stores or branches of retail business, (6) a provision requiring aliens actually engaged in the retail business to present

for registration with the proper authorities a verified statement concerning their businesses, giving, among other
matters, the nature of the business, their assets and liabilities and their offices and principal offices of judicial
entities; and (7) a provision allowing the heirs of aliens now engaged in the retail business who die, to continue such
business for a period of six months for purposes of liquidation.
Petitioner, for and in his own behalf and on behalf of other alien residents corporations and partnerships
adversely affected by the provisions of Republic Act. No. 1180, brought this action to obtain a judicial declaration
that said Act is unconstitutional, and to enjoin the Secretary of Finance and all other persons acting under him,
particularly city and municipal treasurers, from enforcing its provisions. Petitioner attacks the constitutionality of the
Act, contending that: (1) it denies to alien residents the equal protection of the laws and deprives of their liberty and
property without due process of law ; (2) the subject of the Act is not expressed or comprehended in the title thereof;
(3) the Act violates international and treaty obligations of the Republic of the Philippines; (4) the provisions of the
Act against the transmission by aliens of their retail business thru hereditary succession, and those requiring 100%
Filipino capitalization for a corporation or entity to entitle it to engage in the retail business, violate the spirit of
Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.
ISSUE: whether the disputed law falls within the police power, whether it violates the equal protection clause,
whether the law is void for being in conflict with treaty obligations
HED: No. We hold that the disputed law was enacted to remedy a real actual threat and danger to national
economy posed by alien dominance and control of the retail business and free citizens and country from dominance
and control; that the enactment clearly falls within the scope of the police power of the State, thru which and by
which it protects its own personality and insures its security and future; that the law does not violate the equal
protection clause of the Constitution because sufficient grounds exist for the distinction between alien and citizen in
the exercise of the occupation regulated, nor the due process of law clause, because the law is prospective in
operation and recognizes the privilege of aliens already engaged in the occupation and reasonably protects their
privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us to be plainly evident as a
matter of fact it seems not only appropriate but actually necessary and that in any case such matter falls within
the prerogative of the Legislature, with whose power and discretion the Judicial department of the Government may
not interfere; that the provisions of the law are clearly embraced in the title, and this suffers from no duplicity and
has not misled the legislators or the segment of the population affected; and that it cannot be said to be void for
supposed conflict with treaty obligations because no treaty has actually been entered into on the subject and the
police power may not be curtailed or surrendered by any treaty or any other conventional agreement.
Some members of the Court are of the opinion that the radical effects of the law could have been made less
harsh in its impact on the aliens. Thus it is stated that the more time should have been given in the law for the
liquidation of existing businesses when the time comes for them to close. Our legal duty, however, is merely to
determine if the law falls within the scope of legislative authority and does not transcend the limitations of due
process and equal protection guaranteed in the Constitution. Remedies against the harshness of the law should be
addressed to the Legislature; they are beyond our power and jurisdiction.

RAMON A. GONZALES, petitioner, vs. RUFINO G. HECHANOVA, as Executive Secretary, MACARIO


PERALTA, JR., as Secretary of Defense, PEDRO GIMENEZ, as Auditor General, CORNELIO
BALMACEDA, as Secretary of Commerce and Industry, and SALVADOR MARINO, Secretary of
Justice, respondents.
G.R. No. L-21897

October 22, 1963

CONCEPCION, J.:

FACTS: On September 22, 1963, respondent Executive Secretary authorized the importation of 67,000 tons of
foreign rice to be purchased from private sources, and created a rice procurement committee composed of the other

respondents herein for the implementation of said proposed importation. Thereupon, petitioner Gonzales a rice
planter, and president of the Iloilo Palay and Corn Planters Association, whose members are, likewise, engaged in
the production of rice and corn filed the petition herein, averring that, in making or attempting to make said
importation of foreign rice, the respondents "are acting without jurisdiction or in excess of jurisdiction", because
Republic Act No. 3452 which allegedly repeals or amends Republic Act No. 220 explicitly prohibits the
importation of rice and corn "the Rice and Corn Administration or any other government agency;" that petitioner has
no other plain, speedy and adequate remedy in the ordinary course of law; and that a preliminary injunction is
necessary for the preservation of the rights of the parties during the pendency this case and to prevent the judgment
therein from coming ineffectual. Petitioner prayed, therefore, that said petition be given due course; that a writ of
preliminary injunction be forthwith issued restraining respondent their agents or representatives from implementing
the decision of the Executive Secretary to import the aforementioned foreign rice; and that, after due hearing,
judgment be rendered making said injunction permanent.

