D.

Sovereignty

 “Sovereignty” is the supreme and uncontrollable power inherent in a State by

which it is governed.

There are two kinds of sovereignty; (As to nature)

1. Legal sovereignty - the authority or the power to issue final commands.

2. Political sovereignty - is the power behind the legal sovereign, or the sum
total of the influences that operate upon it.

Sovereignty may also be; (As to extent)

1. Internal sovereignty refers to the power of the State to control its domestic
affairs.

2. External sovereignty, which is the power of the State to direct its relations
with other States, is also known as independence. xxx" (Cruz.)

"The supreme power of the State to govern persons and things within its territory”
and “AUTO LIMITATION”.

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. That is the extent of its jurisdiction,
both territorial and personal. Necessarily, likewise, it has to be exclusive. If it
were not thus, there is a diminution of its sovereignty.

It is to be admitted that any state may, by its consent, express or implied, submit
to a restriction of its sovereign rights. There may thus be a curtailment of what
otherwise is a power plenary in character. 1

That is the concept of sovereignty as auto-limitation, which, in the succinct

language of Jellinek, "is the property of a state-force due to which it has the
exclusive capacity of legal self-determination and self-restriction."2

A state then, if it chooses to, may refrain from the exercise of what otherwise is
illimitable competence.

 Dominium and Imperium

"Imperiumrefers to the State's authority to govern. It covers such activities as

passing laws governing a territory, maintaining peace and order over it, and
defending it against foreign invasion. When the State act in this capacity jure imperii,
it generally enjoys sovereign immunity.

This governmental function includes services that only the government does, such as
restaurant inspection, animal control, health and safety permits and licenses,
sanitation and related functions.

Dominium refers to the capacity of the State to own property. It covers such rights
as title to land, exploitation and use of it, and disposition or sale of the same. The

1
G.R. No. L-26379 December 27, 1969 WILLIAM C. REAGAN, ETC., vs. COMMISSIONER OF INTERNAL REVENUE,
respondent
2
Jellinek as quoted in Cohen, Recent Theories of Sovereignty, p. 35 (1937).

Political Law 1 2023 Atty. Edgar Pascua II

Regalian doctrine whereby all lands of the public domain belong to the State, and
anyone claiming title has the burden to show ownership, comes within this concept.
In this capacity jure gestium, the State descends to the status of ordinary persons
and thus becomes liable as such." (Mendoza notes.)

A proprietary function is one that a private entity can perform, and is not uniquely
for the benefit of the general public.

Rule: As there are overtones indicative of skepticism, if not of outright rejection, of the well-known
distinction in public law between the government authority possessed by the state which is
appropriately embraced in the concept of sovereignty, and its capacity to own or acquire property,
it is not inappropriate to pursue the matter further. The former comes under the heading of
imperium and the latter of dominium. The use of this term is appropriate with reference to lands
held by the state in its proprietary character. In such capacity, it may provide for the exploitation
and use of lands and other natural resources, including their disposition, except as limited by the
Constitution. Dean Pound did speak of the confusion that existed during the medieval era between
such two concepts, but did note the existence of res publicae as a corollary to dominium." As far
as the Philippines was concerned, there was a recognition by Justice Holmes in Cariño v. Insular
Government, a case of Philippine origin, that "Spain in its earlier decrees embodied the universal
feudal theory that all lands were held from the Crown...." That was a manifestation of the concept
of jura regalia, which was adopted by the present Constitution, ownership however being vested
in the state as such rather than the head thereof. G.R. No. L-30389 December 27, 1972 PEDRO
LEE HONG HOK vs. ANIANO DAVID

1. Sovereign Immunity

a. Basis

Constitutional Support - ARTICLE XVI, Section 3.

The doctrine, not too infrequently, is derisively called ‘the royal prerogative of
dishonesty’ because it grants the state the prerogative to defeat any legitimate claim
against it by simply invoking its nonsuability.3

“The State may not be sued without its consent4”

Theoretical support5– (Positivist and Sociological): The rule that a state may not be
sued without its consent is embodied in Section 3, Article XVI of the 1987 Constitution
and has been an established principle that antedates this Constitution. It is as well a
universally recognized principle of international law that exempts a state and its
organs from the jurisdiction of another state. The principle is based on the very
essence of sovereignty, and on the practical ground that there can be no legal right
as against the authority that makes the law on which the right depends.6It also rests
on reasons of public policy — that public service would be hindered, and the public
endangered, if the sovereign authority could be subjected to law suits at the instance
of every citizen and, consequently, controlled in the uses and dispositions of the
means required for the proper administration of the government.7

Case: On July 3, 1961, a decision was rendered in Special Proceedings No. 2156-R in favor of
respondents P. J. Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation,
and against the petitioner herein, confirming the arbitration award in the amount of P1,712,396.40,

3
G.R. No. 182358 February 20, 2013 DEPARTMENT OF HEALTH, THE SECRETARY OF HEALTH, and MA. MARGARITA M.
GALON vs. PHIL PHARMA WEALTH, INC
4
The constitutional doctrine of Non-suability of the State, otherwise known as the Royal Prerogative of Dishonesty. G.R.
No. 186192 August 25, 2010 THE HEIRS OF MATEO PIDACAN AND ROMANA vs. AIR TRANSPORTATION OFFICE
5
G.R. No. 155504 June 26, 2009 PROFESSIONAL VIDEO, INC., vs. TECHNICAL EDUCATION AND SKILLS DEVELOPMENT
AUTHORITY
6
Positivist theory
7
Sociological Theory

