People v. Gozo, G.R. No.

L-36409, [October 26, 1973], 153 PHIL 216-226

Facts: Loreta Gozo seeks to set aside a judgment of the Court of First Instance of Zambales, convicting her of
a violation of an ordinance of Olongapo, Zambales, requiring a permit from the municipal mayor for the
construction or erection of a building (a house inside the United States Naval Reservation).

The City Court of Olongapo City found her guilty of violating Municipal Ordinance No. 14, Series of 1964 and
sentenced her to an imprisonment of one month as well as to pay the costs.

The Court of First Instance of Zambales, on appeal, found her guilty on the above facts of violating such
municipal ordinance but would sentence her merely to pay a fine of P200.00 and to demolish the house thus
erected.

Accordingly, the Court of Appeals, in a resolution of Juan 1973, noting the constitutional question raised, the
case to this Court.

Issue 1: Whether Loreta Gozo correctly relied on People v. Fajardo? No, the facts in the case of People
v. Fajardo are different.

Ruling 1: Contrary to the case of Fajardo, Loreta Gozo never bothered to comply with the ordinance. In the
case of Fajardo, his request for building permit was denied twice for the reason that it would destroy the view
or beauty of the public plaza. When Fajardo proceeded with the construction of the building without a permit, it
was because they needed a place of residence very badly, their former house having been destroyed by a
typhoon and they had been living on leased property.

Issue 2: Whether the United States Naval Reservation is within the territorial jurisdiction of the
Philippines?Yes, the area retains its status as native soil, and Gozo is not a contracting party to the
RP-US Military Bases Agreement.

Ruling 2: In the juristic concept of sovereignty discussed in Reagan v. CIR, "Nothing is better settled than that
the Philippines being independent and sovereign, its authority may be exercised over its entire domain. There
is no portion thereof that is beyond its power. Within its limits, its decrees are supreme, its commands
paramount. Its laws govern therein, and everyone to whom it applies must submit to its terms.” Therefore, the
bases under lease to the American armed forces by virtue of the military bases agreement of 1947, are not and
cannot be foreign territory.

Quoting Acierto (People v. Acierto) anew: "The carrying out of the provisions of the Bases Agreement is the
concern of the contracting parties alone. Whether, therefore, a given case which by the treaty comes within the
United States jurisdiction should be transferred to the Philippine authorities is a matter about which the
accused has nothing to do or say. In other words, the rights granted to the United States by the treaty insure
solely to that country and cannot be raised by the offender."
Vilas v. Manila, 220 U.S. 345 (1911)

Facts: The plaintiffs in error, who were plaintiffs below, are creditors of the city of Manila as it existed before
the cession of the Philippine Islands to the United States by the treaty of Paris, December 10, 1898. Upon the
theory that the city, under its present charter from the government of the Philippine Islands, is the same juristic
person and liable upon the obligations of the old city, these actions were brought against it.

The supreme court of the Philippine Islands denied relief, holding that the present municipality is a totally
different corporate entity, and in no way liable for the debts of the Spanish
municipality.

The paramount issue was: Whether, notwithstanding the cession of the Philippine Islands to the United States,
followed by a reincorporation of the city, the present municipality is liable for the obligations of the city incurred
prior to the cession to the United States. But the US Supreme Court decided to stick to the issue below.

Issue: Whether the plaintiffs in error are entitled to judgments against the city upon their several
claims?

Yes, the cession did not operate as an extinction or dissolution of corporations is herein recognized,
for the stipulation against impairment of their property rights has this plain significance.

Ruling: The contention that the liability of the city upon such obligations was destroyed by a mere change of
sovereignty is obviously one which is without a shadow of moral force, and, if true, must result from settled
principles of rigid law.

The juristic identity of the corporation has been in no wise affected, and, in law, the present city is, in every
legal sense, the successor of the old. As such it is entitled to the property and property rights of the
predecessor corporation, and is, in law, subject to all of its liabilities.

