SSS vs.

CA(120 SCRA 707)

FACTS:
Spouses David and Socorro Cruz, applied and granted a real estate loan by the SSS with
residential lot located at Pateros, Rizal as collateral. The spouses Cruz complied with their monthly
payments. When delayed were incurred in their monthly payments SSS filed a petition for foreclosure of
their real estate mortgage executed by the spouses Cruz on the ground that the spouses Cruz defaulted in
payment, Pursuant for these application for foreclosure notices were published on the second notice the
counsel for spouses Cruz sent a letter to SSS informing the latter that his clients are up to date in their
payment of the monthly amortization and the SSS should discontinued the publication of the notices of
foreclosure. This request remain unheaded, this spouses Cruz filed an action for damages against SSS
before RTC in Rizal. SSS invoking its immunity from suit being an agency of the government performing
government function. The trial court and court of appeal nevertheless awarded damages in favor of
spouses Cruz which was affirmed by court of appeal, Hence this petition.

ISSUE:
Whether or not SSS is immune from suit.

HELD:
Negative.. The SSS has a distinct legal personality and it can be sued for damages. The SSS does
not enjoy immunity from suit by express statutory consent.

It has corporated power separate and distinct from the government. SSS own organic act
specifically provides that it can sue and be sued in court. These words “sue and be sued” embrace all civil
process incident to a legal action. So that even assuming that the SSS, as it claims, enjoys immunity from
suit as an entity performing governmental function, by virtue of the explicit provision of the aforecited
enabling law, the government must be deemed to have waived immunity in respect of the SSS, although it
does not thereby concede its liability that statutory law has given to the private citizen a remedy for the
enforcement and protection of his rights. The SSS thereby has been required to submit to the jurisdiction
of the court; subject to its right to interpose any lawful defense.

MUNICIPALITY OF SAN FERNANDO VS JUDGE FIRME

G.R. No. L-52179 195 SCRA 692 April 8, 1991

Facts:

The case was filed by petitioner, which is a municipal corporation existing under and in
accordance with the laws of the Republic of the Philippines.

A collision occurred involving a passenger jeepney owned by the Estate of Macario Nieveras, a
gravel and sand truck 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 Baniña Sr. died as a result of the injuries they sustained and four others suffered
varying degrees of physical injuries.

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. However, the defendants
filed a Third Party Complaint against the petitioner and the driver of a dump truck of petitioner. 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 ordering the petitioner and Bislig to pay the plaintiffs. The
owner and driver of the jeepney were absolved from liability. Petitioner filed a motion for reconsideration
which was dismissed for having been filed out of time.

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Issues:
Whether or not the respondent court committed grave abuse of discretion when it deferred and
failed to resolve the defense of non-suability of the State amounting to lack of jurisdiction in a motion to
dismiss.

Discussions:
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. 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.

Rulings:
Yes. In the case at bar, the judge deferred the resolution of the defense of non-suability of the State
until trial. However, the 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, the judge acted in excess of his jurisdiction when in his decision, he held the
municipality liable for the quasi-delict committed by its regular employee.

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.

NATIONAL IRRIGATION ADMINISTRATION VS. COURT OF APPEALS

FACTS:

Sometime in 1967, petitioner National Irrigation Administration (NIA for brevity) constructed an
irrigation canal on the property of Isabel and Virginia Tecson which passed through the private
respondents’ landholdings as said irrigation canal traverses the Cinco-Cinco Creek which abuts said
landholding. The irrigation canal has two (2) outlets which provide private respondents’ landholdings
with water coming from said canal and at the same time serve to drain the excess water of said
landholdings.

On February 13, 1975, private respondents filed a complaint for the abatement of nuisance with damages
against petitioners NIA and/or the Administrator of the National Irrigation Administration alleging that
the two (2) outlets constructed on both sides of the irrigation canal were not provided with gates to
regulate the flow of water from the canal to their landholdings which resulted to the inundation of said
landholdings causing the former to sustain damages consisting in the destruction of the planted palay
crops and also prevented them from planting on their landholdings.

The trial court rendered its decision, ordering NIA to pay the respondents damages incurred.