ISSUE: whether respondent Executive Secretary has the power to authorize the importation in question

HED: None.
I. Sufficiency of petitioner's interest.
Petitioner, as a planter with a rice land of substantial proportion, is entitled to a chance to sell to the
Government the rice it now seeks to buy abroad. Moreover, since the purchase of said commodity will have to be
effected with public funds mainly raised by taxation, and as a rice producer and landowner petitioner must
necessarily be a taxpayer, it follows that he has sufficient personality and interest to seek judicial assistance with a
view to restraining what he believes to be an attempt to unlawfully disburse said funds.

II. Exhaustion of administrative remedies.


The principle requiring the previous exhaustion of administrative remedies is not applicable where the
question in dispute is purely a legal one", or where the controverted act is "patently illegal" or was performed
without jurisdiction or in excess of jurisdiction, or where the respondent is a department secretary, whose acts as an
alter-ego of the President bear the implied or assumed approval of the latter, unless actually disapproved by him,or
where there are circumstances indicating the urgency of judicial intervention. The case at bar falls under each one of
the foregoing exceptions to the general rule.

III. Merits of petitioner's cause of action.


Regardless of whether Republic Act No. 3452 repeals Republic Act No. 2207, as contended by petitioner
herein - on which our view need not be expressed we are unanimously of the opinion - assuming that said
Republic Act No. 2207 is still in force that the two Acts are applicable to the proposed importation in question
because the language of said laws is such as to include within the purview thereof all importations of rice and corn

into the Philippines". Pursuant to Republic Act No. 2207, "it shall be unlawful for any person, association,
corporation orgovernment agency to import rice and corn into any point in the Philippines", although, by way of
exception, it adds, that "the President of the Philippines may authorize the importation of these commodities through
any government agency that he may designate", is the conditions prescribed in Section 2 of said Act are present.
Similarly, Republic Act No. 3452 explicitly enjoins "the Rice and Corn Administration or any government agency"
from importing rice and corn.
The attempt to justify the proposed importation by invoking reasons of national security predicated upon
the "worsening situation in Laos and Vietnam", and "the recent tension created by the Malaysia problem" - and the
alleged powers of the President as Commander-in-Chief of all armed forces in the Philippines, under Section 2 of
the National Defense Act , overlooks the fact that the protection of local planters of rice and corn in a manner that
would foster and accelerate self-sufficiency in the local production of said commodities constitutes a factor that is
vital to our ability to meet possible national emergency. Even if the intent in importing goods in anticipation of such
emergency were to bolster up that ability, the latter would, instead, be impaired if the importation were so made as to
discourage our farmers from engaging in the production of rice.
Besides, the stockpiling of rice and corn for purpose of national security and/or national emergency is
within the purview of Republic Act No. 3452. Section 3 thereof expressly authorizes the Rice and Corn
Administration "to accumulate stocks as a national reserve in such quantities as it may deem proper and necessary
to meet any contingencies". Moreover, it ordains that "the buffer stocks held as a national reserve ... be deposited by
the administration throughout the country under the proper dispersal plans ... and may be released only upon the
occurrence of calamities or emergencies ...".
Again, the provisions of Section 2 of Commonwealth Act No. 1, upon which respondents rely so much, are
not self-executory. They merely outline the general objectives of said legislation. The means for the attainment of
those objectives are subject to congressional legislation. Thus, the conditions under which the services of citizens, as
indicated in said Section 2, may be availed of, are provided for in Sections 3, 4 and 51 to 88 of said Commonwealth
Act No. 1. Similarly, Section 5 thereof specifies the manner in which resources necessary for our national defense
may be secured by the Government of the Philippines, but only "during a national mobilization",which does not
exist. Inferentially, therefore, in the absence of a national mobilization, said resources shall be produced in such
manner as Congress may by other laws provide from time to time. Insofar as rice and corn are concerned, Republic
Acts Nos. 2207 and 3452, and Commonwealth Act No. 138 are such laws.
It has been suggested that even if the proposed importation violated Republic Acts Nos. 2207 and 3452, it
should, nevertheless, be permitted because "it redounds to the benefit of the people". Salus populi est suprema lex, it
is said.
If there were a local shortage of rice, the argument might have some value. But the respondents, as officials
of this Government, have expressly affirmed again and again that there is no rice shortage. And the importation is
avowedly for stockpile of the Army not the civilian population.
But let us follow the respondents' trend of thought. It has a more serious implication that appears on the
surface. It implies that if an executive officer believes that compliance with a certain statute will not benefit the
people, he is at liberty to disregard it. That idea must be rejected - we still live under a rule of law.
And then, "the people" are either producers or consumers. Now as respondents explicitly admit
Republic Acts Nos. 2207 and 3452 were approved by the Legislature for the benefit of producers and consumers,
i.e., the people, it must follow that the welfare of the people lies precisely in the compliance with said Acts.