Political Law 1 2023 Atty. Edgar Pascua II

subject of Special Proceedings. On June 24, 1969, respondent Honorable Guillermo P. Villasor,
issued an Order declaring the aforestated decision of July 3, 1961 final and executory, directing
the Sheriffs of Rizal Province, Quezon City as well as Manila to execute the said decision.
Pursuant to the said Order dated June 24, 1969, the corresponding Alias Writ of Execution was
issued dated June 26, 1969, .... On the strength of the afore-mentioned Alias Writ of Execution
dated June 26, 1969, the Provincial Sheriff of Rizal served notices of garnishment dated June 28,
1969 with several Banks, especially on the "monies due the Armed Forces of the Philippines in
the form of deposits sufficient to cover the amount mentioned in the said Writ of Execution"; the
Philippine Veterans Bank received the same notice of garnishment on June 30, 1969 .... The
funds of the Armed Forces of the Philippines on deposit with the Banks, particularly, with the
Philippine Veterans Bank and the Philippine National Bank [or] their branches are public funds
duly appropriated and allocated for the payment of pensions of retirees, pay and allowances of
military and civilian personnel and for maintenance and operations of the Armed Forces of the
Philippines, as per Certification dated July 3, 1969 by the AFP Controller,..." . The paragraph
immediately succeeding in such petition then alleged: " Respondent Judge, Honorable Guillermo
P. Villasor, acted in excess of jurisdiction [or] with grave abuse of discretion amounting to lack of
jurisdiction in granting the issuance of an alias writ of execution against the properties of the
Armed Forces of the Philippines, hence, the Alias Writ of Execution and notices of garnishment
issued pursuant thereto are null and void." In the answer filed by respondents, through counsel
Andres T. Velarde and Marcelo B. Fernan, the facts set forth were admitted with the only
qualification being that the total award was in the amount of P2,372,331.40.

Rule: It is a fundamental postulate of constitutionalism flowing from the juristic concept of

sovereignty that the state as well as its government is immune from suit unless it gives its consent.
It is readily understandable why it must be so. In the classic formulation of Holmes: "A sovereign
is exempt from suit, not because of any formal conception or obsolete theory, but on the logical
and practical ground that there can be no legal right as against the authority that makes the law
on which the right depends." Sociological jurisprudence supplies an answer not dissimilar. So it
was indicated in a recent decision, Providence Washington Insurance Co. v. Republic of the
Philippines, with its affirmation that "a continued adherence to the doctrine of non-suability is not
to be deplored for as against the inconvenience that may be caused private parties, the loss of
governmental efficiency and the obstacle to the performance of its multifarious functions are far
greater if such a fundamental principle were abandoned and the availability of judicial remedy
were not thus restricted. With the well known propensity on the part of our people to go to court,
at the least provocation, the loss of time and energy required to defend against law suits, in the
absence of such a basic principle that constitutes such an effective obstacle, could very well be
imagined."

"The State may not be sued without its consent." A corollary, both dictated by logic and sound
sense from a basic concept is that public funds cannot be the object of a garnishment proceeding
even if the consent to be sued had been previously granted and the state liability adjudged.
Disbursements of public funds must be covered by the corresponding appropriation as required
by law. The functions and public services rendered by the State cannot be allowed to be paralyzed
or disrupted by the diversion of public funds from their legitimate and specific objects, as
appropriated by law."Republic v. Villasor, 54 SCRA 83 (1973.)

Availability to foreign States

The Montevideo Convention on the Rights and Duties of States (1933-12-26) provides
that;

Article 4. States are juridically equal, enjoy the same rights, and have equal
capacity in their exercise. The rights of each one do not depend upon the power
which it possesses to assure its exercise, but upon the simple fact of its
existence as a person under international law.

Article 5. The fundamental rights of states are not susceptible of being affected
in any manner whatsoever.

Thus, under the principle of “par in parem non habet imperium” (An equal has no
power over an equal), a state cannot assert itself over another.

Political Law 1 2023 Atty. Edgar Pascua II

Rule: In this jurisdiction, we recognize and adopt the generally accepted principles of international
law as part of the law of the land. Immunity of State from suit is one of these universally recognized
principles. In international law, "immunity" is commonly understood as an exemption of the state
and its organs from the judicial jurisdiction of another state. This is anchored on the principle of
the sovereign equality of states under which one state cannot assert jurisdiction over another in
violation of the maxim par in parem non habet imperium (an equal has no power over an equal)
G.R. No. 108813 December 15, 1994 JUSMAG PHILIPPINES, vs. THE NATIONAL LABOR
RELATIONS COMMISSION (Second Division) and FLORENCIO SACRAMENTO, Union
President, JPFCEA

Rule: As things stand in the international sphere, the immunity of the state (and by extension, its
agents, in the performance of their governmental functions Jure imperii) must stand against even
serious violations of international law, including breaches of international environmental law
(which is an aspect of human rights law as well). The ICJ concluded that

x x x [U]nder customary international law as it presently stands, a State is not deprived of immunity
by reason of the fact that it is accused of serious violations of international human rights law or
the international law of armed conflict. In reaching that conclusion, the Court must emphasize that
it is addressing only the immunity of the State itself from the jurisdiction of the courts of other
States; the question of whether, and if so to what extent, immunity might apply in criminal
proceedings against an official present case.

This does not mean that the act of the state is to be considered lawful. However, this also does
not mean that state immunity is waived in the context of an international breach of even a jus
cogens8norm, as explained in this manner:

The rules of State immunity are procedural in character and are confined to determining whether
or not the courts of one State may exercise jurisdiction in respect of another State. They do not
bear upon the question whether or not the conduct in respect of which the proceedings are
brought was lawful or unlawful. That is why the application of the contemporary law of State
immunity to proceedings concerning events which occurred in 1943-1945 does not infringe the
principle that law should not be applied retrospectively to determine matters of legality and
responsibility (as the Court has explained in paragraph 58 above). For the same reason,
recognizing the immunity of a foreign State in accordance with customary international law does
not amount to recognizing as lawful a situation created by the breach of a jus cogens rule, or
rendering aid and assistance in maintaining that situation, and so cannot contravene the principle
in Article 41 of the International Law Commission’s Articles on State Responsibility.
CONCLUSION OF JURISDICTIONAL ARGUMENTS AND IMMUNITY.