Hence, this petition. It is petitioners’ position that the respondent appellate court erred in affirming the
decision of the trial court because NIA is immune from suit for quasi-delict or tort and assuming NIA
could be sued, it is not liable for tort since it did not act through a special agent as required under
paragraph 6, Article 2180 of the Civil Code of the Philippines.
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ISSUE:
WON NIA is Immune from suit. NO

HELD:

1. PUBLIC CORPORATIONS; NATIONAL IRRIGATION ADMINISTRATION; BEING A

CORPORATE BODY PERFORMING PROPRIETARY FUNCTIONS IS NOT IMMUNE FROM SUIT.
— As correctly ruled by the court below, the NIA "is not immune from suit, by virtue of the express
provision of P.D. No. 552." A reading of Section 2, sub-paragraph (f) of P.D. No. 552, amending
Republic Act No. 3601 shows the granting to NIA the power "to exercise all the powers of a corporation
under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act." Paragraph
4 of said law also provide that petitioner NIA may sue and be sued in court for all kind of actions, whether
contractual or quasi-contractual, in the recovery of compensation and damages as in the instant case
considering that private respondents’ action is based on damages caused by the negligence of petitioners.
This Court had previously held that "the National Irrigation Administration is a government agency with a
juridical personality separate and distinct from the government. It is not a mere agency of the government
but a corporate body performing proprietary functions" as it has its own assets and liabilities as well as its
own corporate powers to be exercised by a Board of Directors.

PNR v. IAC
GR No. 70547; January 22, 1993

FACTS:

The passenger express train of Philippine National Railways (PNR) and a passenger bus of
Baliwag Transit Inc. collided at the railroad crossing at Barrio Balungao, Calumpit Bulacan at 1:30 in the
afternoon of August 10, 1947 causing damage to the bus and its passengers, 18 of whom died and 53
suffered physical injuries. Plaintiff alleges that the collision was due to the negligence and imprudence of
PNR and its engineer Honorio Cirbado in operating in a busy intersection without any bars, semaphores,
signal lights, flagman or switchman.

ISSUE:
WON PNR is immune from suit. NO

HELD:

By the doctrine of implied powers, the power to sue and be sued is implicit from the faculty to
transact private business. PNR is not exercising governmental powers, as such it is not immune from suit.

The Philippine National Railways, although owned and operated by the government, was not
immune from suit as it does not exercise sovereign but purely proprietary and business functions.
Accordingly, as the CAA was created to undertake the management of airport operations which primarily
involve proprietary functions, it cannot avail of the immunity from suit accorded to government agencies
performing strictly governmental functions.

Department of Agriculture
vs NLRC
Ponente: Vitug

Facts:
The DA and Sultan Security Agency entered into a contract for security services, pursuant to the
agreement guards were deployed by Sultan Agency in the various premises of the DA. September 1990,
several guards of Sultan 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 Regional Arbitration Branch of CDO against the DA and Sultan Security Agency.

The executive labor arbiter rendered that DA and Sultan Agency are jointly and severally liable. Sultan
didn't appeal the decision, thus it became final and executory. July 1991, the Labor Arbiter issued a writ
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of execution commanding the City Sheriff to enforce the judgment against the property of DA and
Sultan's property.

DA, filed a petition for injunction, prohibition and mandamus, with prayer for preliminary writ of
injunction was filed by the petitioner with the NLRC CDO, saying that the writ issued was affected
without the labor arbiter’s jurisdiction over the petitioner. DA also pointed out that the attachment or
seizure of its property would hamper and jeopardize petitioner's governmental functions to the prejudice
of the public good.

This petition charges NLRC with grave abuse of discretion for refusing to quash the writ of execution.
The NLRC has disregarded the cardinal rule on the non-suability of the State. NLRC argued on the other
hand that the DA has impliedly waived its immunity from suit by concluding a service contract with
Sultan Agency.

Issue: Whether the DA waived its immunity from suit.

Ruling:
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 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.

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.

CAA VS. CA

FACTS:

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, December 14, 1968, 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].

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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.

Petitioner now comes before this Court raising that The Court of Appeals gravely erred in not holding that
the present the CAA is really a suit against the Republic of the Philippines which cannot be sued without
its consent, which was not given in this case.

ISSUE:
WON the petition is suit against the state. NO.