A review of the Aguado case: When the city was occupied by the American Army it was indebted to Aguado for
coal so supplied, as well as for the deposit so made.
Aguado is, nevertheless, entitled to a judgment when he sought to establish his claim as a charge against
certain property and funds held by the city as trustee, known as the Carriedo fund.The designation of the city in
the petition as trustee may be regarded as descriptive. The debt having been incurred by the city, it must be
regarded as a city liability.

Fallo: Our conclusion is that the decree in the Aguado Case must be reversed and the case remanded, with
direction to render judgment and such other relief as may seem in conformity with law. The judgments in the
Trigas and Vilas Cases will be reversed and the cases remanded, with direction to overrule the respective
demurrers, and for such other action as may be consistent with law, and consistent with this opinion.
Peralta v. Director of Prisons, G.R. No. L-49, [November 12, 1945], 75 PHIL 285-371

Facts: Petitioner-defendant, a member of the Metropolitan Constabulary of Manila charged with the
supervision and control of the production, procurement and distribution of goods and other necessaries as
defined in section 1 of Act No. 9 of the National Assembly of the so-called Republic of the Philippines.

William Peralta was prosecuted for the crime of robbery as defined and penalized by section 2 (a) of Act No.
65 of the same Assembly. He was found guilty and sentenced to life imprisonment, which he commenced to
serve on August 21, 1944, by the Court of Special and Exclusive Criminal Jurisdiction.

The petition for habeas corpus is based on the ground that the Court of Special and Exclusive Criminal
Jurisdiction created by Ordinance No. 7 "was a political instrumentality of the military forces of the Japanese
Imperial Army, the aims and political purposes of the Commonwealth of the Philippines, as well as those of the
United States of America, and therefore, null and void ab initio”.

Issue: Whether or not, by the principle of postliminy, the punitive sentence which petitioner is now serving fell
through or ceased to be valid from that time? Yes, the sentence which convicted the petitioner of a crime of a
political complexion must be considered as having ceased to be valid ipso facto upon the reoccupation or
liberation of the Philippines by General Douglas MacArthur.

Ruling: General Douglas MacArthur declared null and void all, laws, among them Act No. 65, of the so-called
Republic of the Philippines under which petitioner was convicted, in order to give retroactive effect to the
nullification of said penal act and invalidate the punitive sentence rendered against petitioner under said law, a
sentence which, before the proclamation, had already become null and of no effect.

We have already held in our recent decision in the case of Co Kim Cham vs. Valdez Tan Keh and Dizon, that
all judgment of political complexion of the courts during the Japanese regime, ceased to be valid upon
reoccupation of the islands by virtue of the principle or right of postliminium.

Fallo: In view of all the foregoing, the writ of habeas corpus prayed for is hereby granted and it is ordered that
the petitioner be released forthwith, without pronouncement as to costs. So ordered.
AGILA v LICHUACO

FACTS:

In 1994, a Memorandum of Understanding (MOU) was entered into by a consortium of private

In 1996, PASI requested the DOTC for official government confirmation of the assignment of Philippine orbital
slots 161 E (E is short for East Longitude) and 153 E to PASI for its AGILA satellites. DOTC Secretary
Lagdameo confirmed the assignment. PPASI then undertook preparations for the launching, operation and
management of its satellites.

However, respondent Lichauco, then DOTC Undersecretary for Communications, allegedly “embarked on a
crusade to malign the name of Michael de Guzman (PASI’s President and Chief Executive Officer) and
sabotage the business of PASI.” In a meeting with the members of the PASI BOD, she uttered disparaging
and defamatory comments against de Guzman.
De Guzman informed Jesli Lapuz (President of Landbank) that PASI will apply for a loan, Lapuz then wrote
Lichauco for confirmation. She falsely asserted that only orbital slot 161 E was assigned to plaintiff, orbital slot
153 E was not.
She made defamatory remarks against plaintiffs during a telecommunications forum held in the presence of
public officials and business executives.
She said that plaintiff corporation will never pay its contractors.
Coup de’ grace: she offered and awarded orbital slot 153 E to other parties despite the prior assignment to
PASI of the said slot.

