Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No.

L-46930 June 10, 1988 DALE SANDERS, AND A.S. MOREAU, JR, petitioners, vs. HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First Instance of Zambales, Olongapo City, ANTHONY M. ROSSI and RALPH L. WYERS, respondents.

CRUZ, J.: The basic issue to be resolved in this case is whether or not the petitioners were performing their official duties when they did the acts for which they have been sued for damages by the private respondents. Once this question is decided, the other answers will fall into place and this petition need not detain us any longer than it already has. Petitioner Sanders was, at the time the incident in question occurred, the special services director of the U.S. Naval Station (NAVSTA) in Olongapo City. 1 Petitioner Moreau was the commanding officer of the Subic Naval Base, which includes the said station. 2 Private respondent Rossi is an American citizen with permanent residence in the Philippines, 3 as so was private respondent Wyer, who died two years ago. 4 They were both employed as gameroom attendants in the special services department of the NAVSTA, the former having been hired in 1971 and the latter in 1969.

On October 3, 1975, the private respondents were advised that their employment had been converted from permanent full-time to permanent part-time, effective October 18, 1975. 6 Their reaction was to protest this conversion and to institute grievance proceedings conformably to the pertinent rules and regulations of the U.S. Department of Defense. The result was a recommendation from the hearing officer who conducted the proceedings for the reinstatement of the private respondents to permanent full-time status plus backwages. The report on the hearing contained the observation that "Special Services management practices an autocratic form of supervision." 7

In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the complaint), Sanders disagreed with the hearing officer's report and asked for the rejection of the abovestated recommendation. The letter contained the statements that: a ) "Mr. Rossi tends to alienate most coworkers and supervisors;" b) "Messrs. Rossi and Wyers have proven, according to their immediate supervisors, to be difficult employees to supervise;" and c) "even though the grievants were under oath not to discuss the case with anyone, (they) placed the records in public places where others not involved in the case could hear." On November 7, 1975, before the start of the grievance hearings, a-letter (Annex "B" of the complaint) purportedly corning from petitioner Moreau as the commanding general of the U.S. Naval Station in Subic Bay was sent to the Chief of Naval Personnel explaining the change of the private respondent's employment status and requesting concurrence therewith. The letter did not carry his signature but was signed by W.B. Moore, Jr. "by direction," presumably of Moreau. On the basis of these antecedent facts, the private respondent filed in the Court of First Instance of Olongapo City a for damages against the herein petitioners on November 8, 1976. 8 The plaintiffs claimed that the letters contained libelous imputations that had exposed them to ridicule and caused them mental anguish and that the prejudgment of the grievance proceedings was an invasion of their personal and proprietary rights. The private respondents made it clear that the petitioners were being sued in their private or personal capacity. However, in a motion to dismiss filed under a special appearance, the petitioners argued that the acts complained of were performed by them in the discharge of their official duties and that, consequently, the court had no jurisdiction over them under the doctrine of state immunity. After extensive written arguments between the parties, the motion was denied in an order dated March 8, 1977, 9on the main ground that the petitioners had not presented any evidence that their acts were official in nature and not personal torts, moreover, the allegation in the complaint was that the defendants had acted maliciously and in bad faith. The same order issued a writ of preliminary attachment, conditioned upon the filing of a P10,000.00 bond by the plaintiffs, against the properties of petitioner Moreau, who allegedly was then about to leave the Philippines. Subsequently, to make matters worse for the defendants, petitioner Moreau was declared in a default by the trial court in its order dated August 9, 1977. The motion to lift the default order on the ground that Moreau's failure to appear at the pre-trial conference was the result of some misunderstanding,

and the motion for reconsideration of the denial of the motion to dismiss, which was filed by the petitioner's new lawyers, were denied by the respondent court on September 7, 1977. This petition for certiorari, prohibition and preliminary injunction was thereafter filed before this Court, on the contention that the above-narrated acts of the respondent court are tainted with grave abuse of discretion amounting to lack of jurisdiction. We return now to the basic question of whether the petitioners were acting officially or only in their private capacities when they did the acts for which the private respondents have sued them for damages. It is stressed at the outset that the mere allegation that a government functionary is being sued in his personal capacity will not automatically remove him from the protection of the law of public officers and, if appropriate, the doctrine of state immunity. By the same token, the mere invocation of official character will not suffice to insulate him from suability and liability for an act imputed to him as a personal tort committed without or in excess of his authority. These well-settled principles are applicable not only to the officers of the local state but also where the person sued in its courts pertains to the government of a foreign state, as in the present case. The respondent judge, apparently finding that the complained acts were prima facie personal and tortious, decided to proceed to trial to determine inter alia their precise character on the strength of the evidence to be submitted by the parties. The petitioners have objected, arguing that no such evidence was needed to substantiate their claim of jurisdictional immunity. Pending resolution of this question, we issued a temporary restraining order on September 26, 1977, that has since then suspended the proceedings in this case in the courta quo. In past cases, this Court has held that where the character of the act complained of can be determined from the pleadings exchanged between the parties before the trial, it is not necessary for the court to require them to belabor the point at a trial still to be conducted. Such a proceeding would be superfluous, not to say unfair to the defendant who is subjected to unnecessary and avoidable inconvenience. Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint against the commanding general of the Olongapo Naval Base should not have been denied because it had been sufficiently shown that the act for which he was being sued was done in his official capacity on behalf of the American government. The United States had not given its consent to be sued. It was the reverse situation in Syquia v. Almeda Lopez," where we

sustained the order of the lower court granting a where we motion to dismiss a complaint against certain officers of the U.S. armed forces also shown to be acting officially in the name of the American government. The United States had also not waived its immunity from suit. Only three years ago, in United States of America v. Ruiz, 12 we set aside the denial by the lower court of a motion to dismiss a complaint for damages filed against the United States and several of its officials, it appearing that the act complained of was governmental rather than proprietary, and certainly not personal. In these and several other cases 13 the Court found it redundant to prolong the other case proceedings after it had become clear that the suit could not prosper because the acts complained of were covered by the doctrine of state immunity. It is abundantly clear in the present case that the acts for which the petitioners are being called to account were performed by them in the discharge of their official duties. Sanders, as director of the special services department of NAVSTA, undoubtedly had supervision over its personnel, including the private respondents, and had a hand in their employment, work assignments, discipline, dismissal and other related matters. It is not disputed that the letter he had written was in fact a reply to a request from his superior, the other petitioner, for more information regarding the case of the private respondents. 14 Moreover, even in the absence of such request, he still was within his rights in reacting to the hearing officer's criticismin effect a direct attack against him-that Special Services was practicing "an autocratic form of supervision." As for Moreau,what he is claimed to have done was write the Chief of Naval Personnel for concurrence with the conversion of the private respondents' type of employment even before the grievance proceedings had even commenced. Disregarding for the nonce the question of its timeliness, this act is clearly official in nature, performed by Moreau as the immediate superior of Sanders and directly answerable to Naval Personnel in matters involving the special services department of NAVSTA In fact, the letter dealt with the financial and budgetary problems of the department and contained recommendations for their solution, including the re-designation of the private respondents. There was nothing personal or private about it. Given the official character of the above-described letters, we have to conclude that the petitioners were, legally speaking, being sued as officers of the United States government. As they have acted on behalf of that government, and within the scope of their authority, it is that government, and not the petitioners personally, that is responsible for their acts. Assuming that the trial can proceed and it is proved that the claimants have a right to the payment of damages, such award will have to be satisfied not

by the petitioners in their personal capacities but by the United States government as their principal. This will require that government to perform an affirmative act to satisfy the judgment, viz, the appropriation of the necessary amount to cover the damages awarded, thus making the action a suit against that government without its consent. There should be no question by now that such complaint cannot prosper unless the government sought to be held ultimately liable has given its consent to' be sued. So we have ruled not only in Baer but in many other decisions where we upheld the doctrine of state immunity as applicable not only to our own government but also to foreign states sought to be subjected to the jurisdiction of our courts. 15 The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right against the authority which makes the law on which the right depends. 16 In the case of foreign states, the rule is derived from the principle of the sovereign equality of states which wisely admonishes that par in parem non habet imperium and that a contrary attitude would "unduly vex the peace of nations." 17 Our adherence to this precept is formally expressed in Article II, Section 2, of our Constitution, where we reiterate from our previous charters that the Philippines "adopts the generally accepted principles of international law as part of the law of the land. All this is not to say that in no case may a public officer be sued as such without the previous consent of the state. To be sure, there are a number of well-recognized exceptions. It is clear that a public officer may be sued as such to compel him to do an act required by law, as where, say, a register of deeds refuses to record a deed of sale; 18or to restrain a Cabinet member, for example, from enforcing a law claimed to be unconstitutional; 19 or to compel the national treasurer to pay damages from an already appropriated assurance fund; 20 or the commissioner of internal revenue to refund tax over-payments from a fund already available for the purpose; 21 or, in general, to secure a judgment that the officer impleaded may satisfy by himself without the government itself having to do a positive act to assist him. We have also held that where the government itself has violated its own laws, the aggrieved party may directly implead the government even without first filing his claim with the Commission on Audit as normally required, as the doctrine of state immunity "cannot be used as an instrument for perpetrating an injustice." 22 This case must also be distinguished from such decisions as Festejo v. Fernando, 23 where the Court held that a bureau director could be sued for damages on a personal tort committed by him when he acted without or in

excess of authority in forcibly taking private property without paying just compensation therefor although he did convert it into a public irrigation canal. It was not necessary to secure the previous consent of the state, nor could it be validly impleaded as a party defendant, as it was not responsible for the defendant's unauthorized act. The case at bar, to repeat, comes under the rule and not under any of the recognized exceptions. The government of the United States has not given its consent to be sued for the official acts of the petitioners, who cannot satisfy any judgment that may be rendered against them. As it is the American government itself that will have to perform the affirmative act of appropriating the amount that may be adjudged for the private respondents, the complaint must be dismissed for lack of jurisdiction. The Court finds that, even under the law of public officers, the acts of the petitioners are protected by the presumption of good faith, which has not been overturned by the private respondents. Even mistakes concededly committed by such public officers are not actionable as long as it is not shown that they were motivated by malice or gross negligence amounting to bad faith. 24 This, to, is well settled . 25 Furthermore, applying now our own penal laws, the letters come under the concept of privileged communications and are not punishable, 26 let alone the fact that the resented remarks are not defamatory by our standards. It seems the private respondents have overstated their case. A final consideration is that since the questioned acts were done in the Olongapo Naval Base by the petitioners in the performance of their official duties and the private respondents are themselves American citizens, it would seem only proper for the courts of this country to refrain from taking cognizance of this matter and to treat it as coming under the internal administration of the said base. The petitioners' counsel have submitted a memorandum replete with citations of American cases, as if they were arguing before a court of the United States. The Court is bemused by such attitude. While these decisions do have persuasive effect upon us, they can at best be invoked only to support our own jurisprudence, which we have developed and enriched on the basis of our own persuasions as a people, particularly since we became independent in 1946. We appreciate the assistance foreign decisions offer us, and not only from the United States but also from Spain and other countries from which we have derived some if not most of our own laws. But we should not place undue and fawning reliance upon them and regard them as indispensable

mental crutches without which we cannot come to our own decisions through the employment of our own endowments We live in a different ambience and must decide our own problems in the light of our own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own concept of law and justice. The private respondents must, if they are still sominded, pursue their claim against the petitioners in accordance with the laws of the United States, of which they are all citizens and under whose jurisdiction the alleged offenses were committed. Even assuming that our own laws are applicable, the United States government has not decided to give its consent to be sued in our courts, which therefore has not acquired the competence to act on the said claim,. WHEREFORE, the petition is GRANTED. The challenged orders dated March 8,1977, August 9,1977, and September 7, 1977, are SET ASIDE. The respondent court is directed to DISMISS Civil Case No. 2077-O. Our Temporary restraining order of September 26,1977, is made PERMANENT. No costs. SO ORDERED. Narvasa, Gancayco, Grino-Aquio and Medialdea, JJ., Concur.