HELD:

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.

xxx xxx xxx

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. [National Airports Corp. v. Teodoro, supra, p. 207.]

xxx xxx xxx

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).<äre||anº•1àw> Said Act provides:

Sec. 32. Powers and Duties of the Administrator. Subject to the general — control and
supervision of the Department Head, the Administrator shall have among others, the
following powers and duties:

xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila
International Airport and all government-owned aerodromes except those controlled or
operated by the Armed Forces of the Philippines including such powers and duties as: (a)
to plan, design, construct, equip, expand, improve, repair or alter aerodromes or such
structures, improvement or air navigation facilities; (b) to enter into, make and execute
contracts of any kind with any person, firm, or public or private corporation or entity; ... .

(25) To determine, fix, impose, collect and receive landing fees, parking space fees,
royalties on sales or deliveries, direct or indirect, to any aircraft for its use of aviation
gasoline, oil and lubricants, spare parts, accessories and supplies, tools, other royalties,
fees or rentals for the use of any of the property under its management and control.

xxx xxx xxx

From the foregoing, it 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:

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 xxx xxx xxx

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. (59
C.J., 313) [National Airport Corporation v. Teodoro, supra, pp. 206-207;
Emphasis supplied.]

This doctrine has been reaffirmed in the recent case of Malong v. Philippine National Railways [G.R. No.
L-49930, August 7, 1985, 138 SCRA 631, where it was held that the Philippine National Railways,
although owned and operated by the government, was not immune from suit as it does not exercise
sovereign but purely proprietary and business functions. Accordingly, as the CAA was created to
undertake the management of airport operations which primarily involve proprietary functions, it cannot
avail of the immunity from suit accorded to government agencies performing strictly governmental
functions.

SUIT AGAINST PUBLIC OFFICERS

SANDERS VS. VERIDIANO

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

ISSUE:
1) Were the petitioners acting officially or only in their private capacities when they did the acts
for which the private respondents sued them for damages?
2) Does the court have jurisdiction over the case?

HELD:

It is abundantly clear in the present case that the acts for which the petitioner are being called to account
were performed by them in the discharge of their official duties. Given the official character of the letters,
the petioners were, legally speaking, being sued as officers of the United States government. As such, the
complaint cannot prosper unless the government sought to be held ultimately liable has given its consent
to be sued. The private respondents must pursue their claim against the petitioners in accordance with the
laws of the Unites States of which they are all citizens and under whose jurisdiction the alleged offenses
were committed for the Philippine courts have no jurisdiction over the case.

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SHAUF VS. COURT OF APPEALS

FACTS:

• 1990: Petitioner, Loida Shauf, a Filipino by origin and married to an American who is a member of the
US Air Force, was rejected for a position of Guidance Counselor in the Base Education Office at Clark
Air Base. She boasts of related working experience and being a qualified dependent locally available.
• By reason of her non-selection, she filed a complaint for damages and an equal employment opportunity
complaint against private respondents, Don Detwiler (civillian personnel officer) and Anthony Persi
(Education Director), for alleged discrimination by reason of her sex (female), color (brown) and national
origin (Filipino by birth).
• Shauf was offered a temporary position as a temporary Assistant Education Adviser for a 180-day
period with the condition that if a vacancy occurs, she will be automatically selected to fill the vacancy.
But if no vacancy occurs after 180 days, she will be released but will be selected to fill a future vacancy if
she’s available. Shauf accepted the offer. During that time, Mrs. Mary Abalateo’s was about to vacate her
position. But Mrs. Abalateo’s appointment was extended thus, Shauf was never appointed to said
position. She claims that the Abalateo’s stay was extended indefinitely to deny her the appointment as
retaliation for the complaint that she filed against Persi. Persi denies this allegation. He claims it was a
joint decision of the management & it was in accordance of with the applicable regulation.
• Shauf filed for damages and other relief in different venues such as the Civil Service Commission,
Appeals Review Board, Philippine Regional Trial Court, etc.
• RTC ruled in favor of Shauf ordering defendants to pay $39,662.49 as actual damages + 20% of such
amount as attorney’s fees + P100k as moral & exemplary damages.
• Both parties appealed to the CA. Shauf prayed for the increase of the damages to be collected from
defendants. Defendants on the other hand, continued using the defense that they are immune from suit for
acts done/statements made by them in performance of their official governmental functions pursuant to
RP-US Military Bases Agreement of 1947. They claim that the Philippines does not have jurisdiction over
the case because it was under the exclusive jurisdiction of a US District Court. They likewise claim that
petitioner failed to exhaust all administrative remedies thus case should be dismissed. CA reversed RTC
decision. According to the CA, defendants are immune from suit.
• Shauf claims that the respondents are being sued in their private capacity thus this is not a suit against
the US government w/c would require consent.
• Respondents still maintain their immunity from suit. They further claim that the rule allowing suits
against public officers & employees for criminal & unauthorized acts is applicable only in the Philippines
& is not part of international law.