RTC:
In 1998 a civil complaint (Injunction of the award, declaration of nullity of award, and damages) was filed
against Lichauco and the “Unknown Awardee” who was to be the recipient of orbital slot 153E.

Lichauco prayed for the dismissal of the complaint primarily on the grounds:
The suit is a suit against the State which may not be sued without its consent;
The complaint stated no cause of action;
The petitioners had failed to exhaust administrative remedies by failing to seek recourse with the Office of the
President.
RTC denied the motion to dismiss. The allegations in the complaint regarding the ultimate facts sufficiently
presented an ultra vires act of Lichauco, and that she was being sued in her personal capacity.

COURT OF APPEALS:
The CA sustained the contention that the complaint is a suit against the State:
The notice of offer signed by herein petitioner allegedly tainted with bad faith was done in the exercise of and
in pursuance of an official duty. Since the petitioner is directly under and answerable to the DOTC Secretary,
we can conclude that her official acts such as the said “notice of offer” was with the blessing and prior approval
of the DOTC Secretary himself. Being an official act, it is also protected by the presumption that the same was
performed in good faith and in the regular performance of official duty.

ISSUES:
Whether or not USEC Lichauco is immune from suit?
RULING:
No.
Sometimes, it is obvious that a suit is one against the State. The suit is directly initiated against the Republic of
the Philippines, any foreign government, or an unincorporated government agency.

The present action was denominated against Lichauco and the unknown awardee. Lichauco was identified in
the complaint as “acting Secretary of the DOTC”.
General rule:

A suit for acts done in the performance of official functions against an officer of the government by a private
citizen which would result in a charge against or financial liability to the government must be regarded as a suit
against the State itself, although it has not been formally impleaded.

Exception:
(1) If the government no longer has an interest to protect in the outcome of a suit;
(2) If the liability of the officer is personal because it arises from a tortious act in the performance of his/her
duties.

The Court of Appeal’s rationale is pure sophistry and must be rejected outright. The presumption of regular
performance of duty is disputable.

On the prayer for injunction of the award and declaration of nullity of the award:
The defense of state immunity from suit do not apply, these causes of action do not seek to impose a charge
or financial liability against the State, but merely the nullification of state action. The prayers attached to these
two causes of action are for the revocation of the Notice of Bid and the nullification of the purported award,
nothing more. Had it been so that petitioner additionally sought damages in relation to said causes of action,
the suit would have been considered as one against the State. Had the petitioner impleaded the DOTC itself,
an unincorporated government agency, and not Lichauco herself, the suit would have been considered as one
against the State.

On the prayer for Damages:

The rule is that if the judgment against government 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.

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. The rationale for this ruling is that the doctrine of state immunity
cannot be used as an instrument for perpetrating an injustice.”

If the complaints are proven, they would establish liability on the part of Lichauco that is not shielded by the
doctrine of state immunity from suit. To establish such assertions as facts, a full-blown trial on the merits would
be necessary.
Petition is granted. The Regional Trial Court is ordered to try and decide the case on the merits with deliberate
dispatch.

OTHER NOTES:
The case was decided by the Court of appeals in 1998, the case was revived and elevated to the Supreme
Court in 2005 or seven years later. By then, Lichauco is one of the leading critics of GMA especially in the
issue of the credibility of the 2004 election. This case was seen as a political move to harass Lichauco.
REPUBLIC OF THE PHILIPPINES, et al., petitioners,
vs.
HON. EDILBERTO G. SANDOVAL, Regional Trial Court of Manila, Branch IX, et al., respondents.
220 SCRA 124
March 19, 1993

FACTS:
By reason of the Mendiola massacre, wherein 12 rallyists died in their quest for ―genuine agrarian reform,
President Aquino issued Administrative Order No.11 which created the Citizen‘s Mendiola Commission for the
purpose of conducting an investigation for the disorders, death and casualties that took place. The most
significant recommendation of the Commission was for the deceased and other victims of Mendiola incident to
be compensated by the government. Due to the recommendation, petitioners filed a formal letter of demand for
compensation from the government to which the latter did not take heed. The group then instituted an action
for damages against the Republic of the Philippines together with military officers and personnel involved in
Mendiola incident. Respondent Judge Sandoval dismissed the complaint as against the Republic of the
Philippines on the basis that there was no waver by the state. Hence, the petition for certiorari.