What the Court is left to work with is a process by which jurisdiction and immunity can be
determined by answering several questions, summated thusly:

1. Is the act of the foreign national or entity an act Jure imperii, such that it can be considered an
act of state entitled to immunity, or an actjure gestionis, in which case it is to be considered a
private act?

2. In respect of the above question, has the executive branch, in the exercise of its political
power, determined whether absolute diplomatic immunity is applicable?

8
Jus cogens (from Latin: compelling law; English: peremptory norm) refers to certain fundamental, overriding principles
of international law, from which no derogation is ever permitted. See Ian Brownlie, Principles of Public International Law
(5th ed., Oxford, 1998).
That body of peremptory principles or norms from which no derogation is permitted; those norms recognized by the
international community as a whole as being fundamental to the maintenance of an international legal order. Elementary
rules that concern the safeguarding of peace and notably those that prohibit recourse to force or the threat of force.
Norms of a humanitarian nature are included, such as prohibitions against Genocide, Slavery, and racial discrimination.
Jus cogens may, therefore, operate to invalidate a treaty or agreement between states to the extent of the inconsistency
with any such principles or norms.

Political Law 1 2023 Atty. Edgar Pascua II

3. If it is an actjure imperii and thus entitled to sovereign immunity, does an exception apply to
withdraw the immunity privilege of such acts? G.R. No. 206510 September 16, 2014 MOST REV.
PEDRO D. ARIGO vs. SCOTT H. SWIFT

Civil Law Basis

Well-settled is the maxim that damage resulting from the legitimate exercise of a
person's rights is a loss without injury- DAMNUM ABSQUE INJURIA - for which the
law gives no remedy. In other words, one who merely exercises one's rights does no
actionable injury and cannot be held liable for damages.9

b. When is a suit against the State?

Regardless of who is named as the defendant, when it produces adverse

consequences to the public treasury in terms of disbursement of public funds and
loss of government property. It cannot prosper unless the State has given its consent.

Case: PBAC recommended that TESDA enter into a negotiated contract with PROVI. On
December 29, 1999, TESDA and PROVI signed and executed their "Contract Agreement Project:
PVC ID Card Issuance" (the Contract Agreement) for the provision of goods and services in the
printing and encoding of PVC cards. According to PROVI, it delivered the items subject to the
agreement to TESDA.

PROVI alleged that out of TESDA’s liability of P39,475,000.00, TESDA paid PROVI only
P3,739,500.00, leaving an outstanding balance of P35,735,500.00, as evidenced by PROVI’s
Statement of Account. Despite the two demand letters dated March 8 and April 27, 2001 that
PROVI sent TESDA, the outstanding balance remained unpaid.

PROVI filed with the RTC a complaint for sum of money with damages against TESDA. The RTC
granted PROVI’s prayer and issued a writ of preliminary attachment against the properties of
TESDA not exempt from execution in the amount of P35,000,000.00. TESDA responded on July
24, 2001 by filing a Motion to Discharge/Quash the Writ of Attachment, arguing mainly that public
funds cannot be the subject of garnishment. The RTC denied TESDA’s motion. Faced with these
rulings, TESDA filed a Petition for Certiorari with the CA to question the RTC orders. The CA set
aside the RTC’s orders

Rule: TESDA is an instrumentality of the government undertaking governmental functions. Its

funds are public in character, hence exempt from attachment or garnishment.

Under these terms, both constitutional and statutory, we do not believe that the role and status of
TESDA can seriously be contested: it is an unincorporated instrumentality of the government,
directly attached to the DOLE through the participation of the Secretary of Labor as its Chairman,
for the performance of governmental functions – i.e., the handling of formal and non-formal
education and training, and skills development. As an unincorporated instrumentality operating
under a specific charter, it is equipped with both express and implied powers, and all State
immunities fully apply to it.

TESDA, as an agency of the State, cannot be sued without its consent.

The rule that a state may not be sued without its consent is embodied in Section 3, Article XVI of
the 1987 Constitution and has been an established principle that antedates this Constitution. It is
as well a universally recognized principle of international law that exempts a state and its organs
from the jurisdiction of another state. The principle is based on the very essence of sovereignty,
and on the practical ground that there can be no legal right as against the authority that makes
the law on which the right depends. It also rests on reasons of public policy — that public service
would be hindered, and the public endangered, if the sovereign authority could be subjected to
law suits at the instance of every citizen and, consequently, controlled in the uses and dispositions
of the means required for the proper administration of the government.

9
G.R. No. 140420 February 15, 2001 SERGIO AMONOY vs. Spouses JOSE GUTIERREZ and ANGELA FORNIDA

Political Law 1 2023 Atty. Edgar Pascua II

The proscribed suit that the state immunity principle covers takes on various forms, namely:

1. a suit against the Republic by name;

2. a suit against an unincorporated government agency;
3. a suit against a government agency covered by a charter with respect to the agency’s
performance of governmental functions;
4. and a suit that on its face is against a government officer, but where the ultimate liability will
fall on the government.

In the present case, the writ of attachment was issued against a government agency covered by
its own charter.