ISSUE:

WON private respondents are immune from suit being officers of the US Armed Forces

HELD:

Respondents ordered, jointly and severally, to pay petitioners the sum of P100K as moral damages, P20K
for atty’s fees.

RATIO:

No, the respondents cannot rely on the US blanket of diplomatic immunity for all its acts or the acts of its
agents in the Phils. Private respondents are personally liable in indemnifying petitioner Shauf.

While the doctrine of immunity is also applicable to complaints filed against state officials, it only
contemplates acts done in their official capacity. This does not cover acts contrary to law & injurious to
the rights of the plaintiff. When an official acts in a manner that invades or violates the personal &
property rights of another, the aggrieved party may sue the official & such suit will not be a suit against
the state. (Director of the Bureau of Telecommunications vs. Aligaen) The doctrine of immunity from suit
will not apply where the public official is being sued in his private & personal capacity as an ordinary
citizen.

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The discrimination is very evident. Shauf was not considered for the position even if she was previously
employed as a Guidance Counselor at the Clark Airbase. She was not granted an interview. The person
appointed was not even qualified for that position and that person kept the position despite orders from
the US Civil Service Commission for his removal. Extension of Abalateo’s services is another proof. She
was not appointed even if US officials found her highly qualified for the position (letters from the
Director of the US Civil Service Commission, Staff Judge Advocate of the Department of Air Force).
Shauf has proven that discrimination did occur whereas respondents merely denied allegations.

The US Constitution assures everyone of equality in employment & work opportunities regardless of sex,
race, or creed. The Philippine Constitution has a similar provision. Persi & Detwiler violated Shauf’s
constitutional right to earn a living, an integral aspect of her right to life. Thus, they should be
accountable. Though Shauf is entitled to damages, she should not be paid for the supposedly unearned
income had she been hired as a Guidance Counselor. She never acquired rights over that amount because
she was never appointed.

Shauf followed the proper procedure in seeking relief for the defendants’ discriminatory acts. The
Department of Air Force in Washington told her that one of her appeal rights would be to file a civil
action if a final decision has not been rendered after 180 days from the dated of the initial appeal to the
Commission. The appeal was lodged on Sept. 30, 1978 and it has not been decided up to the time SC has
decided. Shauf is entitled to choose the remedy, not otherwise prohibited, which will best advance &
protect her interests.
Republic vs. Sandoval 220 SCRA 124

Facts:
Farmer-rallyists marched to Malacanang calling for a genuine land reform program. There was a
marchers-police confrontation which resulted in the death of 12 rallyists and scores were wounded. As a
result, then Pres. Aquino issued AO 11 creating the Citizens Mendiola Commission for the purpose of
conducting an investigation. The most significant recommendation of the Commission was for the heirs of
the deceased and wounded victims to be compensated by the government. Based on such
recommendation, the victims of Mendiola massacre filed an action for damages against the Republic and
the military/police officers involved in the incident.

Issues:
(1) Whether or not there is a valid waiver of immunity
(2) Whether or not the State is liable for damages

Held:
The Court held that there was no valid waiver of immunity as claimed by the petitioners. The
recommendation made by the Commission to indemnify the heirs of the deceased and the victims does
not in any way mean that liability attaches to the State. AO 11 merely states the purpose of the creation of
the Commission and, therefore, whatever is the finding of the Commission only serves as the basis for a
cause of action in the event any party decides to litigate the same. Thus, the recommendation of the
Commission does not in any way bind the State.

The State cannot be made liable because the military/police officers who allegedly were responsible for
the death and injuries suffered by the marchers acted beyond the scope of their authority. It is a settled
rule that the State as a person can commit no wrong. The military and police officers who were
responsible for the atrocities can be held personally liable for damages as they exceeded their authority,
hence, the acts cannot be considered official.

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