ISSUE:
Whether the State by virtue of the administrative order waived its immunity from suit?

HELD:
NO. Firstly, recommendation made by the commission does not in any way mean that liability automatically
attaches to the state. In effect, the same shall only serve as a cause of action on the event that any party
decides to litigate his or her claim. The commission is merely a preliminary venue.
Secondly, whatever acts or utterances that then President Aquino may have said or done the same are not
tantamount to the state having waived its immunity from suit. The principle of state immunity from suit does not
apply in this case, as when the relief demanded by the suit requires no affirmative official action on the part of
the state nor the affirmative discharge of any obligation which belongs to the state in its political capacity, even
though the officers or agents who are made defendants claim to hold or act only by virtue of a title of the state
and as its agents and servants.
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.
162 SCRA 88
June 10, 1988

FACTS:
Private respondents Anthony Rossi and Ralph Wyers (deceased) were both employed as game room
attendants in the special services department of the US Naval Station (NAVSTA). They were advised that their
employment had been converted from permanent full-time to permanent part-time. Their reaction was to
protect the conversion and to institute grievance proceedings. The hearing officer recommended the
reinstatement of private respondents to permanent full-time status plus back wages.

In a letter addressed to petitioner Moreau, Commanding Officer of Subic Naval Base, petitioner Sanders,
Special Services Director of NAVSTA, disagreed with the recommendation and asked for its rejection.
Moreau, even before the start of the grievance hearings, sent a letter to the Chief of Naval Personnel
explaining the change of the private respondent‘s status and requested concurrence therewith.

Private respondents filed suit for damages claiming that the letters contained libelous imputations that had
exposed them to ridicule and had caused them mental anguish, and prejudgment of the grievance proceedings
was an invasion of their personal and proprietary rights. They make it clear that petitioners were being sued in
their personal capacity. A motion to dismiss on the ground of lack of jurisdiction was filed by the petitioner and
was denied.

ISSUE:

Were the petitioners performing their official duties when they did the acts for which they are being sued for
damages?

HELD:

YES. It is 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.

The act of Moreau is deadly official in nature, performed by him as the immediate superior of Sanders and
directly answerable to Naval Personnel in matters involving the special department of NAVSTA.
 REPUBLIC OF INDONESIA vs. JAMES VINZON G.R. No. 154705 June 26, 2003 act jure imperii,
diplomatic mission, International Law, Section 2 of the 1987 Constitution, Sovereign Immunity From
Suit, Vienna Convention on Diplomatic Relations
OCTOBER 6, 2017

FACTS:

Petitioner, Republic of Indonesia, entered into a Maintenance Agreement with respondent James Vinzon, sole
proprietor of Vinzon Trade and Services. The agreement stated that respondent shall, for a consideration,
maintain specified equipment at the Embassy Main Building, Embassy Annex Building and the Wisma Duta,
the official residence of petitioner Ambassador Soeratmin. The equipments covered by the agreement are air
conditioning units, generator sets, electrical facilities, water heaters, and water motor pumps. The agreement
shall be effective for a period of four years and will renew itself automatically unless cancelled by either party
by giving thirty days prior written notice from the date of expiry.

Petitioners claim that prior to the date of expiration of the said agreement, they informed respondent that the
renewal of the agreement shall be at the discretion of the incoming Chief of Administration, who allegedly
found respondents work and services unsatisfactory and not in compliance with the standards set in the
Agreement. Hence, the Indonesian Embassy terminated the agreement. Petitioners claim that they had earlier
verbally informed respondent of their decision to terminate the agreement.

On the other hand, respondent claims that the aforesaid termination was arbitrary and unlawful.