It is not for respondent executive officers now to set their own opinions against that of the Legislature, and adopt
means or ways to set those Acts at naught. Anyway, those laws permit importation but under certain conditions,
which have not been, and should be complied with.
IV. The contracts with Vietnam and Burma
Although the President may, under the American constitutional system enter into executive
agreements without previous legislative authority, he may not, by executive agreement, enter into a transaction
which is prohibited by statutes enacted prior thereto. Under the Constitution, the main function of the Executive is to
enforce laws enacted by Congress.

IN RE: PETITION OF ARTURO EFREN GARCIA for admission to the Philippine Bar without taking the
examination. ARTURO EFREN GARCIA, petitioner.
August 15, 1961
BARRERA, J.:

FACTS: Arturo E. Garcia has applied for admission to the practice of law in the Philippines without submitting to
the required bar examinations. In his verified petition, he avers, among others, that he is a Filipino citizen born in
Bacolor City, Province of Negros Occidental, of Filipino parentage; that he had taken and finished in Spain, the
course of "Bachillerato Superior"; that he was approved, selected and qualified by the "Instituto de Cervantes" for
admission to the Central University of Madrid where he studied and finished the law course graduating there as
"Licenciado En Derecho"; that thereafter he was allowed to practice the law profession in Spain; and that under the
provision of the Treaty of Academic Degrees and the Exercise of Professions between the Republic of the
Philippines and the Spanish state, he is entitled to practice the law profession in the Philippines without submitting
to the required bar examinations.

ISSUE: whether the petition should be denied

HELD: Yes. (1) The provisions of the Treaty on Academic Degrees and the Exercise of Professions between the
Republic of the Philippines and the Spanish State can not be invoked by applicant. Under Article 11 thereof;

The Nationals of each of the two countries who shall have obtained recognition of the validity of
their academic degrees by virtue of the stipulations of this Treaty, can practice their professions within the
territory of the Other, . . .. (Emphasis supplied).
from which it could clearly be discerned that said Treaty was intended to govern Filipino citizens desiring to practice
their profession in Spain, and the citizens of Spain desiring to practice their professions in the Philippines. Applicant
is a Filipino citizen desiring to practice the legal profession in the Philippines. He is therefore subject to the laws of
his own country and is not entitled to the privileges extended to Spanish nationals desiring to practice in the
Philippines.
(2) Article I of the Treaty, in its pertinent part, provides .
The nationals of both countries who shall have obtained degree or diplomas to practice the liberal
professions in either of the Contracting States, issued by competent national authoritie
s, shall be deemed competent to exercise said professions in the territory of the Other, subject to the laws and
regulations of the latter. . . ..
It is clear, therefore, that the privileges provided in the Treaty invoked by the applicant are made expressly
subject to the laws and regulations of the contracting State in whose territory it is desired to exercise the legal
profession; and Section 1 of Rule 127, in connection with Sections 2,9, and 16 thereof, which have the force of law,
require that before anyone can practice the legal profession in the Philippine he must first successfully pass the
required bar examinations; and
(3) The aforementioned Treaty, concluded between the Republic of the Philippines and the Spanish State
could not have been intended to modify the laws and regulations governing admission to the practice of law in the
Philippines, for the reason that the Executive Department may not encroach upon the constitutional prerogative of
the Supreme Court to promulgate rules for admission to the practice of law in the Philippines, the lower to repeal,
alter or supplement such rules being reserved only to the Congress of the Philippines. (See Sec. 13, Art VIII, Phil.
Constitution).