Footnotes 1 Rollo, pp. 2, 26. 2 Ibid. 3 Id. 4 Id., p. 319. 5 Id., pp. 4, 27, 91. 6 Id., pp. 5, 91. 7 Id., p. 5, 28, 91. 8 Id., pp- 26-34. 9 Id., pp- 90-94.

10 57 SCRA 1. 11 84 Phil. 312. 12 136 SCRA 487. 13 Lim v. Brownell, et al., 107 Phil. 344; Parreo v. McGranery, 92 Phil. 791; Lim v. Nelson, 87 Phil. 328; Marvel Building Corp. v. Philippine War Damage Commission, 85 Phil. 27. 14 Rollo, pp. 35-40. 15 Syquia v. Almeda Lopez, supra; Marvel Building Corp. v. Philippine War Damage Commission,supra; Lim v. Nelson, supra; Philippine Alien Property Administration v. Castelo, 89 Phil. 568; Parreo v. McGranery, supra; Johnson v. Turner, 94 Phil. 807-all cited in Baer case; United States of America v. Ruiz, supra. 16 Kawanakoa v. Polybank, 205 U.S. 349. 17 De Haber v. Queen of Portugal, 17 QB 171. 18 Krivenko v. Register of Deeds, 79 Phil. 461. 19 Javellana v. Executive Secretary, 50 SCRA 30: Ichong v. Hernandez, 101 Phil. 1155. 20 Treasurer of the Philippines v. Court of Appeals, G.R. No. L42805, August 31, 1987. 21 National Development Company v. Commissioner of Internal Revenue, 151 SCRA 472. 22 Amigable v. Cuenca, 43 SCRA 360, reiterating Ministerio v. Court of First Instance of Cebu, 40 SCRA 464. 23 50 O.G. 1556. 24 Philippine Racing Club, Inc., et al. v. Bonifacio, et al., 109 Phil. 233. 25 Cabungcal, et al. v. Cordova, et al., 11 SCRA 584, cited in Mabutol v. Pascual, 124 SCRA 867; Mindanao Realty Corp. v. Kintanar, 6 SCRA 814; U.S. v. Santos, 36 Phil. 853. 2'

26 Art. 354, par. 1, Revised Penal Code; see also U.S. v. Bustos, 37 Phil. 731; and Deano v. Godinez, 12 SCRA 843.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-20213 January 31, 1966

MARIANO E. GARCIA, plaintiff-appellant, vs.

THE CHIEF OF STAFF and THE ADJUTANT GENERAL, ARMED FORCES OF THE PHILIPPINES and/or THE CHAIRMAN, PHILIPPINE VETERANS BOARD and/or THE AUDITOR GENERAL OF THE PHILIPPINES,defendants-appellees. Tiangco and Millosa for the plaintiff-appellant. Office of the Solicitor General for the defendants-appellees. REGALA, J.: This is an appeal from an order of dismissal. It appears that on December 1, 1961, the plaintiff-appellant, Mariano E. Garcia, filed with the Court of First Instance of Pangasinan an action to collect a sum of money against the Chief of Staff and the Adjutant General of the Armed Forces of the Philippines, the Chairman of the Philippine Veterans Board and /or the Auditor General. The complaint alleged: that sometime in July, 1948, the plaintiff suffered injuries while undergoing the 10-month military training at Camp Floridablanca, Pampanga; that sometime thereafter he filed his claim under Commonwealth Act 400 and in April, 1957, he submitted some papers in support of his claim to the Adjutant General's Office upon the latter's request; that on May 2, 1957, he received a letter from the said Adjutant General's Office disallowing his claim for disability benefits; that on November 24, 1958, after further demands of the plaintiff, the Adjutant General's Office denied the said claim, alleging that Commonwealth Act 400 had already been repealed by Republic Act 610 which took effect on January 1, 1950; that by reason of the injuries suffered by plaintiff he was deprived of his sight or vision rendering him permanently disabled; and that by reason of the unjustified refusal by defendants of plaintiff's claim, the latter was deprived of his disability pension from July, 1948 totalling no less than P4,000 at the rate of P20 a month and suffered thereby moral damages and attorney's fees the amount of P2,000.00. The Philippine Veterans Administration and the Chief of Staff of the Armed Forces filed separate motions to dismiss the complaint on the grounds that the court has no jurisdiction over the subject matter of the complaint; that the plaintiff failed to exhaust all administrative remedies before coming to court; that the complaint states no cause of action; and that the cause of action is barred by the statute of limitations.1wph1.t Acting on the said motion, the court, on March 2, 1962, rendered an order dismissing the complaint on the ground that the action has prescribed.

Motion for reconsideration of the said order having been denied, the plaintiff has interposed this appeal. Without need of discussing the various questions raised, We have to uphold the order of dismissal, not necessarily on the same ground as found by the lower court; but for the simple reason that the Court of First Instance has no jurisdiction over the subject matter, it being a money claim against the government. This Court has already held (New Manila Lumber Co. Inc. vs. Republic, G.R. No. L-14248, April 28, 1960) that a claim for the recovery of money against the government should be filed with the Auditor General, in line with the principle that the State cannot be sued without its consent. Commonwealth Act 327 provides: SECTION 1. In all cases involving the settlement of accounts or claims, other than those of accountable officers, the Auditor General shall act and decide the same within sixty days, exclusive of Sundays and holidays, after their presentation. . . . SEC. 2. The party aggrieved by the final decision of the Auditor General in the settlement of an account or claim may, within thirty days from receipt of the decision, take an appeal in writing: xxx xxx x x x.

(c) To the Supreme Court of the Philippines, if the appellant is a private person or entity. The well established rule that no recourse to court can be had until all administrative remedies had been exhausted and that actions against administrative officers should not be entertained if superior administrative officers could grant relief is squarely applicable to the present case. In view therefor, the order dismissing the complaint is hereby affirmed, without pronouncement as to costs. Bengzon, C.J., Bautista Angelo, Concepcion, Reyes J.B.L., Barrera, Dizon, Bengzon, J.P., and Zaldivar, JJ., concur. Makalintal, J., took no part. Republic of the Philippines SUPREME COURT Manila

EN BANC G.R. No. 76607 February 26, 1990 UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE REEVES, petitioners, vs. HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial Court, Angeles City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO C. DEL PILAR, respondents. G.R. No. 79470 February 26, 1990 UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF, WILFREDO BELSA, PETER ORASCION AND ROSE CARTALLA, petitioners, vs. HON. RODOLFO D. RODRIGO, as Presiding Judge of Branch 7, Regional Trial Court (BAGUIO CITY), La Trinidad, Benguet and FABIAN GENOVE, respondents. G.R. No. 80018 February 26, 1990 UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F. BOSTICK, petitioners, vs. HON. JOSEFINA D. CEBALLOS, As Presiding Judge, Regional Trial Court, Branch 66, Capas, Tarlac, and LUIS BAUTISTA, respondents. G.R. No. 80258 February 26, 1990 UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC ERNEST E. RIVENBURGH, AIC ROBIN BLEVINS, SGT. NOEL A. GONZALES, SGT. THOMAS MITCHELL, SGT. WAYNE L. BENJAMIN, ET AL.,petitioners, vs. HON. CONCEPCION S. ALARCON VERGARA, as Presiding Judge, Branch 62 REGIONAL TRIAL COURT, Angeles City, and RICKY SANCHEZ, FREDDIE SANCHEZ AKA FREDDIE RIVERA, EDWIN MARIANO, AKA JESSIE DOLORES SANGALANG, ET AL., respondents. Luna, Sison & Manas Law Office for petitioners.

CRUZ, J.: These cases have been consolidated because they all involve the doctrine of state immunity. The United States of America was not impleaded in the complaints below but has moved to dismiss on the ground that they are in effect suits against it to which it has not consented. It is now contesting the denial of its motions by the respondent judges. In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force stationed in Clark Air Base in connection with the bidding conducted by them for contracts for barber services in the said base. On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S. Air Force, solicited bids for such contracts through its contracting officer, James F. Shaw. Among those who submitted their bids were private respondents Roberto T. Valencia, Emerenciana C. Tanglao, and Pablo C. del Pilar. Valencia had been a concessionaire inside Clark for 34 years; del Pilar for 12 years; and Tanglao for 50 years. The bidding was won by Ramon Dizon, over the objection of the private respondents, who claimed that he had made a bid for four facilities, including the Civil Engineering Area, which was not included in the invitation to bid. The private respondents complained to the Philippine Area Exchange (PHAX). The latter, through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse explained that the Civil Engineering concession had not been awarded to Dizon as a result of the February 24, 1986 solicitation. Dizon was already operating this concession, then known as the NCO club concession, and the expiration of the contract had been extended from June 30, 1986 to August 31, 1986. They further explained that the solicitation of the CE barbershop would be available only by the end of June and the private respondents would be notified. On June 30, 1986, the private respondents filed a complaint in the court below to compel PHAX and the individual petitioners to cancel the award to defendant Dizon, to conduct a rebidding for the barbershop concessions and to allow the private respondents by a writ of preliminary injunction to continue operating the concessions pending litigation. 1

Upon the filing of the complaint, the respondent court issued an ex parte order directing the individual petitioners to maintain the status quo. On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for preliminary injunction on the ground that the action was in effect a suit against the United States of America, which had not waived its non-suability. The individual defendants, as official employees of the U.S. Air Force, were also immune from suit. On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary injunction. On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part as follows: From the pleadings thus far presented to this Court by the parties, the Court's attention is called by the relationship between the plaintiffs as well as the defendants, including the US Government, in that prior to the bidding or solicitation in question, there was a binding contract between the plaintiffs as well as the defendants, including the US Government. By virtue of said contract of concession it is the Court's understanding that neither the US Government nor the herein principal defendants would become the employer/s of the plaintiffs but that the latter are the employers themselves of the barbers, etc. with the employer, the plaintiffs herein, remitting the stipulated percentage of commissions to the Philippine Area Exchange. The same circumstance would become in effect when the Philippine Area Exchange opened for bidding or solicitation the questioned barber shop concessions. To this extent, therefore, indeed a commercial transaction has been entered, and for purposes of the said solicitation, would necessarily be entered between the plaintiffs as well as the defendants. The Court, further, is of the view that Article XVIII of the RP-US Bases Agreement does not cover such kind of services falling under the concessionaireship, such as a barber shop concession. 2 On December 11, 1986, following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we issued

a temporary restraining order against further proceedings in the court below. 3 In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony Lamachia, Wilfredo Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the U.S. Air Force Recreation Center at the John Hay Air Station in Baguio City. It had been ascertained after investigation, from the testimony of Belsa Cartalla and Orascion, that Genove had poured urine into the soup stock used in cooking the vegetables served to the club customers. Lamachia, as club manager, suspended him and thereafter referred the case to a board of arbitrators conformably to the collective bargaining agreement between the Center and its employees. The board unanimously found him guilty and recommended his dismissal. This was effected on March 5, 1986, by Col. David C. Kimball, Commander of the 3rd Combat Support Group, PACAF Clark Air Force Base. Genove's reaction was to file Ms complaint in the Regional Trial Court of Baguio City against the individual petitioners. 4 On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss the complaint, alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay Air Station, was immune from suit for the acts done by him in his official capacity. They argued that the suit was in effect against the United States, which had not given its consent to be sued. This motion was denied by the respondent judge on June 4, 1987, in an order which read in part: It is the understanding of the Court, based on the allegations of the complaint which have been hypothetically admitted by defendants upon the filing of their motion to dismiss that although defendants acted initially in their official capacities, their going beyond what their functions called for brought them out of the protective mantle of whatever immunities they may have had in the beginning. Thus, the allegation that the acts complained of were illegal, done. with extreme bad faith and with pre-conceived sinister plan to harass and finally dismiss the plaintiff, gains significance. 5 The petitioners then came to this Court seeking certiorari and prohibition with preliminary injunction.