Hence, respondent filed a complaint in the (RTC) of Makati. Petitioners filed a Motion to Dismiss, alleging that
the Republic of Indonesia, as a foreign sovereign State, has sovereign immunity from suit and cannot be sued
as a party-defendant in the Philippines. The said motion further alleged that Ambassador Soeratmin and
Minister Counsellor Kasim are diplomatic agents as defined under the Vienna Convention on Diplomatic
Relations and therefore enjoy diplomatic immunity.

In turn, respondent filed an Opposition to the said motion alleging that the Republic of Indonesia has expressly
waived its immunity from suit. He based this claim upon the following provision in the Maintenance Agreement:

Any legal action arising out of this Maintenance Agreement shall be settled according to the laws of the
Philippines and by the proper court of Makati City, Philippines.

Respondents Opposition likewise alleged that Ambassador Soeratmin and Minister Counsellor Kasim can be
sued and held liable in their private capacities for tortious acts done with malice and bad faith.

The trial court denied herein petitioners Motion to Dismiss. It likewise denied the Motion for Reconsideration
subsequently filed.

The trial courts denial of the Motion to Dismiss was brought up to the CA in a petition for certiorari and
prohibition alleging that the trial court gravely abused its discretion in ruling that the Republic of Indonesia gave
its consent to be sued and voluntarily submitted itself to the laws and jurisdiction of Philippine courts and that
petitioners Ambassador Soeratmin and Minister Counsellor Kasim waived their immunity from suit.

The CA rendered its assailed decision denying the petition for lack of merit. It denied herein petitioners MR.
ISSUE:

Whether the CA erred in sustaining the trial court’s decision that petitioners have waived their immunity from
suit by using as its basis the abovementioned provision in the Maintenance Agreement.

RULING:

The petition is impressed with merit.

International law is founded largely upon the principles of reciprocity, comity, independence, and equality of
States which were adopted as part of the law of our land under Article II, Section 2 of the 1987 Constitution.

The rule that a State may not be sued without its consent is a necessary consequence of the principles of
independence and equality of States. As enunciated in Sanders v. Veridiano II, the practical justification for the
doctrine of sovereign immunity is that there can be no legal right against the authority that makes the law on
which the right depends.

In the case of foreign States, the rule is derived from the principle of the sovereign equality of States, as
expressed in the maxim par in parem non habet imperium. All states are sovereign equals and cannot assert
jurisdiction over one another. A contrary attitude would unduly vex the peace of nations.

The rules of International Law, however, are neither unyielding nor impervious to change. The increasing need
of sovereign States to enter into purely commercial activities remotely connected with the discharge of their
governmental functions brought about a new concept of sovereign immunity. This concept, the restrictive
theory, holds that the immunity of the sovereign is recognized only with regard to public acts or acts jure
imperii, but not with regard to private acts or acts jure gestionis.

In United States v. Ruiz, for instance, we held that the conduct of public bidding for the repair of a wharf at a
United States Naval Station is an act jure imperii. On the other hand, we considered as an act jure gestionis
the hiring of a cook in the recreation center catering to American servicemen and the general public at the
John Hay Air Station in Baguio City, as well as the bidding for the operation of barber shops in Clark Air Base
in Angeles City.

Apropos the present case, the mere entering into a contract by a foreign State with a private party cannot be
construed as the ultimate test of whether or not it is an act jure imperii or jure gestionis. Such act is only the
start of the inquiry. Is the foreign State engaged in the regular conduct of a business? If the foreign State is not
engaged regularly in a business or commercial activity, and in this case it has not been shown to be so
engaged, 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.

Hence, the existence alone of a paragraph in a contract stating that any legal action arising out of the
agreement shall be settled according to the laws of the Philippines and by a specified court of the Philippines is
not necessarily a waiver of sovereign immunity from suit. The aforesaid provision contains language not
necessarily inconsistent with sovereign immunity. On the other hand, such provision may also be meant to
apply where the sovereign party elects to sue in the local courts, or otherwise waives its immunity by any
subsequent act. The applicability of Philippine laws must be deemed to include Philippine laws in its totality,
including the principle recognizing sovereign immunity. Hence, the proper court may have no proper action, by
way of settling the case, except to dismiss it.