THE PEOPLE OF THE PHILIPPINES vs. TRANQUILINO LAGMAN


G.R. No. L-45892

July 13, 1938

AVANCEA, J.:

FACTS: In these two cases, the appellants Tranquilino and Primitivo de Sosa are charged with a violation of
section 60 of Commonwealth Act No. 1, known as the National Defense Law. It is alleged that these two
appellants, being Filipinos and having reached the age of twenty years in 1936, willfully and unlawfully
refused to register in the military service between the 1st and 7th of April of said year, notwithstanding the fact
that they had been required to do so. The evidence shows that these two appellants were duly notified by the
corresponding authorities to appear before the Acceptance Board in order to register for military service in
accordance with law, and that the said appellants, in spite of these notices, had not registered up to the date of
the filing of the information.
The appellants do not deny these facts, but they allege in defense that they have not registered in the military
service because Primitivo de Sosa is fatherless and has a mother and a brother eight years old to support, and
Tranquilino Lagman also has a father to support, has no military learnings, and does not wish to kill or be
killed.
Each of these appellants was sentenced by the Court of First Instance to one month and one day of
imprisonment, with the costs.

ISSUE: whether the National Defense Law, under which the accused were sentenced is unconstitutional

HELD: No. Section 2, Article II of the Constitution of the Philippines provides as follows: SEC. 2. The
defense of the state is a prime duty of government, and in the fulfillment of this duty all citizens may be
required by law to render personal military or civil service.
The National Defense Law, in so far as it establishes compulsory military service, does not go against
this constitutional provision but is, on the contrary, in faithful compliance therewith. The duty of the
Government to defend the State cannot be performed except through an army. To leave the organization of an
army to the will of the citizens would be to make this duty of the Government excusable should there be no
sufficient men who volunteer to enlist therein.
1vvphl.nt

In the United States the courts have held in a series of decisions that the compulsory military service
adopted by reason of the civil war and the world war does not violate the Constitution, because the power to
establish it is derived from that granted to Congress to declare war and to organize and maintain an army. This
is so because the right of the Government to require compulsory military service is a consequence of its duty to
defend the State and is reciprocal with its duty to defend the life, liberty, and property of the citizen. In the case
of Jacobson vs. Massachusetts (197 U.S., 11; 25 Sup. Ct. Rep., 385), it was said that, without violating the
Constitution, a person may be compelled by force, if need be, against his will, against his pecuniary interests,
and even against his religious or political convictions, to take his place in the ranks of the army of his country,
and risk the chance of being shot down in its defense. In the case of United States vs. Olson (253 Fed., 233), it
was also said that this is not deprivation of property without due process of law, because, in its just sense, there
is no right of property to an office or employment.

The circumstance that these decisions refer to laws enacted by reason on the actual existence of war
does not make our case any different, inasmuch as, in the last analysis, what justifies compulsory military
service is the defense of the State, whether actual or whether in preparation to make it more effective, in case
of need. The circumstance that the appellants have dependent families to support does not excuse them from
their duty to present themselves before the Acceptance Board because, if such circumstance exists, they can
ask for determent in complying with their duty and, at all events, they can obtain the proper pecuniary
allowance to attend to these family responsibilities (secs. 65 and 69 of Commonwealth Act No. 1).

GREGORIO AGLIPAY, petitioner, vs. JUAN RUIZ, respondent.