As discussed above, TESDA performs governmental functions, and the issuance of certifications
is a task within its function of developing and establishing a system of skills standardization,
testing, and certification in the country. From the perspective of this function, the core reason for
the existence of state immunity applies – i.e., the public policy reason that the performance of
governmental function cannot be hindered or delayed by suits, nor can these suits control the use
and disposition of the means for the performance of governmental functions. In Providence
Washington Insurance Co. v. Republic of the Philippines, we said:

[A] continued adherence to the doctrine of non-suability is not to be deplored for as against
the inconvenience that may be caused private parties, the loss of governmental efficiency and
the obstacle to the performance of its multifarious functions are far greater if such a
fundamental principle were abandoned and the availability of judicial remedy were not thus
restricted. With the well known propensity on the part of our people to go to court, at the least
provocation, the loss of time and energy required to defend against law suits, in the absence
of such a basic principle that constitutes such an effective obstacle, could very well be
imagined.

PROVI argues that TESDA can be sued because it has effectively waived its immunity when it
entered into a contract with PROVI for a commercial purpose. The PVC cards purchased by
TESDA from PROVI are meant to properly identify the trainees who passed TESDA’s National
Skills Certification Program – the program that immediately serves TESDA’s mandated function
of developing and establishing a national system of skills standardization, testing, and certification
in the country. How the mandated certification is to be done, however, lies within the discretion of
TESDA as an incident of its mandated function, and is a properly delegated authority that this
Court cannot inquire into, unless its exercise is attended by grave abuse of discretion.

That TESDA sells the PVC cards to its trainees for a fee does not characterize the transaction as
industrial or business; the sale, expressly authorized by the TESDA Act, cannot be considered
separately from TESDA’s general governmental functions, as they are undertaken in the
discharge of these functions. Now, the fact that a non-corporate government entity performs a
function proprietary in nature does not necessarily result in its being suable. If said non-
governmental function is undertaken as an incident to its governmental function, there is no waiver
thereby of the sovereign immunity from suit extended to such government entity. G.R. No. 155504
June 26, 2009 PROFESSIONAL VIDEO, INC. vs. TECHNICAL EDUCATION AND SKILLS
DEVELOPMENT AUTHORITY

Case: Spouses David and Elisea Ramos discovered that a portion of their land was being used
as part of the runway and running shoulder of the Loakan Airport being operated by petitioner Air
Transportation Office. They agreed after negotiations to convey the affected portion by deed of
sale to the ATO in consideration of the amount of P778,150.00. However, the ATO failed to pay
despite repeated verbal and written demands.

Respondents filed an action for collection against the ATO and some of its officials in the RTC

In their answer, the ATO and its co-defendants invoked as an affirmative defense the issuance of
Proclamation No. 1358, whereby President Marcos had reserved certain parcels of land that
included the respondents’ affected portion for use of the Loakan Airport. They asserted that the
RTC had no jurisdiction to entertain the action without the State’s consent considering that the
deed of sale had been entered into in the performance of governmental functions.

Political Law 1 2023 Atty. Edgar Pascua II

Issue: The only issue presented for resolution is whether the ATO could be sued without the
State’s consent.

Rule: An unincorporated government agency without any separate juridical personality of its own
enjoys immunity from suit because it is invested with an inherent power of sovereignty.
Accordingly, a claim for damages against the agency cannot prosper; otherwise, the doctrine of
sovereign immunity is violated. However, the need to distinguish between an unincorporated
government agency performing governmental function and one performing proprietary functions
has arisen. The immunity has been upheld in favor of the former because its function is
governmental or incidental to such function; it has not been upheld in favor of the latter whose
function was not in pursuit of a necessary function of government but was essentially a business.

ATO is an agency of the Government not performing a purely governmental or sovereign function,
but was instead involved in the management and maintenance of the Loakan Airport, an activity
that was not the exclusive prerogative of the State in its sovereign capacity. Hence, the ATO had
no claim to the State’s immunity from suit. We further observe the doctrine of sovereign immunity
cannot be successfully invoked to defeat a valid claim for compensation arising from the taking
without just compensation and without the proper expropriation proceedings being first resorted
to of the plaintiffs’ property.

Lastly, the issue of whether or not the ATO could be sued without the State’s consent has been
rendered moot by the passage of Republic Act No. 9497, otherwise known as the Civil Aviation
Authority Act of 2008 abolished the ATO and established in its place the Civil Aviation Authority
of the Philippines (CAAP).

Section 23 of R.A. No. 9497 enumerates the corporate powers vested in the CAAP, including the
power to sue and be sued, to enter into contracts of every class, kind and description, to construct,
acquire, own, hold, operate, maintain, administer and lease personal and real properties, and to
settle, under such terms and conditions most advantageous to it, any claim by or against it.

With the CAAP having legally succeeded the ATO pursuant to R.A. No. 9497, the obligations that
the ATO had incurred by virtue of the deed of sale with the Ramos spouses might now be enforced
against the CAAP. G.R. No. 159402 February 23, 2011 AIR TRANSPORTATION OFFICE, vs.
SPOUSES DAVID* ELISEA RAMOS

Rule: This Court explained the doctrine of sovereign immunity in Holy See v. Rosario (G.R. No.
101949, 1 December 1994), to wit:

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.

Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of
the act involved – whether the entity claiming immunity performs governmental, as opposed to
proprietary, functions. As held in United States of America v. Ruiz (221 Phil. 179 -1985)

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.

A thorough examination of the basic facts of the case would show that CNMEG is engaged in a
proprietary activity.