Submission by a foreign state to local jurisdiction must be clear and unequivocal. It must be given explicitly or
by necessary implication. We find no such waiver in this case.
Respondent concedes that the establishment of a diplomatic mission is a sovereign function. On the other
hand, he argues that the actual physical maintenance of the premises of the diplomatic mission, such as the
upkeep of its furnishings and equipment, is no longer a sovereign function of the State.

We disagree. There is no dispute that the establishment of a diplomatic mission is an act jure imperii. A
sovereign State does not merely establish a diplomatic mission and leave it at that; the establishment of a
diplomatic mission encompasses its maintenance and upkeep. Hence, the State may enter into contracts with
private entities to maintain the premises, furnishings and equipment of the embassy and the living quarters of
its agents and officials. It is therefore clear that petitioner Republic of Indonesia was acting in pursuit of a
sovereign activity when it entered into a contract with respondent for the upkeep or maintenance of the air con
units, generator sets, electrical facilities, water heaters, and water motor pumps of the Indonesian Embassy
and the official residence of the Indonesian ambassador.

The Solicitor General submits that, the Maintenance Agreement was entered into by the Republic of Indonesia
in the discharge of its governmental functions. In such a case, it cannot be deemed to have waived its
immunity from suit. As to the paragraph in the agreement relied upon by respondent, the Solicitor General
states that it was not a waiver of their immunity from suit but a mere stipulation that in the event they do waive
their immunity, Philippine laws shall govern the resolution of any legal action arising out of the agreement and
the proper court in Makati City shall be the agreed venue thereof.

On the matter of whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim may be
sued herein in their private capacities, Article 31 of the Vienna Convention on Diplomatic Relations provides:

1. A diplomatic agent shall enjoy immunity from the criminal jurisidiction of the receiving State. He shall also
enjoy immunity from its civil and administrative jurisdiction, except in the case of:

(a) a real action relating to private immovable property situated in the territory of the receiving State, unless he
holds it on behalf of the sending State for the purposes of the mission;

(b) an action relating to succession in which the diplomatic agent is involved as executor, administrator, heir or
legatee as a private person and not on behalf of the sending State;

(c) an action relating to any professional or commercial activity exercised by the diplomatic agent in the
receiving State outside his official functions.

The act of petitioners Ambassador Soeratmin and Minister Counsellor Kasim in terminating the Maintenance

is not covered by the exceptions provided in the abovementioned provision.

The Solicitor General believes that said act may fall under subparagraph (c) thereof, but said provision clearly
applies only to a situation where the diplomatic agent engages in any professional or commercial activity
outside official functions, which is not the case herein.

The petition was GRANTED.

All the funds going into the possession of the UP, including any interest accruing from the deposit of such
funds in any banking institution, constitute a “special trust fund,” the disbursement of which should always be
aligned with the UP’s mission and purpose, and should always be subject to auditing by the COA. Hence, the
funds subject of this action could not be validly made the subject of the RTC’s writ of execution or garnishment.
The adverse judgment rendered against the UP in a suit to which it had impliedly consented was not
immediately enforceable by execution against the UP, because suability of the State did not necessarily mean
its liability.

FACTS:
UP failed to pay in a contract it entered with Stern Builders Corporation. The RTC ruled in favour of Stern
Builders Corporation. Consequently, the RTC authorized eventually the release of the garnished funds of the
UP directing DBP to release the funds. While UP brought a petition for certiorari in the CA to challenge the
jurisdiction of the RTC in issuing the order averring that the UP funds, being government funds and properties,
could not be seized by virtue of writs of execution or garnishment.

ISSUE:
Whether UP funds are subject to garnishment.

RULING:
NO. The UP is a government instrumentality, performing the State’s constitutional mandate of promoting
quality and accessible education.