G.R. No. L-45459

March 13, 1937

LAUREL, J.:

FACTS: The petitioner, Mons. Gregorio Aglipay, Supreme Head of the Philippine Independent Church, seeks the
issuance from this court of a writ of prohibition to prevent the respondent Director of Posts from issuing and selling
postage stamps commemorative of the Thirty-third International Eucharistic Congress.
In May, 1936, the Director of Posts announced in the dailies of Manila that he would order the issues of
postage stamps commemorating the celebration in the City of Manila of the Thirty-third international Eucharistic
Congress, organized by the Roman Catholic Church. The petitioner, in the fulfillment of what he considers to be a
civic duty, requested Vicente Sotto, Esq., member of the Philippine Bar, to denounce the matter to the President of
the Philippines. In spite of the protest of the petitioner's attorney, the respondent publicly announced having sent to
the United States the designs of the postage stamps for printing as follows: "In the center is chalice, with grape vine
and stalks of wheat as border design. The stamps are blue, green, brown, cardinal red, violet and orange, 1 inch by
1,094 inches. The denominations are for 2, 6, 16, 20, 36 and 50 centavos." The said stamps were actually issued and
sold though the greater part thereof, to this day, remains unsold. The further sale of the stamps is sought to be
prevented by the petitioner herein.
The more important question raised refers to the alleged violation of the Constitution by the respondent in
issuing and selling postage stamps commemorative of the Thirty-third International Eucharistic Congress.

ISSUE: whether this action of the respondent is violative of the provisions of section 23, subsection 3, Article VI,
of the Constitution

HED: No. Section 23, subsection 3, Article VI, of the Constitution of the Philippines provides: No public money or
property shall ever be appropriated, applied, or used, directly or indirectly, for the use, benefit, or support of any
sect, church, denomination, secretarian, institution, or system of religion, or for the use, benefit, or support of any
priest, preacher, minister, or other religious teacher or dignitary as such, except when such priest, preacher, minister,
or dignitary is assigned to the armed forces or to any penal institution, orphanage, or leprosarium.
Religious freedom, as a constitutional mandate is not inhibition of profound reverence for religion and is
not denial of its influence in human affairs. Religion as a profession of faith to an active power that binds and
elevates man to his Creator is recognized.
In the case at bar, it appears that the respondent Director of Posts issued the postage stamps in question
under the provisions of Act No. 4052 of the Philippine Legislature. This Act is as follows:
No. 4052. AN ACT APPROPRIATING THE SUM OF SIXTY THOUSAND PESOS AND MAKING
THE SAME AVAILABLE OUT OF ANY FUNDS IN THE INSULAR TREASURY NOT OTHERWISE
APPROPRIATED FOR THE COST OF PLATES AND PRINTING OF POSTAGE STAMPS WITH NEW
DESIGNS, AND FOR OTHER PURPOSES.
It will be seen that the Act appropriates the sum of sixty thousand pesos for the costs of plates and printing
of postage stamps with new designs and other expenses incident thereto, and authorizes the Director of Posts, with
the approval of the Secretary of Public Works and Communications, to dispose of the amount appropriated in the
manner indicated and "as often as may be deemed advantageous to the Government".
Act No. 4052 contemplates no religious purpose in view. What it gives the Director of Posts is the
discretionary power to determine when the issuance of special postage stamps would be "advantageous to the
Government." Of course, the phrase "advantageous to the Government" does not authorize the violation of the
Constitution. It does not authorize the appropriation, use or application of public money or property for the use,
benefit or support of a particular sect or church. In the present case, however, the issuance of the postage stamps in
question by the Director of Posts and the Secretary of Public Works and Communications was not inspired by any
sectarian denomination. The stamps were not issue and sold for the benefit of the Roman Catholic Church. Nor were
money derived from the sale of the stamps given to that church. On the contrary, it appears from the latter of the
Director of Posts that the only purpose in issuing and selling the stamps was "to advertise the Philippines and attract
more tourist to this country." The officials concerned merely, took advantage of an event considered of international
importance "to give publicity to the Philippines and its people". It is significant to note that the stamps as actually
designed and printed instead of showing a Catholic Church chalice as originally planned, contains a map of the
Philippines and the location of the City of Manila, and an inscription as follows: "Seat XXXIII International
Eucharistic Congress, Feb. 3-7,1937." What is emphasized is not the Eucharistic Congress itself but Manila, the
capital of the Philippines, as the seat of that congress. It is obvious that while the issuance and sale of the stamps in
question may be said to be inseparably linked with an event of a religious character, the resulting propaganda, if any,
received by the Roman Catholic Church, was not the aim and purpose of the Government. We are of the opinion that
the Government should not be embarassed in its activities simply because of incidental results, more or less religious
in character, if the purpose had in view is one which could legitimately be undertaken by appropriate legislation. The
main purpose should not be frustrated by its subordinate to mere incidental results not contemplated.
We are much impressed with the vehement appeal of counsel for the petitioner to maintain inviolate the
complete separation of church and state and curb any attempt to infringe by indirection a constitutional inhibition.