In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O' Donnell, an extension of Clark Air Base, was arrested following a buy-bust operation conducted by the individual petitioners herein, namely, Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S. Air Force and special agents of the Air Force Office of Special Investigators (AFOSI). On the basis of the sworn statements made by them, an information for violation of R.A. 6425, otherwise known as the Dangerous Drugs Act, was filed against Bautista in the Regional Trial Court of Tarlac. The above-named officers testified against him at his trial. As a result of the filing of the charge, Bautista was dismissed from his employment. He then filed a complaint for damages against the individual petitioners herein claiming that it was because of their acts that he was removed. 6 During the period for filing of the answer, Mariano Y. Navarro a special counsel assigned to the International Law Division, Office of the Staff Judge Advocate of Clark Air Base, entered a special appearance for the defendants and moved for an extension within which to file an "answer and/or other pleadings." His reason was that the Attorney General of the United States had not yet designated counsel to represent the defendants, who were being sued for their official acts. Within the extended period, the defendants, without the assistance of counsel or authority from the U.S. Department of Justice, filed their answer. They alleged therein as affirmative defenses that they had only done their duty in the enforcement of the laws of the Philippines inside the American bases pursuant to the RP-US Military Bases Agreement. On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the defendants, filed with leave of court a motion to withdraw the answer and dismiss the complaint. The ground invoked was that the defendants were acting in their official capacity when they did the acts complained of and that the complaint against them was in effect a suit against the United States without its consent. The motion was denied by the respondent judge in his order dated September 11, 1987, which held that the claimed immunity under the Military Bases Agreement covered only criminal and not civil cases. Moreover, the defendants had come under the jurisdiction of the court when they submitted their answer. 7

Following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we issued on October 14, 1987, a temporary restraining order. 8 In G.R. No. 80258, a complaint for damages was filed by the private respondents against the herein petitioners (except the United States of America), for injuries allegedly sustained by the plaintiffs as a result of the acts of the defendants. 9 There is a conflict of factual allegations here. According to the plaintiffs, the defendants beat them up, handcuffed them and unleashed dogs on them which bit them in several parts of their bodies and caused extensive injuries to them. The defendants deny this and claim the plaintiffs were arrested for theft and were bitten by the dogs because they were struggling and resisting arrest, The defendants stress that the dogs were called off and the plaintiffs were immediately taken to the medical center for treatment of their wounds. In a motion to dismiss the complaint, the United States of America and the individually named defendants argued that the suit was in effect a suit against the United States, which had not given its consent to be sued. The defendants were also immune from suit under the RP-US Bases Treaty for acts done by them in the performance of their official functions. The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading in part as follows: The defendants certainly cannot correctly argue that they are immune from suit. The allegations, of the complaint which is sought to be dismissed, had to be hypothetically admitted and whatever ground the defendants may have, had to be ventilated during the trial of the case on the merits. The complaint alleged criminal acts against the individually-named defendants and from the nature of said acts it could not be said that they are Acts of State, for which immunity should be invoked. If the Filipinos themselves are duty bound to respect, obey and submit themselves to the laws of the country, with more reason, the members of the United States Armed Forces who are being treated as guests of this country should respect, obey and submit themselves to its laws. 10 and so was the motion for reconsideration. The defendants submitted their answer as required but subsequently filed their

petition for certiorari and prohibition with preliminary injunction with this Court. We issued a temporary restraining order on October 27, 1987. 11 II The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987 Constitution, is one of the generally accepted principles of international law that we have adopted as part of the law of our land under Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and also intended to manifest our resolve to abide by the rules of the international community. Even without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation. Under this doctrine, as accepted by the majority of states, such principles are deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the society of nations. Upon its admission to such society, the state is automatically obligated to comply with these principles in its relations with other states. As applied to the local state, the doctrine of state immunity is based on the justification given by Justice Holmes that "there can be no legal right against the authority which makes the law on which the right depends." 12 There are other practical reasons for the enforcement of the doctrine. In the case of the foreign state sought to be impleaded in the local jurisdiction, the added inhibition is expressed in the maxim par in parem, non habet imperium. All states are sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would, in the language of a celebrated case, "unduly vex the peace of nations." 13 While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the suit must be regarded as against the state itself although it has not been formally impleaded. 14 In such a situation, the state may move to

dismiss the complaint on the ground that it has been filed without its consent. The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the privilege it grants the state to defeat any legitimate claim against it by simply invoking its non-suability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does not say the state may not be sued under any circumstance. On the contrary, the rule says that the state may not be sued without its consent, which clearly imports that it may be sued if it consents. The consent of the state to be sued may be manifested expressly or impliedly. Express consent may be embodied in a general law or a special law. Consent is implied when the state enters into a contract or it itself commences litigation. The general law waiving the immunity of the state from suit is found in Act No. 3083, under which the Philippine government "consents and submits to be sued upon any moneyed claim involving liability arising from contract, express or implied, which could serve as a basis of civil action between private parties." In Merritt v. Government of the Philippine Islands, 15 a special law was passed to enable a person to sue the government for an alleged tort. When the government enters into a contract, it is deemed to have descended to the level of the other contracting party and divested of its sovereign immunity from suit with its implied consent. 16 Waiver is also implied when the government files a complaint, thus opening itself to a counterclaim. 17 The above rules are subject to qualification. Express consent is effected only by the will of the legislature through the medium of a duly enacted statute. 18 We have held that not all contracts entered into by the government will operate as a waiver of its non-suability; distinction must be made between its sovereign and proprietary acts. 19 As for the filing of a complaint by the government, suability will result only where the government is claiming affirmative relief from the defendant. 20 In the case of the United States of America, the customary rule of international law on state immunity is expressed with more specificity in the RP-US Bases Treaty. Article III thereof provides as follows:

It is mutually agreed that the United States shall have the rights, power and authority within the bases which are necessary for the establishment, use, operation and defense thereof or appropriate for the control thereof and all the rights, power and authority within the limits of the territorial waters and air space adjacent to, or in the vicinity of, the bases which are necessary to provide access to them or appropriate for their control. The petitioners also rely heavily on Baer v. Tizon, 21 along with several other decisions, to support their position that they are not suable in the cases below, the United States not having waived its sovereign immunity from suit. It is emphasized that in Baer, the Court held: The invocation of the doctrine of immunity from suit of a foreign state without its consent is appropriate. More specifically, insofar as alien armed forces is concerned, the starting point is Raquiza v. Bradford, a 1945 decision. In dismissing a habeas corpus petition for the release of petitioners confined by American army authorities, Justice Hilado speaking for the Court, cited Coleman v. Tennessee, where it was explicitly declared: 'It is well settled that a foreign army, permitted to march through a friendly country or to be stationed in it, by permission of its government or sovereign, is exempt from the civil and criminal jurisdiction of the place.' Two years later, in Tubb and Tedrow v. Griess, this Court relied on the ruling in Raquiza v. Bradford and cited in support thereof excerpts from the works of the following authoritative writers: Vattel, Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair and Lauterpacht. Accuracy demands the clarification that after the conclusion of the PhilippineAmerican Military Bases Agreement, the treaty provisions should control on such matter, the assumption being that there was a manifestation of the submission to jurisdiction on the part of the foreign power whenever appropriate. More to the point is Syquia v. Almeda Lopez, where plaintiffs as lessors sued the Commanding General of the United States Army in the Philippines, seeking the restoration to them of the apartment buildings they owned leased to the United States armed forces stationed in the Manila area. A motion to dismiss on the ground of non-suability was filed and upheld by respondent Judge.

The matter was taken to this Court in a mandamus proceeding. It failed. It was the ruling that respondent Judge acted correctly considering that the 4 action must be considered as one against the U.S. Government. The opinion of Justice Montemayor continued: 'It is clear that the courts of the Philippines including the Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very beginning of the action. The U.S. Government has not given its consent to the filing of this suit which is essentially against her, though not in name. Moreover, this is not only a case of a citizen filing a suit against his own Government without the latter's consent but it is of a citizen firing an action against a foreign government without said government's consent, which renders more obvious the lack of jurisdiction of the courts of his country. The principles of law behind this rule are so elementary and of such general acceptance that we deem it unnecessary to cite authorities in support thereof then came Marvel Building Corporation v. Philippine War Damage Commission, where respondent, a United States Agency established to compensate damages suffered by the Philippines during World War II was held as falling within the above doctrine as the suit against it would eventually be a charge against or financial liability of the United States Government because ... , the Commission has no funds of its own for the purpose of paying money judgments.' The Syquia ruling was again explicitly relied upon in Marquez Lim v. Nelson, involving a complaint for the recovery of a motor launch, plus damages, the special defense interposed being 'that the vessel belonged to the United States Government, that the defendants merely acted as agents of said Government, and that the United States Government is therefore the real party in interest.' So it was in Philippine Alien Property Administration v. Castelo, where it was held that a suit against Alien Property Custodian and the Attorney General of the United States involving vested property under the Trading with the Enemy Act is in substance a suit against the United States. To the same effect is Parreno v. McGranery, as the following excerpt from the opinion of justice Tuazon clearly shows: 'It is a widely accepted principle of international law, which is made a part of the law of the

land (Article II, Section 3 of the Constitution), that a foreign state may not be brought to suit before the courts of another state or its own courts without its consent.' Finally, there is Johnson v. Turner, an appeal by the defendant, then Commanding General, Philippine Command (Air Force, with office at Clark Field) from a decision ordering the return to plaintiff of the confiscated military payment certificates known as scrip money. In reversing the lower court decision, this Tribunal, through Justice Montemayor, relied on Syquia v. Almeda Lopez, explaining why it could not be sustained. It bears stressing at this point that the above observations do not confer on the United States of America a blanket immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that they are also insulated from suit in this country merely because they have acted as agents of the United States in the discharge of their official functions. There is no question that the United States of America, like any other state, will be deemed to have impliedly waived its nonsuability 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. This was our ruling in United States of America v. Ruiz, 22 where the transaction in question dealt with the improvement of the wharves in the naval installation at Subic Bay. As this was a clearly governmental function, we held that the contract did not operate to divest the United States of its sovereign immunity from suit. In the words of Justice Vicente Abad Santos: 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 acts (jure gestionis). 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. xxx xxx xxx 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. The other petitioners in the cases before us all aver they have acted in the discharge of their official functions as officers or agents of the United States. However, this is a matter of evidence. The charges against them may not be summarily dismissed on their mere assertion that their acts are imputable to the United States of America, which has not given its consent to be sued. In fact, the defendants are sought to be held answerable for personal torts in which the United States itself is not involved. If found liable, they and they alone must satisfy the judgment. In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever, appropriated private land and converted it into public irrigation ditches. Sued for the value of the lots invalidly taken by him, he moved to dismiss the complaint on the ground that the suit was in effect against the Philippine government, which had not given its consent to be sued. This Court sustained the denial of the motion and held that the doctrine of state immunity was not applicable. The director was being sued in his private capacity for a personal tort. With these considerations in mind, we now proceed to resolve the cases at hand. III