Presidential Decree No. 1445 defines a “trust fund” as a fund that officially comes in the possession of an
agency of the government or of a public officer as trustee, agent or administrator, or that is received for the
fulfillment of some obligation. A trust fund may be utilized only for the “specific purpose for which the trust was
created or the funds received.” The funds of the UP are government funds that are public in character. They
include the income accruing from the use of real property ceded to the UP that may be spent only for the
attainment of its institutional objectives. Hence, the funds subject of this action could not be validly made the
subject of the RTC’s writ of execution or garnishment. The adverse judgment rendered against the UP in a suit
to which it had impliedly consented was not immediately enforceable by execution against the UP, because
suability of the State did not necessarily mean its liability. A marked distinction exists between suability of the
State and its liability.

As the Court succinctly stated in Municipality of San Fernando, La Union v. Firme: A distinction should first be
made between suability and liability. “Suability depends on the consent of the state to be sued, liability on the
applicable law and the established facts. The circumstance that a state is suable does not necessarily mean
that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is
not conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its
sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable.

The CA and the RTC thereby unjustifiably ignored the legal restriction imposed on the trust funds of the
Government and its agencies and instrumentalities to be used exclusively to fulfill the purposes for which the
trusts were created or for which the funds were received except upon express authorization by Congress or by
the head of a government agency in control of the funds, and subject to pertinent budgetary laws, rules and
regulations. Indeed, an appropriation by Congress was required before the judgment that rendered the UP
liable for moral and actual damages (including attorney’s fees) would be satisfied considering that such
monetary liabilities were not covered by the “appropriations earmarked for the said project.” The Constitution
strictly mandated that “(n)o money shall be paid out of the Treasury except in pursuance of an appropriation
made by law.”
 US vs. Reyes

G.R. No. 79253, March 1, 1993

FACTS: Nelia T. Montoya, an American citizen employed as an identification checker at the U.S. Navy
Exchange (NEX) at the Joint United States Military Assistance Group (JUSMAG) headquarters in Quezon City,
filed a complaint against Maxine Bradford, also an American citizen working as a manager at JUSMAG
Headquarter’s activity exchange, for damages due to the oppressive and discriminatory acts committed by the
latter in excess of her authority as store manager of the NEX JUSMAG.

This was due to the incident on January 22, 1987 when Bradford searched Montoya’s body and belongings
while the latter was already in the parking area after buying some items NEX JUSMAG’s retail store, where
she had purchasing privileges. To support the motion, the petitioners claimed that checking of purchases is a
routine procedure observed at base retail outlets to protect and safeguard merchandise, cash, and equipment
pursuant to paragraphs 2 and 4(b) of NAVRESALEACT SUBIC INST. 5500.1. 7. Therefore, Bradford’s order to
check all employee purchases was done in the exercise of her duties as Manager of the NEX-JUSMAG.

ISSUE: Whether or not Bradford enjoys diplomatic immunity.

HELD: No. Under Art. 16(b) of the 1953 Military Assistance Agreement creating the JUSMAG, “only the Chief
of the Military Adviser Group and not more than six other senior members thereof designated under by him will
be accorded diplomatic immunity”.

The court also ruled that Art. 31 of the Vienna Convention on Diplomatic Relations provided an exception;
stating that even diplomatic agents who enjoy immunity are liable if they perform any professional or
commercial activity outside his official functions. Therefore, since Bradford works as NEX-JUSMAG’s Manager,
she is not among those officers granted diplomatic immunity.
WYLIE V RARANG

PETITIONERS: M. H. Wylie and Capt. James Williams

DOCTRINE: Public officials can be held personally accountable for acts claimed to have been performed in
connection with official duties where they have acted ultra vires or where there is showing of bad faith.
Although in this case there was no bad faith, the negligence of the respondents cannot be deemed part of their
official duties. Such act or omission was ULTRA VIRES and CANNOT be deemed part of official duty. It was a
TORTIOUS ACT which ridiculed the PR.