The parties executed the Contract Agreement for the purpose of constructing the Luzon Railways.
The Memorandum of Understanding dated 14 September 2002 shows that CNMEG sought the
construction of the Luzon Railways as a proprietary venture. Also, that CNMEG, and not the
Chinese government, initiated the Northrail Project was confirmed. Thus, the desire of CNMEG

Political Law 1 2023 Atty. Edgar Pascua II

to secure the Northrail Project was in the ordinary or regular course of its business as a global
construction company. The implementation of the Northrail Project was intended to generate profit
for CNMEG. The use of the term "state corporation" to refer to CNMEG was only descriptive of
its nature as a government-owned and/or -controlled corporation, and its assignment as the
Primary Contractor did not imply that it was acting on behalf of China in the performance of the
latter’s sovereign functions. G.R. No. 185572 February 7, 2012 CHINA NATIONAL
MACHINERY & EQUIPMENT CORP. (GROUP), vs. HON. CESAR D. SANTAMARIA

Case: With the change of government after the EDSA Revolution, the new Chairman of the
National Parks Development Committee, herein petitioner, sought to clean up Rizal Park. In a
written notice dated February 23, 1988 and received by private respondents on February 29,
1988, petitioner terminated their verbal lease agreement with General Assembly of the Blind, Inc.
(GABI) and demanded that the latter vacate the premises and the kiosks it ran privately within the
public park.

The latter notice was signed by private respondent Iglesias, GABI president, allegedly to indicate
his conformity to its contents. However, Iglesias, who is totally blind, claims that he was deceived
into signing the notice. He was allegedly told by Ricardo Villanueva, then chief warden of Rizal
Park, that he was merely acknowledging receipt of the notice. Although blind, Iglesias as president
was knowledgeable enough to run GABI as well as its business.

On the day of the supposed eviction, GABI filed an action for damages and injunction in the
Regional Trial Court against petitioner,

GABI's action for damages and injunction was subsequently dismissed by the RTC, ruling that
the complaint was actually directed against the State which could not be sued without its consent.

Rule: The doctrine of state immunity from suit applies to complaints filed against public officials
for acts done in the performance of their duties. The rule is that the suit must be regarded as one
against the state where satisfaction of the judgment against the public official concerned will
require the state itself to perform a positive act, such as appropriation of the amount necessary
to pay the damages awarded to the plaintiff.

The rule does not apply where the public official is charged in his official capacity for acts that are
unlawful and injurious to the rights of others. Public officials are not exempt, in their personal
capacity, from liability arising from acts committed in bad faith.

Neither does it apply where the public official is clearly being sued not in his official capacity but
in his personal capacity, although the acts complained of may have been committed while he
occupied a public position.

We are convinced that petitioner is being sued not in his capacity as NPDC chairman but in his
personal capacity. The complaint filed by private respondents in the RTC merely identified
petitioner as chairman of the NPDC, but did not categorically state that he is being sued in that
capacity. G.R. No. 102667 February 23, 2000 AMADO J. LANSANG, vs. COURT OF
APPEALS, GENERAL ASSEMBLY OF THE BLIND, INC., and JOSE IGLESIAS*

Case: A vehicle, was apprehended by a composite team of DENR-CENR in Catbalogan and

Philippine Army elements. It was loaded with forest products Calub duly filed a criminal complaint
against Constancio Abuganda, a certain Abegonia, and several John Does, in Criminal Case No.
3625, for violation of Section 68, Presidential Decree 705 as amended by Executive Order 277,
otherwise known as the Revised Forestry Code.

In Criminal Cases Nos. 3795 and 3625, however, Abegonia and Abuganda were acquitted on the
ground of reasonable doubt.

Subsequently, herein private respondents Manuela Babalcon, the vehicle owner, and Constancio
Abuganda, the driver, filed a complaint for the recovery of possession of the two (2) impounded
vehicles with an application for replevin against herein petitioners before the RTC of Catbalogan.
The trial court granted the application for replevin and issued the corresponding writ in an Order
Petitioners filed a motion to dismiss which was denied by the trial court.

Political Law 1 2023 Atty. Edgar Pascua II

Issue: Is the complaint for the recovery of possession of the two impounded vehicles, with an
application for replevin, a suit against the State?

Rule: Well established is the doctrine that the State may not be sued without its consent. And a
suit against a public officer for his official acts is, in effect, a suit against the State if its purpose is
to hold the State ultimately liable. However, the protection afforded to public officers by this
doctrine generally applies only to activities within the scope of their authority in good faith and
without willfulness, malice or corruption. In the present case, the acts for which the petitioners are
being called to account were performed by them in the discharge of their official duties. The acts
in question are clearly official in nature. In implementing and enforcing Sections 78-A and 89 of
the Forestry Code through the seizure carried out, petitioners were performing their duties and
functions as officers of the DENR, and did so within the limits of their authority. There was no
malice nor bad faith on their part. Hence, a suit against the petitioners who represent the DENR
is a suit against the State. It cannot prosper without the State's consent. G.R. No. 115634 April
27, 2000 FELIPE CALUB and RICARDO VALENCIA, DEPARTMENT of ENVIRONMENT and
NATURAL RESOURCES (DENR), CATBALOGAN, SAMAR vs. COURT OF APPEALS,
MANUELA T. BABALCON, and CONSTANCIO ABUGANDA

Rule: The suit is to the mind of this court a suit against the state. At times, it would be teasingly
obvious, even from the moment of the filing of the complaint, that the suit is one against the State.
A cursory examination of the caption of the complaint can sometimes betray such proscribed
intent, as when the suit is directly initiated against the Republic of the Philippines, any foreign
government, or an unincorporated government agency as the named respondents. In such cases,
obviously there is need for immediate caution, although if it is somehow established that those
respondents had given their consent to be sued, the suit may nonetheless prosper.

The present action was denominated against Lichauco and the unknown awardee, Lichauco was
identified in the complaint as "acting Secretary of the [DOTC]." The hornbo0ok rule is that 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.
However, government immunity from suit will not shield the public official being sued if the
government no longer has an interest to protect in the outcome of a suit; or if the liability of the
officer is personal because it arises from a tortious act in the performance of his/her duties.