It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners therein were acting in the exercise of their official functions when they conducted the buy-bust operation against the complainant and thereafter testified against him at his trial. The said petitioners were in fact connected with the Air Force Office of Special Investigators and were charged precisely with the function of preventing the distribution, possession and use of prohibited drugs and prosecuting those guilty of such acts. It cannot for a moment be imagined that they were acting in their private or unofficial capacity when they apprehended and later testified against the complainant. It follows that for discharging their duties as agents of the United States, they cannot be directly impleaded for acts imputable to their principal, which has not given its consent to be sued. As we observed in Sanders v. Veridiano: 24 Given the official character of the above-described letters, we have to conclude that the petitioners were, legally speaking, being sued as officers of the United States government. As they have acted on behalf of that government, and within the scope of their authority, it is that government, and not the petitioners personally, that is responsible for their acts. The private respondent invokes Article 2180 of the Civil Code which holds the government liable if it acts through a special agent. The argument, it would seem, is premised on the ground that since the officers are designated "special agents," the United States government should be liable for their torts. There seems to be a failure to distinguish between suability and liability and a misconception that the two terms are synonymous. 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. The said article establishes a rule of liability, not suability. The government may be held liable under this rule only if it first allows itself to be sued through any of the accepted forms of consent.

Moreover, the agent performing his regular functions is not a special agent even if he is so denominated, as in the case at bar. No less important, the said provision appears to regulate only the relations of the local state with its inhabitants and, hence, applies only to the Philippine government and not to foreign governments impleaded in our courts. We reject the conclusion of the trial court that the answer filed by the special counsel of the Office of the Sheriff Judge Advocate of Clark Air Base was a submission by the United States government to its jurisdiction. As we noted in Republic v. Purisima, 25 express waiver of immunity cannot be made by a mere counsel of the government but must be effected through a duly-enacted statute. Neither does such answer come under the implied forms of consent as earlier discussed. But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the discharge of their official functions, we hesitate to make the same conclusion in G.R. No. 80258. The contradictory factual allegations in this case deserve in our view a closer study of what actually happened to the plaintiffs. The record is too meager to indicate if the defendants were really discharging their official duties or had actually exceeded their authority when the incident in question occurred. Lacking this information, this Court cannot directly decide this case. The needed inquiry must first be made by the lower court so it may assess and resolve the conflicting claims of the parties on the basis of the evidence that has yet to be presented at the trial. Only after it shall have determined in what capacity the petitioners were acting at the time of the incident in question will this Court determine, if still necessary, if the doctrine of state immunity is applicable. In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located at the U.S. Air Force Recreation Center, also known as the Open Mess Complex, at John Hay Air Station. As manager of this complex, petitioner Lamachia is responsible for eleven diversified activities generating an annual income of $2 million. Under his executive management are three service restaurants, a cafeteria, a bakery, a Class VI store, a coffee and pantry shop, a main cashier cage, an administrative office, and a decentralized warehouse which maintains a stock level of $200,000.00 per month in resale items. He supervises 167 employees, one of whom was Genove, with whom the United States government has concluded a collective bargaining agreement.

From these circumstances, the Court can assume that the restaurant services offered at the John Hay Air Station partake of the nature of a business enterprise undertaken by the United States government in its proprietary capacity. Such services are not extended to the American servicemen for free as a perquisite of membership in the Armed Forces of the United States. Neither does it appear that they are exclusively offered to these servicemen; on the contrary, it is well known that they are available to the general public as well, including the tourists in Baguio City, many of whom make it a point to visit John Hay for this reason. All persons availing themselves of this facility pay for the privilege like all other customers as in ordinary restaurants. Although the prices are concededly reasonable and relatively low, such services are undoubtedly operated for profit, as a commercial and not a governmental activity. The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to justify the dismissal of the damage suit against them by Genove. Such defense will not prosper even if it be established that they were acting as agents of the United States when they investigated and later dismissed Genove. For that matter, not even the United States government itself can claim such immunity. The reason is that by entering into the employment contract with Genove in the discharge of its proprietary functions, it impliedly divested itself of its sovereign immunity from suit. But these considerations notwithstanding, we hold that the complaint against the petitioners in the court below must still be dismissed. While suable, the petitioners are nevertheless not liable. It is obvious that the claim for damages cannot be allowed on the strength of the evidence before us, which we have carefully examined. The dismissal of the private respondent was decided upon only after a thorough investigation where it was established beyond doubt that he had polluted the soup stock with urine. The investigation, in fact, did not stop there. Despite the definitive finding of Genove's guilt, the case was still referred to the board of arbitrators provided for in the collective bargaining agreement. This board unanimously affirmed the findings of the investigators and recommended Genove's dismissal. There was nothing arbitrary about the proceedings. The petitioners acted quite properly in terminating the private respondent's employment for his

unbelievably nauseating act. It is surprising that he should still have the temerity to file his complaint for damages after committing his utterly disgusting offense. Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions granted by the United States government are commercial enterprises operated by private person's. They are not agencies of the United States Armed Forces nor are their facilities demandable as a matter of right by the American servicemen. These establishments provide for the grooming needs of their customers and offer not only the basic haircut and shave (as required in most military organizations) but such other amenities as shampoo, massage, manicure and other similar indulgences. And all for a fee. Interestingly, one of the concessionaires, private respondent Valencia, was even sent abroad to improve his tonsorial business, presumably for the benefit of his customers. No less significantly, if not more so, all the barbershop concessionaires are under the terms of their contracts, required to remit to the United States government fixed commissions in consideration of the exclusive concessions granted to them in their respective areas. This being the case, the petitioners cannot plead any immunity from the complaint filed by the private respondents in the court below. The contracts in question being decidedly commercial, the conclusion reached in the United States of America v. Ruiz case cannot be applied here. The Court would have directly resolved the claims against the defendants as we have done in G.R. No. 79470, except for the paucity of the record in the case at hand. The evidence of the alleged irregularity in the grant of the barbershop concessions is not before us. This means that, as in G.R. No. 80258, the respondent court will have to receive that evidence first, so it can later determine on the basis thereof if the plaintiffs are entitled to the relief they seek. Accordingly, this case must also be remanded to the court below for further proceedings. IV There are a number of other cases now pending before us which also involve the question of the immunity of the United States from the jurisdiction of the Philippines. This is cause for regret, indeed, as they mar the traditional friendship between two countries long

allied in the cause of democracy. It is hoped that the so-called "irritants" in their relations will be resolved in a spirit of mutual accommodation and respect, without the inconvenience and asperity of litigation and always with justice to both parties. WHEREFORE, after considering all the above premises, the Court hereby renders judgment as follows: 1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is directed to proceed with the hearing and decision of Civil Case No. 4772. The temporary restraining order dated December 11, 1986, is LIFTED. 2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298) is DISMISSED. 3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is DISMISSED. The temporary restraining order dated October 14, 1987, is made permanent. 4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is directed to proceed with the hearing and decision of Civil Case No. 4996. The temporary restraining order dated October 27, 1987, is LIFTED. All without any pronouncement as to costs. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, GrioAquino, Medialdea and Regalado, JJ., concur.

Footnotes 1 Civil Case No. 4772. 2 Annex "B", Rollo, pp. 36-38. 3 Rollo, p. 88. 4 Civil Case No. 829-R(298).

5 Annex "A", Rollo, p. 38. 6 Civil Case No. 115-C-87. 7 Annex "A," Rollo, p. 33. 8 Rollo, p. 69. 9 Civil Case No. 4996. 10 Annex "A," Rollo, p. 58. 11 Rollo, p. 181. 12 Kawanakoa v. Polybank, 205 U.S. 349. 13 De Haber v. Queen of Portugal, 17 Q.B. 171. 14 Garcia v. Chief of Staff, 16 SCRA 120. 15 4 Phil. 311. 16 Santos v. Santos, 92 Phil. 281; Lyons v. United States of America, 104 Phil. 593. 17 Froilan v. Pan Oriental Shipping Co., G.R. No. 6060, September 30, 1950. 18 Republic v. Purisima, 78 SCRA 470. 19 United States of America v. Ruiz, 136 SCRA 487. 20 Lim v. Brownell, 107 Phil. 345. 21 57 SCRA 1. 22 136 SCRA 487. 23 50 O.G. 1556. 24 162 SCRA 88. 25 Supra. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-36084 August 31, 1977 REPUBLIC OF THE PHILIPPINES, petitioner, vs. HONORABLE AMANTE P. PURISIMA, the Presiding Judge of the court of first Instance of Manila (Branch VII), and YELLOW BALL FREIGHT LINES, INC., respondents. Solicitor General Estelito P. Mendoza, Assistant Solicitor General Santiago M. Kapunan, Solicitor Oscar C. Fernandez and Special Attorney Renato P. Mabugat for petitioner. Jose Q. Calingo for private respondent.

FERNANDO, Acting C.J.: The jurisdictional issued raised by Solicitor General Estelito P. Mendoza on behalf of the Republic of the Philippines in this certiorari and prohibition proceeding arose from the failure of respondent Judge Amante P. Purisima of the Court of First Instance of Manila to apply the well-known and ofreiterated doctrine of the non-suability of a State, including its offices and agencies, from suit without its consent. it was so alleged in a motion to dismiss filed by defendant Rice and Corn Administration in a pending civil suit in the sala of respondent Judge for the collection of a money claim arising from an alleged breach of contract, the plaintiff being private respondent Yellow Ball Freight Lines, Inc. 1 Such a motion to dismiss was filed on September 7, 1972. At that time, the leading case of Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, 2 were Justice Bengzon stressed the lack of jurisdiction of a court to pass on the merits of a claim against any office or entity acting as part of the machinery of the national government unless consent be shown, had been applied in 53 other decisions. 3 There is thus more than sufficient basis for an allegation of jurisdiction infirmity against the order of respondent Judge denying the motion to dismiss dated October 4, 1972. 4 What is more, the position of the Republic has been fortified with the explicit affirmation found in this provision of the present Constitution: "The State may not be sued without its consent." 5 The merit of the petition for certiorari and prohibition is thus obvious. 1. There is pertinence to this excerpt from Switzerland General Insurance Co., Ltd. v. Republic of the Philippines: 6"The doctrine of non-suability recognized in this jurisdiction even prior to the effectivity of the [1935]