FACTS: Petitioner M.H. Wylie was the assistant administrative officer while petitioner Capt. James Williams
was the commanding officer of the US Naval Base in Subic Bay, Olongapo City. Private Respondent (PR)
Aurora Rarang was assigned as merchandise control guard in the Office of the Provost Marshal. M.H. Wylie, in
his capacity as asst. admin. Officer, supervised the publication of the so-called “Plan of the Day” (POD)
published daily by the US Naval Base Station.

The POD featured important announcements, necessary precautions and general matters of interest to military
personnel. One of the regular features of the POD was the “action line inquiry” (NAVSTA ACTION
LINEINQUIRY), a telephone answering device in the Office of the Admin Asst intended to provide personnel
access to the Commanding Officer on matters they feel should be brought to his attention for correction or
investigation.

On February 3, 1978, the POD under the (NAVSTA) action line inquiry, published and mentioned a certain
“AURING” as “…a disgrace to her division and to the Office of the Provost Marshal. The same article explicitly
implied that Auring was consuming and appropriating for herself confiscated items like food and cigarettes. The
Private Respondents was the only one who was named “Auring” in the Office of the Provost Marshal. As a
result thereof, she was investigated by her superior.

Pertinent part of the said publication is quoted below: “I have observed that Merchandise Control inspector/
inspectress are (sic) consuming for their own benefit things they have confiscated from Base Personnel. The
observation is even more aggravated by consuming such confiscated items as cigarettes and food stuffs
PUBLICLY.

This is not to mention ‘Auring’ who is in herself, a disgrace to her division and to the Office of the Provost
Marshal. In lieu of this observation, may I therefore, ask if the head of the Merchandise Control Division is
aware of this malpractice?” The PR commenced an ACTION FOR DAMAGES in the CFI of Zambales against
M.H. Wylie, Capt. James Williams and the US Naval Base alleging that the article constituted false, injurious,
and malicious defamation and libel tending to impeach her honesty, virtue and reputation exposing her to
public hatred, contempt and ridicule.

The TC ruled in favour of the PR. The IAC (now,CA) affirmed the judgment of the TC with modifications as to
the amount of damages awarded. Defendants argue that the claimed tortious act was done in the performance
of their office and thus they should be covered by the principle of state immunity from suit.

ISSUE: Whether or not the American naval officers (such as Wylie and Capt. Williams) who commit a crime or
tortious act while discharging official functions still covered by the principle of state immunity from suit. Does
the grant of rights, power, and authority to the US under the RP-US Bases Treaty cover immunity of its officers
from crimes and torts?
HELD: The general rule is that public officials can be held personally accountable for acts claimed to have
been performed in connection with official duties where they have acted ultra vires or where there is showing of
bad faith (Chavezv. Sandiganbayan).

It may be argued, as a general rule, that Capt. Williams as commanding officer of the naval base was far
removed in the chain of command from the offensive publication and it would be asking too much to hold him
responsible for everything which goes wrong on the base. However, in this particular case, the records show
that the offensive publication was sent to the commanding officer for approval and that he approved it.

ART. 2176, CC prescribes a civil liability for damages caused by a person’s act or omission constituting fault or
negligence, stating that,
“Whoever by act or omission, causes damage to another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence,..”

Moreover, ART. 2219(7), Civil Code provides that moral damages may be recovered in case of libel, slander or
any other form of defamation.” Indeed, the imputation of theft contained in the POD was a defamation against
the character and reputation of the PR.

Petitioner Wylie himself admitted that the Office of the Provost Marshal explicitly recommended the deletion of
the name “Auring” if the article will be published. The petitioners, however, were NEGLIGENT because under
their direction, they issued the publication without deleting the said name.

Such act or omission was ULTRA VIRES and CANNOT be deemed part of official duty. It was a TORTIOUS
ACT which ridiculed the PR. As a result of petitioner’s act, PR suffered besmirched reputation, serious anxiety,
wounded feelings and social humiliation, especially so, since the article was baseless and false. The
petitioners, alone, in their personal capacities, are liable for the damages they caused the Private Respondent