Indeed, in the Philippines, once the scene of religious intolerance and prescription, care should be taken that at this
stage of our political development nothing is done by the Government or its officials that may lead to the belief that
the Government is taking sides or favoring a particular religious sect or institution. But, upon very serious reflection,
examination of Act No. 4052, and scrutiny of the attending circumstances, we have come to the conclusion that there
has been no constitutional infraction in the case at bar, Act No. 4052 grants the Director of Posts, with the approval
of the Secretary of Public Works and Communications, discretion to misuse postage stamps with new designs "as
often as may be deemed advantageous to the Government."

DOMINADOR L. TARUC, WILBERTO DACERA, NICANOR GALANIDA, RENERIO CANTA, JERRY


CANTA, CORDENCIO CONSIGNA, SUSANO ALCALA, LEONARDO DIZON, SALVADOR
GELSANO and BENITO LAUGO, petitioners, vs. BISHOP PORFIRIO B. DE LA CRUZ, REV. FR.
RUSTOM FLORANO and DELFIN BORDAS, respondents.
[G.R. No. 144801. March 10, 2005]
CORONA, J.:

FACTS: Petitioners were lay members of the Philippine Independent Church (PIC) in Socorro, Surigao del Norte.
Respondents Porfirio de la Cruz and Rustom Florano were the bishop and parish priest, respectively, of the same
church in that locality. Petitioners, led by Dominador Taruc, clamored for the transfer of Fr. Florano to another
parish but Bishop de la Cruz denied their request. It appears from the records that the family of Fr. Floranos wife
belonged to a political party opposed to petitioner Tarucs, thus the animosity between the two factions with Fr.
Florano being identified with his wifes political camp. Bishop de la Cruz, however, found this too flimsy a reason
for transferring Fr. Florano to another parish.
Meanwhile, hostility among the members of the PIC in Socorro, Surigao del Norte worsened when petitioner
Taruc tried to organize an open mass to be celebrated by a certain Fr. Renato Z. Ambong during the town fiesta of
Socorro. When Taruc informed Bishop de la Cruz of his plan, the Bishop tried to dissuade him from pushing
through with it because Fr. Ambong was not a member of the clergy of the diocese of Surigao and his credentials as
a parish priest were in doubt. The Bishop also appealed to petitioner Taruc to refrain from committing acts inimical
and prejudicial to the best interests of the PIC. He likewise advised petitioners to air their complaints before the
higher authorities of PIC if they believed they had valid grievances against him, the parish priest, the laws and
canons of the PIC.
Bishop de la Cruz, however, failed to stop Taruc from carrying out his plans. Taruc and his sympathizers
proceeded to hold the open mass with Fr. Ambong as the celebrant.
Bishop de la Cruz declared petitioners expelled/excommunicated from the Philippine Independent Church for
reasons of: (1) disobedience to duly constituted authority in the Church; (2) inciting dissension and (3) for
threatening to forcibly occupy the Parish Church causing anxiety and fear among the general membership.
Petitioners appealed to the Obispo Maximo and sought reconsideration of the above decision.

Because of the order of expulsion/excommunication, petitioners filed a complaint for damages with
preliminary injunction against Bishop de la Cruz before the RTC of Surigao City. They impleaded Fr. Florano and
one Delfin T. Bordas on the theory that they conspired with the Bishop to have petitioners expelled and
excommunicated from the PIC. They contended that their expulsion was illegal because it was done without trial
thus violating their right to due process of law.
The appellate court reversed and set aside the decision of the court a quo.

ISSUE: whether or not the courts have jurisdiction to hear a case involving the expulsion/excommunication of
members of a religious institution.