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, et al. vs. Aligaen, etc., et al. '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 or 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.' The rationale for this ruling is that the doctrine of state immunity
cannot be used as an instrument for perpetrating an injustice. G.R. No. 142362 May 3, 2006
PHILIPPINE AGILA SATELLITE INC. and MICHAELC. U. DE GUZMAN vs. JOSEFINA
TRINIDAD-LICHAUCO Undersecretary for Communications, Department of Transportation
and Communication (DOTC)

Case: On December 22, 1998, then Secretary of Health Alberto G. Romualdez, Jr. issued
Administrative Order No. 27, Series of 1998, outlining the guidelines and procedures on the
accreditation of government suppliers for pharmaceutical products

On May 9, 2000 and May 29, 2000, respondent submitted to petitioner DOH a request for the
inclusion of additional items in its list of accredited drug products, including the antibiotic "Penicillin
G Benzathine." Based on the schedule provided by petitioner DOH, it appears that processing of
and release of the result of respondent’s request were due on September 2000, the last month of
the quarter following the date of its filing.

Political Law 1 2023 Atty. Edgar Pascua II

Sometime in September 2000, petitioner DOH, through petitioner Antonio M. Lopez, chairperson
of the pre-qualifications, bids and awards committee, issued an Invitation for Bids for the
procurement of 1.2 million units vials of Penicillin G Benzathine.

Despite the lack of response from petitioner DOH regarding respondent’s request for inclusion of
additional items in its list of accredited products, respondent submitted its bid for the Penicillin G
Benzathine contract. When the bids were opened on October 11, 2000, only two companies
participated, with respondent submitting the lower bid at P82.24 per unit, compared to
Cathay/YSS Laboratories’ bid of P95.00 per unit. In view, however, of the non-accreditation of
respondent’s Penicillin G Benzathine product, the contract was awarded to YSS.

Respondent thus filed a complaint for injunction, mandamus and damages

Petitioners subsequently filed a Manifestation and Motion (motion to dismiss) praying for the
outright dismissal of the complaint based on the doctrine of state immunity. By Order of December
8, 2003, the trial court denied petitioners’ motion to dismiss.

The Court of Appeals affirmed the trial court’s Order. Hence, the instant petition for review which
raises the sole issue of whether the Court of Appeals erred in upholding the denial of petitioners’
motion to dismiss.

Rule: The petition fails. The suability of a government official depends on whether the official
concerned was acting within his official or jurisdictional capacity, and whether the acts done in
the performance of official functions will result in a charge or financial liability against the
government. In the first case, the Constitution itself assures the availability of judicial review, and
it is the official concerned who should be impleaded as the proper party.

In its complaint, respondent sufficiently imputes grave abuse of discretion against petitioners in
their official capacity. Since judicial review of acts alleged to have been tainted with grave abuse
of discretion is guaranteed by the Constitution, it necessarily follows that it is the official concerned
who should be impleaded as defendant or respondent in an appropriate suit.

As regards petitioner DOH, the defense of immunity from suit will not avail despite its being an
unincorporated agency of the government, for the only causes of action directed against it are
preliminary injunction and mandamus. Under Section 1, Rule 58 of the Rules of Court, preliminary
injunction may be directed against a party or a court, agency or a person. Moreover, the defense
of state immunity from suit does not apply in causes of action which do not seek to impose a
charge or financial liability against the State

The rule that a state may not be sued without its consent, now embodied in Section 3, Article XVI
of the 1987 Constitution, is one of the generally accepted principles of international law, which we
have now adopted as part of the law of the land.

While the doctrine of state immunity 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 suit is regarded as one against the state
where satisfaction of the judgment against the officials will require the state itself to perform a
positive act, such as the appropriation of the amount necessary to pay the damages awarded
against them. The rule, however, is not so all-encompassing as to be applicable under all
circumstances. Shauf v. Court of Appeals elucidates:

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, et al. vs. Aligaen, etc., et al., ‘ 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

Political Law 1 2023 Atty. Edgar Pascua II

not be sued without its consent.’ The rationale for this ruling is that the doctrine of state immunity
cannot be used as an instrument for perpetrating an injustice.

Hence, the rule does not apply where the public official is charged in his official capacity for acts
that are unauthorized or unlawful and injurious to the rights of others. Neither does it apply where
the public official is clearly being sued not in his official capacity but in his personal capacity,
although the acts complained of may have been committed while he occupied a public position.

In the present case, suing individual petitioners in their personal capacities for damages in
connection with their alleged act of "illegal[ly] abus[ing] their official positions to make sure that
plaintiff Pharmawealth would not be awarded the Benzathine contract [which act was] done in
bad faith and with full knowledge of the limits and breadth of their powers given by law" is
permissible, in consonance with the foregoing principles. For an officer who exceeds the power
conferred on him by law cannot hide behind the plea of sovereign immunity and must bear the
liability personally. G.R. No. 169304 March 13, 2007 DOH, SECRETARY MANUEL M. DAYRIT,
USEC. MA. MARGARITA GALON and USEC. ANTONIO M. LOPEZ vs. PHIL.
PHARMAWEALTH, INC.

c. Consent to be Sued

How consent is given.

1. Express consent:

Generally: The consent to be sued, in order to be effective, must come from the
State, acting through a duly enacted statute. Waiver of state immunity can only be
made by an act of legislative body.

Rule: A contract entered into by the Rice and Corn Administration stipulating that in the event of
breach, action may be filed by the parties, cannot be the basis of a money claim against the RCA,
a government entity under the Office of the President, since the RCA had no authority to bind the
government to be sued. Only a statute could.