Constitution is a logical corollary of the positivist concept of law which, to para-phrase Holmes, negates the assertion of any legal right as against the state, in itself the source of the law on which such a right may be predicated. Nor is this all.lwphl@itEven if such a principle does give rise to problems, considering the vastly expanded role of government enabling it to engage in business pursuits to promote the general welfare, it is not obeisance to the analytical school of thought alone that calls for its continued applicability. Why it must continue to be so, even if the matter be viewed sociologically, was set forth in Providence Washington Insurance Co. v. Republic thus: "Nonetheless, 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 the 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." 7 It only remains to be added that under the present Constitution which, as noted, expressly reaffirmed such a doctrine, the following decisions had been rendered: Del mar v. The Philippine veterans Administration; 8 Republic v. Villasor; 9 Sayson v. Singson;10 and Director of the Bureau of Printing v. Francisco. 11 2. Equally so, the next paragraph in the above opinion from the Switzerland General Insurance Company decision is likewise relevant: "Nor is injustice thereby cause private parties. They could still proceed to seek collection of their money claims by pursuing the statutory remedy of having the Auditor General pass upon them subject to appeal to judicial tribunals for final adjudication. We could thus correctly conclude as we did in the cited Provindence Washington Insurance decision: "Thus the doctrine of nonsuability of the government without its consent, as it has operated in practice, hardly lends itself to the charge that it could be the fruitful parent of injustice, considering the vast and ever-widening scope of state activities at present being undertaken. Whatever difficulties for private claimants may still exist, is, from an objective appraisal of all factors, minimal. In the balancing of interests, so unavoidable in the determination of what principles must prevail if government is to satisfy the public weal, the verdict must be, as it has been these so many years, for its continuing recognition as a fundamental postulate of constitutional law." 12 3. Apparently respondent Judge was misled by the terms of the contract between the private respondent, plaintiff in his sala, and defendant Rice and Corn Administration which, according to him, anticipated the case of a

breach of contract within the parties and the suits that may thereafter arise. 13 The consent, to be effective though, must come from the State acting through a duly enacted statute as pointed out by Justice Bengzon in Mobil. Thus, whatever counsel for defendant Rice and Corn Administration agreed to had no binding force on the government. That was clearly beyond the scope of his authority. At any rate, Justice Sanchez, in Ramos v. Court of Industrial Relations, 14 was quite categorical as to its "not [being] possessed of a separate and distinct corporate existence. On the contrary, by the law of its creation, it is an office directly 'under the Office of the President of the Philippines." 15 WHEREFORE, the petitioner for certiorari is granted and the resolution of October 4, 1972 denying the motion to dismiss filed by the Rice and Corn Administration nullified and set aside and the petitioner for prohibition is likewise granted restraining respondent Judge from acting on civil Case No. 79082 pending in his sala except for the purpose of ordering its dismissal for lack of jurisdiction. The temporary restraining order issued on February 8, 1973 by this Court is made permanent terminating this case. Costs against Yellow Ball Freight Lines, Inc. Antonio, Aquino, Concepcion, Jr. and Santos, JJ., concur. Barredo, J., took no part.

Footnotes 1 Petitioner, Annex H. 2 L-23139, December 17 1966, 18 SCRA 1120. 3 Insurance Company of North America v. Republic, L-24520, July 11, 1967, 20 SCRA 648, was the first case citing Mobil with approval. The last opinion came from the pen of Chief Justice Concepcion deciding therein the appeals in Union Insurance Society of Canton, Ltd. v. Republic, L-26409, 46 SCRA 120; Domestic Insurance Company of the Philippines v. Republic, L26550, 46 SCRA 121; Insurance Company of North America v. Republic, L-26587, 46 SCRA 121; British Traders Insurance Co., Ltd. v. Barber Line, Macondray and Co., Inc., L-31157, 46 SCRA 121, the decisions being promulgated on July 31, 1972. 4 Ibid, Annex J.

5 Article XV, Section 16. 6 L-27389, March 30, 1970, 32 SCRA 227. 8 L-27299, June 27, 1973, 51 SCRA 340. 9 L-30671, November 28, 1973, 54 SCRA 83. 10 L-30044, December 19, 1973, 54 SCRA 282. 11 L-31337, December 20, 1973, 54 SCRA 324. 12 32 SCRA 227, 229-230. 13 Petition, Annex J, 2. 14 L-22753, December 18, 1967, 21 SCRA 1283. 15 Ibid, 1287.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-5156 March 11, 1954

CARMEN FESTEJO, demandante-apelante, vs. ISAIAS FERNANDO, Director de Obras Publicas, demandado-apelado. D. Eloy B. Bello en representacion de la apelante. El Procurador General Sr. Pompeyo Diaz y el Procurador Sr. Antonio A. Torres en representacion del apelado. DIOKNO, J.: Carmen Festejo, duea de unos terrenos azucareros, de un total de unas 9 hectareas y media de superfice, demando a "Isaias Fernando Director, Bureau of public Works, que como tal Director de Obras Publicas tiene a su cargo los sistemas y proyectos de irrigacion y es el funcionario responsable de la construccion de los sistemas de irrigacion en el pais," alegando que The defendant, as Director of the Bureau of Public Works, without authority obtained first from the Court of First Instance of Ilocos Sur, without obtaining first a right of way, and without the consent and knowledge of the plaintiff, and against her express objection unlawfully took possession of portions of the three parcels of land described above, and caused an irrigation canal to be constructed on the portion of the three parcels of land on or about the month of February 1951 the aggregate area being 24,179 square meters to the damage and prejudice of the plaintiff. ----- R. on A., p. 3. causando a ella variados daos y perjuicios. Pidio, en su consecuencia, sentencia condenando el demandado:

. . . to return or cause to be returned the possession of the portions of land unlawfully occupied and appropriated in the aggregate area of 24,179 square meters and to return the land to its former condition under the expenses of the defendant. . . . In the remote event that the portions of land unlawfully occupied and appropriated can not be returned to the plaintiff, then to order the defendant to pay to the plaintiff the sum of P19,343.20 as value of the portions totalling an area of 24,179 square meters; ---- R. on A., p. 5. y ademas a pagar P9,756.19 de daos y P5,000 de honorarios de abogado, con las costas R. on A., pp. 5-6. El demandado, por medio del Procurador General, presento mocion de sobreseimiento de la demanda por el fundamento de que el Juzgado no tiene jurisdiccion para dictar sentencia valida contra el, toda vez que judicialmente la reclamacion es contra la Republica de Filipinas, y esta no ha presentado su consentimiento a la demanda. El Juzgado inferior estimo la mocion y sobreseyo la demanda sin perjuicio y sin costas. En apelacion, la demandante sostiene que fue un error considerar la demanda como una contra la Republica y sobreseer en su virtud la demanda. La mocion contra "Isaias Fernando, Director de Obras Publicas, encargado y responsable de la construccion de los sistemas de irrigacion en Filipinas" es una dirigida personalmente contra el, por actos que asumio ejecutar en su concepto oficial. La ley no le exime de responsabilidad por las extralimitaciones que cometa o haga cometer en el desempeo de sus funciones oficiales. Un caso semejante es el de Nelson vs. Bobcock (1933) 18 minn. 584, NW 49, 90 ALR 1472. Alli el Comisionado de Carreteras, al mejorar un trozo de la carretera ocupo o se apropio de terrenos contiguos al derecho de paso. El Tribunal Supremo del Estado declaro que es personalmenteresponsable al dueo de los daos causados. Declaro ademas que la ratificacion de lo que hicieron sus subordinados era equivalente a una orden a los mismos. He aqui lo dijo el Tribunal. We think the evidence and conceded facts permitted the jury in finding that in the trespass on plaintiff's land defendant committed acts outside the scope of his authority. When he went outside the boundaries of the right of way upon plaintiff's land and damaged it or destroyed its former condition an dusefulness, he must be held to have designedly departed from the duties imposed on him by law. There can be no claim that he thus invaded plaintiff's land southeasterly of the right of way innocently. Surveys clearly marked the limits of the land

appropriated for the right of way of this trunk highway before construction began. . . . "Ratification may be equivalent to command, and cooperation may be inferred from acquiescence where there is power to restrain." It is unnecessary to consider other cases cited, . . ., for as before suggested, the jury could find or infer that, in so far as there was actual trespass by appropriation of plaintiff's land as a dumping place for the rock to be removed from the additional appropriated right of way, defendant planned, approved, and ratified what was done by his subordinates. Nelson vs. Bobcock, 90 A.L.R., 1472, 1476, 1477. La doctrina sobre la responsabilidad civil de los funcionarios en casos parecidos se resume como sigue: Ordinarily the officer or employee committing the tort is personally liable therefor, and may be sued as any other citizen and held answerable for whatever injury or damage results from his tortious act. 49 Am. Jur. 289. . . . If an officer, even while acting under color of his office, exceeds the power conferred on him by law, he cannot shelter himself under the plea that he is a public agent. 43 Am. Jur. 86. It is a general rule that an officer-executive, administrative quasijudicial, ministerial, or otherwise who acts outside the scope of his jurisdiction and without authorization of law may thereby render himself amenable to personal liability in a civil suit. If he exceed the power conferred on him by law, he cannot shelter himself by the plea that he is a public agent acting under the color of his office, and not personally. In the eye of the law, his acts then are wholly without authority. 43 Am. Jur. 89-90. El articulo 32 del Codigo Civil dice a su vez: ART. 32. Any public officer or emplyee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages: xxx xxx xxx

(6) The right against deprivation of property without due process of law;

xxx

xxx

xxx

In any of the cases referred to this article, whether or not the defendant's acts or omission constitutes a criminal offense, the aggrieved party has a right ot commence an entirely separate and distinct civil action for damages, and for other relief. Such civil action shall proceed independently of any criminal prosecution (if the latter be instituted), and may be proved by a preponderance of evidence. The inmdemnity shall include moral damages Exemplary damages may also be adjudicated. Veanse tambien Lung vs. Aldanese, 45 Phil., 784; Syquia vs. Almeda, No. L-1648, Agosto 17, 1947; Marquez vs. Nelson, No. L-2412, Septiembre 1950. Se revoca la orden apelada y se ordena la continuacion de la tramitacion de la demanda conforme proveen los reglamentos. Sin especial pronunciamiento en cuanto a las costas. Asi se ordena. Padilla, Reyes, Jugo, Bautista Angelo and Labrador, MM., estan conformes.

Separate Opinions CONCEPCION, J., dissenting: To my mind, the allegations of the complaint lead to no other conclusion than that appellee Isaias Fernando is a party in this case, not in his personal capacity, but as an officer of the Government. According to said pleading the defendant is "Isaias Fernando, Director, Bureau of Public Works." Moreover, in paragraphs 4 and 5 of the complaint, it is alleged: 4. That the defendant as Director of the Bureau of Public Works, is in charge of irrigation projects and systems, and the official responsible for the construction of irrigation system in the Philippines; 5. That the defendant, as Director of the Bureau of Public Works, without authority obtained first from the Court of First Instance of Ilocos Sur, without obtaining first a right of way, and without the consent and knowledge of the plaintiff, and against her express objection, unlawfully took possession of portions of the three parcels of land described above, and caused an irrigation canal to be constructed

on the portion of the three parcels of land on or about the month of February 1951 the aggregate area being 24,179 square meters to the damage and prejudice of the plaintiff. (Emphasis supplied.) The emphasis thus placed upon the allegation that the acts complained of were performed by said defendant "as Director of the Bureau of Public Works," clearly shows that the designation of his office was included in the title of the case to indicate that he was being sued in his official capacity. This conclusion is bolstered up by the fact that, among other things, plaintiff prays, in the complaint, for a judgment Ordering the defendant to return or caused to be returned the possession of the portions of land unlawfully occupied and appropriated in the aggregate area of 24,179 square meters and to return the land to its former condition under the expense of the defendant. (Paragraph a, of the complaint). We take judicial notice of the fact that the irrigation projects and system reffered to in the complaint of which the defendant, Isaias Fernando, according to the same pleading, is "in charge" and for which he is "responsible" as Director of the Bureau of Public Works are established and operated with public funds, which pursuant to the Constitution, must be appropriated by law. Irrespective of the manner in which the construction may have been undertaken by the Bureau of Public Works, the system or canal is, therefore, a property of the Government. Consequently, in praying that possession of the portions of land occupied by the irrigation canal involved in the present case be returned to plaintiff therein, and that said land be restored to its former condition, plaintiff seeks to divest the Government of its possession of said irrigation canal, and, what is worse, to cause said property of the Government to be removed or destroyed. As held in Syquia vs. Lopez (47 Off. Gaz., 665), the Government is, accordingly, "the real party in interest as defendant" in the case at bar. In other words, the same partakes of the nature of a suit against the state and may not be maintained without its consent. Hence I am constrained to dissent. Bengzon, J., concurs.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 101949 December 1, 1994 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. Padilla Law Office for petitioner.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