HED:

None. Section 5, Article III or the Bill of Rights of the 1987 Constitution specifically provides that:

Sec. 5. No law shall be made respecting an establishment of religion or prohibiting the free exercise thereof. The
free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever
be allowed. No religious test shall be required for the exercise of civil or political rights.
In our jurisdiction, we hold the Church and the State to be separate and distinct from each other. Give to
Ceasar what is Ceasars and to God what is Gods. We have, however, observed as early as 1928 that:
upon the examination of the decisions it will be readily apparent that cases involving questions relative to
ecclesiastical rights have always received the profoundest attention from the courts, not only because of their
inherent interest, but because of the far reaching effects of the decisions in human society. [However,] courts have
learned the lesson of conservatism in dealing with such matters, it having been found that, in a form of government
where the complete separation of civil and ecclesiastical authority is insisted upon, the civil courts must not allow
themselves to intrude unduly in matters of an ecclesiastical nature.
In disputes involving religious institutions or organizations, there is one area which the Court should not
touch: doctrinal and disciplinary differences. Thus, The amendments of the constitution, restatement of articles of
religion and abandonment of faith or abjuration alleged by appellant, having to do with faith, practice, doctrine, form
of worship, ecclesiastical law, custom and rule of a church and having reference to the power of excluding from
the church those allegedly unworthy of membership, are unquestionably ecclesiastical matters which are
outside the province of the civil courts.

CALALANG vs. A. D. WILLIAMS


G.R. No. 47800 December 2, 1940
J.B.L. REYES
FACTS: The National Traffic Commission resolved to recommend to the Director of Public Works and to the
Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing along
Rosario Street extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and
from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to
Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante
Bridge to traffic. The Chairman of the National Traffic Commission, on 18 July 1940, recommended to the Director

of Public Works the adoption of the measure proposed in the resolution, in pursuance of the provisions of
Commonwealth Act 548, which authorizes said Director of Public Works, with the approval of the Secretary of
Public Works and Communications, to promulgate rules and regulations to regulate and control the use of and traffic
on national roads.
On 2 August 1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works
and Communications, recommended to the latter the approval of the recommendation made by the Chairman of the
National Traffic Commission, with the modification that the closing of Rizal Avenue to traffic to animal-drawn
vehicles be limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street.
On 10 August 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the
Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed
to traffic of animal-drawn vehicles, between the points and during the hours as indicated, for a period of 1 year from
the date of the opening of the Colgante Bridge to traffic. The Mayor of Manila and the Acting Chief of Police of
Manila have enforced and caused to be enforced the rules and regulations thus adopted.
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before the
Supreme court the petition for a writ of prohibition against A. D. Williams, as Chairman of the National Traffic
Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and
Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of
Police of Manila.
ISSUE: 1) Whether the rules and regulations promulgated by the Director of Public Works infringe upon the
constitutional precept regarding the promotion of social justice to insure the well-being and economic security of all
the people
2) Whether or not there is undue delegation of legislative power
HELD: 1) The promotion of social justice is to be achieved not through a mistaken sympathy towards any given
group. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic forces by the State so that justice in its rational and objectively
secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people,
the adoption by the Government of measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of
the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life, consistent with the fundamental and
paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about
"the greatest good to the greatest number."
2) There is no undue delegation of legislative power. Commonwealth Act 548 does not confer legislative
powers to the Director of Public Works. The authority conferred upon them and under which they promulgated the
rules and regulations now complained of is not to determine what public policy demands but merely to carry out the
legislative policy laid down by the National Assembly in said Act, to wit, to promote safe transit upon and avoid
obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive
orders of the President of the Philippines and to close them temporarily to any or all classes of traffic whenever
the condition of the road or the traffic makes such action necessary or advisable in the public convenience and
interest.
The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the
ascertainment of the facts and circumstances upon which the application of said law is to be predicated.
To promulgate rules and regulations on the use of national roads and to determine when and how long a national
road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of
public convenience and interest, is an administrative function which cannot be directly discharged by the National
Assembly.
It must depend on the discretion of some other government official to whom is confided the duty of
determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such
discretion is the making of the law.