Express consent is effected only by the will of the legislature through the medium of a duly enacted
statute. “The consent, to be effective though, must come from the State acting through a duly
enacted statute. 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. G.R.
No. L-36084 August 31, 1977 REPUBLIC OF THE PHILIPPINES, vs. HONORABLE AMANTE
P. PURISIMA

Rule: The rule, in any case, is not really absolute for it does not say that the state may not be
sued under any circumstances. On the contrary, as correctly phrased, the doctrine only conveys,
"the state may not be sued without its consent;" its clear import then is that the State may at times
be sued. The States' consent may be given expressly or impliedly. Express consent may be made
through a general law or a special law. In this jurisdiction, the general law waiving the immunity
of the state from suit is found in Act No. 3083, where the Philippine government "consents and
submits to be sued upon any money claims involving liability arising from contract, express or
implied, which could serve as a basis of civil action between private parties." Implied consent, on
the other hand, is conceded when the State itself commences litigation, thus opening itself to a
counterclaim or when it enters into a contract. In this situation, the government is deemed to have
descended to the level of the other contracting party and to have divested itself of its sovereign
immunity. This rule, relied upon by the NLRC and the private respondents, is not, however, without
qualification. Not all contracts entered into by the government operate as a waiver of its non-
suability; distinction must still be made between one which is executed in the exercise of its
sovereign function and another which is done in its proprietary capacity.

In the Unites States of America vs. Ruiz, where the questioned transaction dealt with
improvements on the wharves in the naval installation at Subic Bay, we held:

The traditional rule of immunity exempts a State from being sued in the courts of another State
without its consent or waiver. This rule is a necessary consequence of the principles of

Political Law 1 2023 Atty. Edgar Pascua II

independence and equality of States. However, the rules of International Law are not petrified;
they are constantly developing and evolving. And because the activities of states have multiplied,
it has been necessary to distinguish them — between sovereign and governmental acts (jure
imperii) and private, commercial and proprietary act (jure gestionisis). The result is that State
immunity now extends only to acts jure imperii. The restrictive application of State immunity is
now the rule in the United States, the United Kingdom and other states in Western Europe.

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
this be deemed to have actually given its consent to be sued only when it enters into business
contracts. It does not apply where the contracts relates to the exercise of its sovereign functions.
In this case the projects are an integral part of the naval base which is devoted to the defense of
both the United States and the Philippines, indisputably a function of the government of the
highest order; they are not utilized for not dedicated to commercial or business purposes.

Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by Presidential Decree
("P.D.") No. 1145, the money claim first be brought to the Commission on Audit. Thus, in Carabao,
Inc., vs. Agricultural Productivity Commission, we ruled:

(C)laimants have to prosecute their money claims against the Government under
Commonwealth Act 327, stating that Act 3083 stands now merely as the general law waiving
the State's immunity from suit, subject to the general limitation expressed in Section 7 thereof
that "no execution shall issue upon any judgment rendered by any Court against the
Government of the (Philippines), and that the conditions provided in Commonwealth Act 327
for filing money claims against the Government must be strictly observed."

When the state gives its consent to be sued, it does thereby necessarily consent to unrestrained
execution against it. Tersely put, when the State waives its immunity, all it does, in effect, is to
give the other party an opportunity to prove, if it can, that the State has a liability. In Republic vs.
Villasor this Court, in nullifying the issuance of an alias writ of execution directed against the funds
of the Armed Forces of the Philippines to satisfy a final and executory judgment, has explained,
thus —

The universal rule that where the State gives its consent to be sued by private parties either
by general or special law, it may limit the claimant's action "only up to the completion of
proceedings anterior to the stage of execution" and that the power of the Courts ends when
the judgment is rendered, since government funds and properties may not be seized under
writs or execution or garnishment to satisfy such judgments, is based on obvious
considerations of public policy. Disbursements of public funds must be covered by the
correspondent appropriation as required by law. The functions and public services rendered
by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects, as appropriated by law.

WHEREFORE, the petition is GRANTED G.R. No. 104269 November 11, 1993 DEPARTMENT
OF AGRICULTURE, vs. THE NATIONAL LABOR RELATIONS COMMISSION, et al.

1) Money claims arising from contracts, express or implied.

 ACT NO. 3083 - AN ACT DEFINING THE CONDITIONS UNDER WHICH THE
GOVERNMENT OF THE PHILIPPINE ISLANDS MAY BE SUED

Section 1. Complaint against Government. — Subject to the provisions of this Act, the
Government of the Philippine Islands hereby consents and submits to be sued upon any
moneyed claim involving liability arising from contract, expressed or implied, which could
serve as a basis of civil action between private parties.

Sec. 2. A person desiring to avail himself of the privilege herein conferred must show that
he has presented his claim to the Insular Auditor and that the latter did not decide the same
within two months from the date of its presentation.

Political Law 1 2023 Atty. Edgar Pascua II

 Sec. 3. Venue. — Original actions brought pursuant to the authority conferred in this Act
shall be instituted in the Court of First Instance of the City of Manila or of the province were
the claimant resides, at the option of the latter, upon which court exclusive original
jurisdiction is hereby conferred to hear and determine such actions.

Sec. 4. Actions instituted as aforesaid shall be governed by the same rules of procedure,
both original and appellate, as if the litigants were private parties.

Sec. 5. When the Government of the Philippine Island is plaintiff in an action instituted in
any court of original jurisdiction, the defendant shall have the right to assert therein, by way
of set-off or counterclaim in a similar action between private parties.

Sec. 6. Process in actions brought against the Government of the Philippine Islands
pursuant to the authority granted in this Act shall be served upon the Attorney-General
whose duty it shall be to appear and make defense, either himself or through delegates.

Sec. 7. Execution. — No execution shall issue upon any judgment rendered by any court
against the Government of the Philippine Islands under the provisions of this Act; but a copy
thereof duly certified by the clerk of the Court in which judgment is rendered shall be
transmitted by such clerk to the Governor-General, within five days after the same becomes
final.