QUIASON, J.: This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside the Orders dated June 20, 1991 and September 19, 1991 of the Regional Trial Court, Branch 61, Makati, Metro Manila in Civil Case No. 90-183. The Order dated June 20, 1991 denied the motion of petitioner to dismiss the complaint in Civil Case No. 90-183, while the Order dated September 19, 1991 denied the motion for reconsideration of the June 20,1991 Order. 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 consisting of 6,000 square meters (Lot 5-A, Transfer Certificate of Title No. 390440) 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 which are covered by Transfer Certificates of Title Nos. 271108 and 265388 respectively and 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). I On January 23, 1990, private respondent filed a complaint with the Regional Trial Court, 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 (Civil Case No. 90-183). 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 5D 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. On June 8, 1990, 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. An opposition to the motion was filed by private respondent. On June 20, 1991, 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" (Rollo, pp. 20-21). On July 12, 1991, petitioner moved for reconsideration of the order. On August 30, 1991, petitioner filed a "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation for claim of Immunity as a Jurisdictional Defense." So as to facilitate the determination of its defense of sovereign immunity, petitioner prayed that a hearing be conducted to allow it to establish certain facts upon which the said defense is based. Private respondent opposed this motion as well as the motion for reconsideration. On October 1, 1991, the trial court issued an order deferring the resolution on the motion for reconsideration until after trial on the merits and directing petitioner to file its answer (Rollo, p. 22). 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" (Rollo, p. 87). Private respondent opposed the intervention of the Department of Foreign Affairs. In compliance with the resolution of this Court, both parties and the Department of Foreign Affairs submitted their respective memoranda. II A preliminary matter to be threshed out is the procedural issue of whether the petition for certiorari under Rule 65 of the Revised Rules of Court can be availed of to question the order denying petitioner's motion to dismiss. The general rule is that an order denying a motion to dismiss is not reviewable by the appellate courts, the remedy of the movant being to file his answer and to proceed with the hearing before the trial court. But the general rule admits of exceptions, and one of these is when it is very clear in the records that the trial court has no alternative but to dismiss the complaint

(Philippine National Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service Commission, 216 SCRA 114 [1992]. In such a case, it would be a sheer waste of time and energy to require the parties to undergo the rigors of a trial. The other procedural question raised by private respondent is the personality or legal interest of the Department of Foreign Affairs to intervene in the case in behalf of the Holy See (Rollo, pp. 186-190). 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" (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]). 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, 190 SCRA 130 (1990), 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. InWorld Health Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), 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. In some cases, the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private counsels (Raquiza v. Bradford, 75 Phil. 50 [1945]; Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America v. Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign states bypass the Foreign Office, the courts can inquire into the facts and make their own determination as to the nature of the acts and transactions involved. III The burden of the petition is that respondent trial court has no jurisdiction over petitioner, being a foreign state enjoying sovereign immunity. On the other hand, private respondent insists that the doctrine of non-suability is not anymore absolute and that petitioner has divested itself of such a cloak when, of its own free will, it entered into a commercial transaction for the sale of a parcel of land located in the Philippines. 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 (Salonga and Yap, Public International Law 36-37 [1992]). 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 (Garcia, Questions and Problems In International Law, Public and Private 81 [1948]). 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" (O'Connell, I International Law 311 [1965]).

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 (Salonga and Yap, supra, 37). 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 (Fenwick, International Law 124125 [1948]; Cruz, International Law 37 [1991]). 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" (Fenwick, supra., 125; Kelsen, Principles of International Law 160 [1956]). 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 (Kunz, The Status of the Holy See in International Law, 46 The American Journal of International Law 308 [1952]). 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 (Rollo, p. 87). 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 (United States of America v. Guinto, 182 SCRA 644 [1990]).

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 (United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public International Law 194 [1984]). 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 (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of public bidding for the repair of a wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and (3) the change of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]).

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 (United States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for the operation of barber shops in Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA 644 [1990]). 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 nonsuability 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 (Rollo, pp. 26, 27). The issue of petitioner's non-suability can be determined by the trial court without going to trial in the light of the pleadings, particularly the admission of private respondent. Besides, 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 (Administrative Code of 1987, Book IV, Title I, Sec. 3), 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 (Rollo, pp. 156-157). 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 (International Catholic Migration Commission v. Calleja, 190 SCRA 130 [1990]). 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 (World Health Organization v. Aquino, 48 SCRA 242 [1972]). As in International Catholic Migration Commission and in World Health Organization, we abide by the certification of the Department of Foreign Affairs. Ordinarily, the procedure would be to remand the case and order the trial court to conduct a hearing to establish the facts alleged by petitioner in its motion. In view of said certification, such procedure would however be pointless and unduly circuitous (Ortigas & Co. Ltd. Partnership v. Judge Tirso Velasco, G.R. No. 109645, July 25, 1994). IV 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 (Young, Remedies of Private Claimants Against Foreign States, Selected Readings on Protection by Law of Private Foreign Investments 905, 919 [1964]). Once the Philippine government decides to espouse the claim, the latter ceases to be a private cause. According to the Permanent Court of International Justice, the forerunner of the International Court of Justice: By taking up the case of one of its subjects and by reporting to diplomatic action or international judicial proceedings on his behalf, a State is in reality asserting its own rights its right to ensure, in the person of its subjects, respect for the rules of international law (The Mavrommatis Palestine Concessions, 1 Hudson, World Court Reports 293, 302 [1924]). WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183 against petitioner is DISMISSED. SO ORDERED.

Narvasa, C.J., Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan and Mendoza, JJ., concur. Padilla, J., took no part. Feliciano, J., is on leave.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. L-26400 February 29, 1972 VICTORIA AMIGABLE, plaintiff-appellant, vs.

NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE PHILIPPINES, defendants-appellees.

MAKALINTAL, J.:p This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No. R-5977, dismissing the plaintiff's complaint. Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad Estate in Cebu City as shown by Transfer Certificate of Title No. T-18060, which superseded Transfer Certificate of Title No. RT3272 (T-3435) issued to her by the Register of Deeds of Cebu on February 1, 1924. No annotation in favor of the government of any right or interest in the property appears at the back of the certificate. Without prior expropriation or negotiated sale, the government used a portion of said lot, with an area of 6,167 square meters, for the construction of the Mango and Gorordo Avenues. It appears that said avenues were already existing in 1921 although "they were in bad condition and very narrow, unlike the wide and beautiful avenues that they are now," and "that the tracing of said roads was begun in 1924, and the formal construction in 1925." * On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting payment of the portion of her lot which had been appropriated by the government. The claim was indorsed to the Auditor General, who disallowed it in his 9th Indorsement dated December 9, 1958. A copy of said indorsement was transmitted to Amigable's counsel by the Office of the President on January 7, 1959. On February 6, 1959 Amigable filed in the court a quo a complaint, which was later amended on April 17, 1959 upon motion of the defendants, against the Republic of the Philippines and Nicolas Cuenca, in his capacity as Commissioner of Public Highways for the recovery of ownership and possession of the 6,167 square meters of land traversed by the Mango and Gorordo Avenues. She also sought the payment of compensatory damages in the sum of P50,000.00 for the illegal occupation of her land, moral damages in the sum of P25,000.00, attorney's fees in the sum of P5,000.00 and the costs of the suit. Within the reglementary period the defendants filed a joint answer denying the material allegations of the complaint and interposing the following

affirmative defenses, to wit: (1) that the action was premature, the claim not having been filed first with the Office of the Auditor General; (2) that the right of action for the recovery of any amount which might be due the plaintiff, if any, had already prescribed; (3) that the action being a suit against the Government, the claim for moral damages, attorney's fees and costs had no valid basis since as to these items the Government had not given its consent to be sued; and (4) that inasmuch as it was the province of Cebu that appropriated and used the area involved in the construction of Mango Avenue, plaintiff had no cause of action against the defendants. During the scheduled hearings nobody appeared for the defendants notwithstanding due notice, so the trial court proceeded to receive the plaintiff's evidence ex parte. On July 29, 1959 said court rendered its decision holding that it had no jurisdiction over the plaintiff's cause of action for the recovery of possession and ownership of the portion of her lot in question on the ground that the government cannot be sued without its consent; that it had neither original nor appellate jurisdiction to hear, try and decide plaintiff's claim for compensatory damages in the sum of P50,000.00, the same being a money claim against the government; and that the claim for moral damages had long prescribed, nor did it have jurisdiction over said claim because the government had not given its consent to be sued. Accordingly, the complaint was dismissed. Unable to secure a reconsideration, the plaintiff appealed to the Court of Appeals, which subsequently certified the case to Us, there being no question of fact involved. The issue here is whether or not the appellant may properly sue the government under the facts of the case. In the case of Ministerio vs. Court of First Instance of Cebu, 1 involving a claim for payment of the value of a portion of land used for the widening of the Gorordo Avenue in Cebu City, this Court, through Mr. Justice Enrique M. Fernando, held that where the government takes away property from a private landowner for public use without going through the legal process of expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the government without thereby violating the doctrine of governmental immunity from suit without its consent. We there said: . ... . If the constitutional mandate that the owner be compensated for property taken for public use were to be respected, as it should, then a suit of this character should not be summarily dismissed. The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen. Had the government followed the procedure indicated by

the governing law at the time, a complaint would have been filed by it, and only upon payment of the compensation fixed by the judgment, or after tender to the party entitled to such payment of the amount fixed, may it "have the right to enter in and upon the land so condemned, to appropriate the same to the public use defined in the judgment." If there were an observance of procedural regularity, petitioners would not be in the sad plaint they are now. It is unthinkable then that precisely because there was a failure to abide by what the law requires, the government would stand to benefit. It is just as important, if not more so, that there be fidelity to legal norms on the part of officialdom if the rule of law were to be maintained. It is not too much to say that when the government takes any property for public use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine of immunity from suit could still be appropriately invoked. Considering that no annotation in favor of the government appears at the back of her certificate of title and that she has not executed any deed of conveyance of any portion of her lot to the government, the appellant remains the owner of the whole lot. As registered owner, she could bring an action to recover possession of the portion of land in question at anytime because possession is one of the attributes of ownership. However, since restoration of possession of said portion by the government is neither convenient nor feasible at this time because it is now and has been used for road purposes, the only relief available is for the government to make due compensation which it could and should have done years ago. To determine the due compensation for the land, the basis should be the price or value thereof at the time of the taking. 2 As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the price of the land from the time it was taken up to the time that payment is made by the government. 3 In addition, the government should pay for attorney's fees, the amount of which should be fixed by the trial court after hearing. WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the court a quo for the determination of compensation, including attorney's fees, to which the appellant is entitled as above indicated. No pronouncement as to costs. Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo, Villamor and Makasiar JJ., concur.

Footnotes * Decision, Record on Appeal, p. 12. 1 G.R. No. L-31635, August 31, 1971 (40 SCRA 464). 2 Alfonso vs. City of Pasay (106 Phil. 1017). 3 Alfonso vs. City of Pasay, supra.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

G.R. Nos. L-71998-99 June 2, 1993 EMILIANO R. DE LOS SANTOS, SPOUSES NORMA A. PADILLA and ISIDORO L. PADILLA and the HEIRS OF FRANCISCO DAYRIT, petitioners, vs. THE HON. INTERMEDIATE APPELLATE COURT, HON. JUDGE CICERRO C. JURADO and EDILBERTO CADIENTE, respondents. Isidoro L. Padilla for petitioners. Joaquin G. Mendoza for E. Cadiente.

ROMERO, J.: Questioned in the instant petition for review on certiorari is the Decision of the then Intermediate Appellate Court 1affirming the December 1, 1982 order of the then Court of First Instance of Rizal, Branch XXII at Pasig 2 in civil Cases Nos. 46800 which states in toto: It appearing that the construction of the road and creek in question was a project undertaken under the authority of the Minister of Public Works, the funding of which was the responsibility of the National Government and that the defendants impleaded herein are Edilberto Cadiente and Nestor Agustin and not the Republic of the Philippines which cannot be sued without its consent, this court hereby resolves to dismiss these two (2) cases without pronouncement as to costs. SO ORDERED. Civil Cases Nos. 46800 and 46801 were both filed on July 13, 1982 by petitioners who are co-owners under TCT No. 329945 of a parcel of land located in Barrio Wawa, Binangonan, Rizal with an area of nineteen

thousand sixty-one (19,061) square meters. In Civil Case No. 46800, petitioners alleged in the petition for prohibition that in October 1981, without their knowledge or consent, Lorenzo Cadiente, a private contractor and the Provincial Engineer of Rizal constructed a road nine (9) meters wide and one hundred twenty-eight meters and seventy centimeters (128.70) long occupying a total area of one thousand one hundred sixty-five (1,165) square meters of their land. Petitioners added that aside from the road, the said respondents also constructed, without their knowledge and consent, an artificial creek twenty three meters and twenty centimeters (23.20) wide and one hundred twentyeight meters and sixty-nine centimeters long (128.69) occupying an area of two thousand nine hundred six (2,906) square meters of their property. Constructed in a zig-zag manner, the creek meandered through their property. Alleging that it completed, the road and the creek would "serve no public profitable and practicable purpose but for respondents' personal profit, to the great damage and prejudice of the taxpayers and the petitioners," the same petitioners invoked their rights under Art. IV Secs. 1 and 2, of the Bill of Rights of the 1973 Constitution and prayed for the issuance of restraining order or a writ of preliminary injunction to stop the construction. They also prayed that after hearing on the merits, judgment be rendered: (1) declaring illegal the construction of the road and artificial creek which was made without their knowledge and consent, "without due process and without just compensation and in violation of the provision of statute law and of the Philippine Constitution;" (2) issuing a permanent prohibition; (3) ordering respondents to pay petitioners "jointly and collectively" P15,00.00 as attorney's fees and P600.00 for each appearance, and (4) ordering the respondents to pay the costs of the suit. 3 An action for damages, Civil Case No. 46801 on the other hand, was founded on Art. 32, paragraphs 6 and 7 of the Civil Code and the constitutional provisions on the right against deprivation of property without due process of law and without just compensation. Thereafter, the two cases were consolidated. On November 11, 1982, the Solicitor General filed a motion to dismiss both cases on the following grounds: (a) with respect to Civil Case No. 46800, the pendency of Civil Case No. 46801 which involved the same parties and cause of action; (b) both cases were in reality suits against the state which could not be maintained without the State's consent; and (c) lack of cause of action.

Consequently, the lower court issued the aforequoted Order of December 1, 1982. Their motion for the reconsideration of said Order having been denied, petitioners elevated (to) the cases to this Court through an "appeal by certiorari" which was docketed as G. R. No. 63610. The Second Division of this Court, however, referred the cases to the then Intermediate Appellate Court pursuant to Sec. 16 of the Interim Rules. 4 In due course, the Appellate court rendered a Decision on May 22, 1985 which disposed of the cases thus: Accordingly, the two actions cannot be maintained. They are in reality suits against the state which has not given its consent to be sued (Minister [sic] vs. CFI, 40 SCRA 464; Isberto vs. Raquiza, 67 SCRA 116; Begosa v. Chairman, PVA, 32 SCRA 466). Appellants' remedy lies elsewhere. Appellants assert that the taking of their property in the manner alleged in these two cases was without due process of law. This is not correct. The appealed order has not closed the door to appellants right, if any, to just compensation for the alleged area of their land which was expropriated. The court below dismissed the cases for lack of consent on the part of the state to be sued herein. We repeat appellants' remedy for just compensation lies elsewhere. WHEREFORE, the order appealed from is in full accord with the evidence and the law and is hereby therefore affirmed in all its parts. Costs against appellants. SO ORDERED. 5 Consequently, petitioners elevated the cases to this Court through a petition for review on certiorari. The petition is anchored on the ruling of the Court in Amigable v. Cuenca 6 which states: ". . . . where the government takes away property from a private landowner for public use without going through the legal process of expropriation or negotiated sale," a suit may properly be maintained against the government. We hold for the petitioners. That the principle of state immunity from suit cannot be invoked to defeat petitioners' claim has long been settled. In Ministerio v. Court of First Instance of Cebu, 7 the Court held: . . . . The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen.

Had the government followed the procedure indicated by the governing law at the time, a complaint would have been filed by it, and only upon payment of the compensation fixed by the judgment, or after tender to the party entitled to such payment of the amount fixed, may it "have the right to enter in and upon the land so condemned" to appropriate the same to the public use defined in the judgment. If there were an observance of procedural regularity, petitioners would not be in the said plaint they are now. It is unthinkable then that precisely because there was a failure to abide by what the law requires, the government would stand to benefit. It just as important, if not more so, that there be fidelity to legal norms on the part of the officialdom if the rule of law were to be maintained. It is not too much to say that when the government takes any property for public use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine of immunity from suit could still be appropriately invoked. We find the facts of the Ministerio case on all fours with the instant cases insofar as the fact that the respondent government officials executed a shortcut in appropriating petitioners' property for public use is concerned. As in the Amigable case, no expropriation proceedings were initiated before construction of the projects began. In like manner, nowhere in his pleadings in the cases at bar does the Solicitor General mention that the fact that expropriation proceedings had in fact been undertaken before the road and artificial creek were constructed. Thus, quoting the answer of the defendants in Civil Case No. 46801, the Solicitor General summarized the facts which defendants considered as constituting justification for the construction as follows: 10. The construction of the road and creek in question on the property which at the time was said to be public property, was initiated, and construction effected, through the usual and ordinary course, as shown by the following: a. November 5, 1979 Engr. Data who was the incumbent District Engineer submitted (thru channels) plans, program of works and detailed estimates for approval of higher authorities, thru the initiation of Mayor Ynares and Assemblyman Gilberto Duavit;

b. February 18, 1980 Regional Director Eduardo L. Lagunilla, MPW Region IV, EDSA, Quezon City endorsed said request to the Minister of Public Works;. c. February 13, 1981 Assemblyman Gilberto Duavit sent a hand-written follow-up note regarding the project; d. June 17, 1981 The undersigned defendant Nestor Agustin was designated Chief Civil Engineer of the Rizal Engineer District, Vice Engr. Cresencio Data who reached his compulsory retirement age; e. September 23, 1981 Funds in the amount of P588,000.00 was released for partial implementation of the project. The total amount requested was P1,200,000. 00; f. October 19, 1981 The undersigned submitted a request to the MPWH Central Office seeking authority to effect implementation of the project; g. October 29, 1981 The Regional Director approved the plans and program of works for the project in the amount of P588,000.00; h. November 11, 1981 The Honorable Minister Jesus S. Hipolito granted the request to undertake the implementation of the project; i. November 25, 1981 Project implementation was started; j. March 3, 1982 Construction of rock bulkhead was completed; k. November 23, 1982 P249,000.00 was released for improvement (deepening and diverting of flow) of Binangonan River which was a complimentary structure of Binangonan port system; l. April 9, 1982 Implementation was started. Contract for this project was approved by the Regional Director in favor of EDILBERTO CADIENTE CONSTRUCTION;

m. May 21, 1982 Deepening slightly of the adjacent portion of the rock bulkhead was completed. 11. The construction of the structures was done in good faith; The construction of the roadway and deepening of the creek was designated to generate for the municipality of Binangonan, Rizal more benefits in the form of substantial revenue from fishing industry, parking area, market rentals, development site, and road system improvements. The area covered by said public improvements is part of the Laguna Lake area which is submerged in water even during dry season. The municipal mayor of Binangonan, Rizal stated that said area is public property. 8 Public respondents' belief that the property involved is public, even if buttressed by statements of other public officials, is no reason for the unjust taking of petitioners' property. As TCT No. 329945 shows, the property was registered under the Torrens system in the names of "Emiliano R. de los Santos, married to Corazon Dayrit; and Norma Alabastro, married to Isidro L. Padilla" as early as March 29, 1971. Had the public respondents, including the other officials involved in the construction, performed their functions by exercising even the ordinary diligence expected of them as public officials, they would not have failed to note that the property is a private one. A public infrastructure losses its laudability if, in the process of undertaking it, private rights are disregarded. In this connection, the Court said in Republic v. Sandiganbayan: 9 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 of 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. Public respondents' assertion that the project had been completed on May 21, 1982 meets strong opposition from the petitioners who insist that the project "until now is not yet finished." 10 This factual issue needs determination which only the trial court can undertake. Thus, the need for a full blown trial on the merits. We do not subscribe to the appellate court's suggestion that the remedy of the petitioners "lies elsewhere." The filing of another case to determine just compensation is superfluous. The issue may be threshed out below for practical reasons in the event that it is shown later that it is no longer possible to prohibit the public

respondents from continuing with the public work. As held in the Amigable case, damages may be awarded the petitioners in the form of legal interest on the price of the land to be reckoned from the time of the unlawful taking. WHEREFORE, the petition is hereby GRANTED and Civil Cases Nos. 46800 and 46801 shall be REMANDED to the lower court for trial on the merits after the Republic of the Philippines shall have been impleaded as defendant in both cases. Feliciano, Davide, Jr., Romero, and Melo, JJ. concur. Bidin, J. took no part.

# Footnotes 1 Associate Justice Porfirio V. Sison, ponente, Associate Justices Abdulwahid A. Bidin and Marcelino R. Veloso, concurring. 2 Judge Gregorio G. Pineda, presiding. 3 Record of Civil Case No. 46800, pp. 4-5. 4 Rollo, p. 19. 5 Rollo, p. 22. 6 L-26400, February 29, 1972, 43 SCRA 360. 7 L-31635, August 31, 1971, 40 SCRA 464. 8 Comment of Public Respondents, pp. 3-5, quoting the Motion to Dismiss, pp. 4-5, which in turn lifted the answer in Civil Case No. 46801 of Nestor Agustin, represented by then Solicitor General Estelito P. Mendoza, Assistant Solicitor General Ruben E. Agpalo and Solicitor Gloria Fermo-Berin, pp. 3-4 (Rollo, pp. 42-44). 9 G. R. No. 90478, November 21, 1991, 204 SCRA 212, 231. 10 Petitioners' Reply to Comment, p. 2; Rollo, p. 56. Republic of the Philippines SUPREME COURT Manila

EN BANC

G.R. No. L-31635 August 31, 1971 ANGEL MINISTERIO and ASUNCION SADAYA, petitioners, vs. THE COURT OF FIRST INSTANCE OF CEBU, Fourth Branch, Presided by the Honorable, Judge JOSE C. BORROMEO, THE PUBLIC HIGHWAY COMMISSIONER, and THE AUDITOR GENERAL, respondents. Eriberto Seno for petitioners. Office of the Solicitor General Felix Q. Antonio, Acting First Assistant Solicitor General Antonio A. Torres and Solicitor Norberto P. Eduardo for respondents.

FERNANDO, J.: What is before this Court for determination in this appeal by certiorari to review a decision of the Court of First Instance of Cebu is the question of whether or not plaintiffs, now petitioners, seeking the just compensation to which they are entitled under the Constitution for the expropriation of their property necessary for the widening of a street, no condemnation proceeding having been filed, could sue defendants Public Highway Commissioner and the Auditor General, in their capacity as public officials without thereby violating the principle of government immunity from suit without its consent. The lower court, relying on what it considered to be authoritative precedents, held that they could not and dismissed the suit. The matter was then elevated to us. After a careful consideration and with a view to avoiding the grave inconvenience, not to say possible injustice contrary to the constitutional mandate, that would be the result if no such suit were permitted, this Court arrives at a different conclusion, and sustains the right of the plaintiff to file a suit of this character. Accordingly, we reverse. Petitioners as plaintiffs in a complaint filed with the Court of First Instance of Cebu, dated April 13, 1966, sought the payment of just compensation for a registered lot, containing an area of 1045 square meters, alleging that in 1927 the National Government through its authorized representatives took physical and material possession of it and used it for the widening of the Gorordo Avenue, a national road, Cebu City, without paying just

compensation and without any agreement, either written or verbal. There was an allegation of repeated demands for the payment of its price or return of its possession, but defendants Public Highway Commissioner and the Auditor General refused to restore its possession. It was further alleged that on August 25, 1965, the appraisal committee of the City of Cebu approved Resolution No. 90, appraising the reasonable and just price of Lot No. 647-B at P50.00 per square meter or a total price of P52,250.00. Thereafter, the complaint was amended on June 30, 1966 in the sense that the remedy prayed for was in the alternative, either the restoration of possession or the payment of the just compensation. In the answer filed by defendants, now respondents, through the then Solicitor General, now Associate Justice, Antonio P. Barredo, the principal defense relied upon was that the suit in reality was one against the government and therefore should be dismissed, no consent having been shown. Then on July 11, 1969, the parties submitted a stipulation of facts to this effect: "That the plaintiffs are the registered owners of Lot 647-B of the Banilad estate described in the Survey plan RS-600 GLRO Record No. 5988 and more particularly described in Transfer Certificate of Title No. RT-5963 containing an area of 1,045 square meters; That the National Government in 1927 took possession of Lot 647-B Banilad estate, and used the same for the widening of Gorordo Avenue; That the Appraisal Committee of Cebu City approved Resolution No. 90, Series of 1965 fixing the price of Lot No. 647-B at P50.00 per square meter; That Lot No. 647-B is still in the possession of the National Government the same being utilized as part of the Gorordo Avenue, Cebu City, and that the National Government has not as yet paid the value of the land which is being utilized for public use." 1 The lower court decision now under review was promulgated on January 30, 1969. As is evident from the excerpt to be cited, the plea that the suit was against the government without its consent having been manifested met with a favorable response. Thus: "It is uncontroverted that the land in question is used by the National Government for road purposes. No evidence was presented whether or not there was an agreement or contract between the government and the original owner and whether payment was paid or not to the original owner of the land. It may be presumed that when the land was taken by the government the payment of its value was made thereafter and no satisfactory explanation was given why this case was filed only in 1966. But granting that no compensation was given to the owner of the land, the case is undoubtedly against the National Government and there is no showing that the government has consented to be sued in this case. It may be contended that the present case is brought against the Public Highway Commissioner and the Auditor General and not against the National Government. Considering that the herein defendants are sued in

their official capacity the action is one against the National Government who should have been made a party in this case, but, as stated before, with its consent." 2 Then came this petition for certiorari to review the above decision. The principal error assigned would impugn the holding that the case being against the national government which was sued without its consent should be dismissed, as it was in fact dismissed. As was indicated in the opening paragraph of this opinion, this assignment of error is justified. The decision of the lower court cannot stand. We shall proceed to explain why. 1. The government is immune from suit without its consent. 3 Nor is it indispensable that it be the party proceeded against. If it appears that the action, would in fact hold it liable, the doctrine calls for application. It follows then that even if the defendants named were public officials, such a principle could still be an effective bar. This is clearly so where a litigation would result in a financial responsibility for the government, whether in the disbursements of funds or loss of property. Under such circumstances, the liability of the official sued is not personal. The party that could be adversely affected is government. Hence the defense of non-suability may be interposed. 4 So it has been categorically set forth in Syquia v. Almeda Lopez: 5 "However, and this is important, where the judgment in such a case would result not only in the recovery of possession of the property in favor of said citizen but also in a charge against or financial liability to the Government, then the suit should be regarded as one against the government itself, and, consequently, it cannot prosper or be validly entertained by the courts except with the consent of said Government." 6 2. It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications v. Aligean: 7 "Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that, while claiming to act for the State, he violates or invades the personal and property rights of the plaintiff, under an unconstitutional act or under an assumption of authority which he does not

have, is not a suit against the State within the constitutional provision that the State may not be sued without its consent." 8 3. It would follow then that the prayer in the amended complaint of petitioners being in the alternative, the lower court, instead of dismissing the same, could have passed upon the claim of plaintiffs there, now petitioners, for the recovery of the possession of the disputed lot, since no proceeding for eminent domain, as required by the then Code of Civil Procedure, was instituted. 9 However, as noted in Alfonso v. Pasay City, 10 this Court speaking through Justice Montemayor, restoration would be "neither convenient nor feasible because it is now and has been used for road purposes." 11 The only relief, in the opinion of this Court, would be for the government "to make due compensation, ..." 12 It was made clear in such decision that compensation should have been made "as far back as the date of the taking." Does it result, therefore, that petitioners would be absolutely remediless since recovery of possession is in effect barred by the above decision? If the constitutional mandate that the owner be compensated for property taken for public use 13 were to be respected, as it should, then a suit of this character should not be summarily dismissed. The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen. Had the government followed the procedure indicated by the governing law at the time, a complaint would have been filed by it, and only upon payment of the compensation fixed by the judgment, or after tender to the party entitled to such payment of the amount fixed, may it "have the right to enter in and upon the land so condemned" to appropriate the same to the public use defined in the judgment." 14 If there were an observance of procedural regularity, petitioners would not be in the sad plaint they are now. It is unthinkable then that precisely because there was a failure to abide by what the law requires, the government would stand to benefit. It is just as important, if not more so, that there be fidelity to legal norms on the part of officialdom if the rule of law were to be maintained. It is not too much to say that when the government takes any property for public use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine of immunity from suit could still be appropriately invoked. 15 Accordingly, the lower court decision is reversed so that the court may proceed with the complaint and determine the compensation to which petitioners are entitled, taking into account the ruling in the above Alfonso case: "As to the value of the property, although the plaintiff claims the present market value thereof, the rule is that to determine due compensation for lands appropriated by the Government, the basis should

be the price or value at the time that it was taken from the owner and appropriated by the Government." 16 WHEREFORE, the lower court decision of January 30, 1969 dismissing the complaint is reversed and the case remanded to the lower court for proceedings in accordance with law. Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Teehankee, Villamor and Makasiar, JJ., concur. Concepcion, C.J., and Barredo, J., took no part.

Footnotes 1 Petition, Annex H, pp. 1 and 2. 2 Ibid, Annex I, p.4. 3 Cf. Providence Washington Insurance Co. v. Republic, L-26386, Sept. 30, 1969, 29 SCRA 598; Fireman's Fund Insurance Co. v. United States Lines Co., L-26533, Jan. 30, 1970, 31 SCRA 309; Switzerland General Insurance Company, Ltd. v. Republic, L27389, March 30, 1970; 32 SCRA 227. 4 Cf. Begosa v. Chairman Philippine Veterans Administration, L25916, April 30, 1970, 32 SCRA 466, citing Ruiz v. Cabahug, 102 Phil. 110 (1957) and Syquia v. Almeda Lopez, 84 Phil. 312 (1949). 5 84 Phil. 312 (1949) affirmed in Marvel Building Corp. v. Phil. War Damage Commission, 85 Phil. 27 (1949) and Johnson v. Turner, 94 Phil. 807 (1954). Such a doctrine goes back to Tan Te v. Bell, 27 Phil. 354 (1914). Cf. L. S. Moon v. Harrison, 43 Phil 27 (1922). 6 Ibid., p. 319. 7 L-31135, May 29, 1970, 33 SCRA 368. 8 Ibid., pp. 377-378. 9 Act No. 190 (1901). According to Section 241 of such Code: "The Government of the Philippine Islands, or of any province or department thereof, or of any municipality, and any person, or public or private corporation having by law the right to condemn private property for public use shall exercise that right in the

manner hereinafter prescribed." The next section reads: "The complaint in condemnation proceedings shall state with certainty the right of condemnation, and describe the property sought to be condemned, showing the interest of each defendant separately." Sec. 242. 10 106 Phil. 1017 (1960). 11 Ibid., p. 1022. 12 Ibid. 13 "According to Article III, Section 1, paragraph 2 of the Constitution: "Private property shall not be taken for public use without just compensation." 14 Section 247 of Act No. 190 reads in full: "Upon payment by the plaintiff to the defendant of compensation as fixed by the judgment, or after tender to him of the amount so fixed and payment of the costs, the plaintiff shall have the right to enter in and upon the land so condemned, to appropriate the same to the public use defined in the judgment. In case the defendant and his attorney absent themselves from the court or decline to receive the same, payment may be made to the clerk of the court for him, and such officer shall be responsible on his bond therefor and shall be compelled to receive it." 15 Cf. Merrit v. Government of the Philippine Islands, 34 Phil. 311 (1916); Compania General de Tabacos v. Government, 45 Phil. 663 (1924); Salgado v. Ramos, 64 Phil. 724 (1937); Bull v. Yatco, 67 Phil. 728 (1939); Santos vs. Santos, 92 Phil. 281 (1952) ; Froilan v. Pan Oriental Shipping Co., 95 Phil. 905 (1954); Angat River Irrigation v. Angat River Workers' Union, 102 Phil. 789 (1957); Concepcion, J., diss.; Lyons, Inc. v. United States of America, 104 Phil. 593 (1958); Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, L-23139, December 17, 1966, 18 SCRA 1120; Hartford Insurance Co. v. P. D. Marchessini & Co., L24544, November 15, 1967, 21 SCRA 860; Firemen's Fund Insurance Co. v. Maersk Line Far East Service, L-27189, March 28, 1969, 27 SCRA 519; Insurance Co. of North America v. Osaka Shosen Kaisha, L-22784, March 28, 1969, 27 SCRA 780; Providence Washington Insurance Co. v. Republic of the Philippines, L-26386, Sept. 30, 1969, 29 SCRA 598. 16 Alfonso v. Pasay City, 106 Phil. 1017, 1022-1023 (1960).