Sec. 8. Transmittal of Decision. — The Governor-General, at the commencement of each

regular session of the Legislature, shall transmit to that body for appropriate action all
decisions so received by him, and if said body determine that payment should be made, it
shall appropriate the sum which the Government has been sentenced to pay, including the
same in the appropriations for the ensuing year.

Sec. 9. This Act shall take effect on its approval.

Approved: March 16, 1923.

 COMMONWEALTH ACT NO. 327 - AN ACT FIXING THE TIME WITHIN WHICH THE
AUDITOR GENERAL SHALL RENDER HIS DECISIONS AND PRESCRIBING THE
MANNER OF APPEAL THEREFROM

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. If said accounts or claims need
reference to other persons, office or offices, or to a party interested, the period aforesaid
shall be counted from the time the last comment necessary to a proper decision is received
by him. With respect to the accounts of accountable officers, the Auditor General shall act
on the same within one hundred days after their submission, Sundays and holidays
excepted.

In case of accounts or claims already submitted to but still pending decision by the Auditor
General on or before the approval of this Act, the periods provided in this section shall
commence from the date of such approval.

Section 2. The party aggrieved by the final decision of the Auditor General in the settlement
of an account for claim may, within thirty days from receipt of the decision, take an appeal
in writing:

XXX

(b) To the President of the Philippines, or

(c) To the Supreme Court of the Philippines if the appellant is a private person or entity.
If there are more than one appellant, all appeals shall be taken to the same authority
resorted to by the first appellant.

Political Law 1 2023 Atty. Edgar Pascua II

 From a decision adversely affecting the interests of the Government, the appeal may be
taken by the proper head of the department or in case of local governments by the head of
the office or branch of the Government immediately concerned.

The appeal shall specifically set forth the particular action of the Auditor General to which
exception is taken with the reasons and authorities relied on for reversing such decision.

Section3. This Act shall take effect upon its approval.

Approved: June 18. 1938.

 Sec. 2 of CA 327 has been amended by Sec. 50 of PD 1445 and by Sec. 35, Chapter 5,
Subtitle B, Title I, Book V, Administrative Code of the Philippines, as follows:

 Sec. 50. Appeal from decisions of the Commission.-- The party aggrieved by any decision,
order, or ruling of the Commission may within thirty days from his receipt of a copy thereof
appeal on certiorari to the Supreme Court in the manner provided by law and the Rules of
Court. When the decision, order, or ruling adversely affects the interests of any
government agency, the appeal may be taken by the proper head of that agency. (PD
1445.)

 Sec. 35. Appeal from Decision of the Commission.-- Any decision, order or ruling of the
Commission may be brought to the Supreme Court on certiorari by the aggrieved party
within thirty days from his receipt of a copy thereof in the manner provided by law and the
Rules of Court. When the decision, order or ruling adversely affects the interest of any
government agency, the appeal may be taken by the proper head of that agency. (Subtitle
B, Title I, Book V, Administrative Code of the Philippines.)

Case: Thus: "It is apparent that respondent Singson's cause of action is a money claim against
the government, for the payment of the alleged balance of the cost of spare parts supplied by him
to the Bureau of Public Highways. Assuming momentarily the validity of such claim, although as
will be shown hereunder, the claim is void for the cause or consideration is contrary to law, morals
or public policy, mandamus is not the remedy to enforce the collection of such claim against the
State but a ordinary action for specific performance. Actually, the suit disguised as one for
mandamus to compel the Auditors to approve the vouchers for payment, is a suit against the
State, which cannot prosper or be entertained by the Court except with the consent of the State .
In other words, the respondent should have filed his claim with the General Auditing Office, under
the provisions of Com. Act 327 ... which prescribe the conditions under which money claim against
the government may be filed". Commonwealth Act No. 327 is quite explicit. It is therein provided:
"In all cases involving the settlement of accounts or claims, other than those of accountable
officers, the Auditor General shall act and decide the same within sixty days, exclusive of Sundays
and holidays, after their presentation. If said accounts or claims need reference to other persons,
office or offices, or to a party interested, the period aforesaid shall be counted from the time the
last comment necessary to a proper decision is received by him." Thereafter, the procedure for
appeal is indicated: "The party aggrieved by the final decision of the Auditor General in the
settlement of an account or claim may, within thirty days from receipt of the decision, take an
appeal in writing: (a) To the President of the United States, pending the final and complete
withdrawal of her sovereignty over the Philippines, or (b) To the President of the Philippines, or
(c) To the Supreme Court of the Philippines if the appellant is a private person or entity."

With the facts undisputed and the statute far from indefinite or ambiguous, the appealed decision
defies explanation. It would be to disregard a basic corollary of the cardinal postulate of non-
suability. It is true that once consent is secured, an action may be filed. There is nothing to prevent
the State, however, in such statutory grant, to require that certain administrative proceedings be
had and be exhausted. Also, the proper forum in the judicial hierarchy can be specified if thereafter
an appeal would be taken by the party aggrieved. Here, there was no ruling of the Auditor General.
Even had there been such, the court to which the matter should have been elevated is this
Tribunal; the lower court could not legally act on the matter. What transpired was anything but
that. It is quite obvious then that it does not have the imprint of validity Sayson v. Singson, 54
SCRA 282 (1973)

Before the 1987 Constitution With the effectivitiy the 1987 Constitution

Political Law 1 2023 Atty. Edgar Pascua II

 Act 3038 and CA 327 allowed suit only for All money claims are to be filed with COA,
money claims arising from contract, and which has 60 days within which to act.
providing a special procedure.

The claim must be filed with the Auditor  If COA fails to so act, the claimant
General (now, COA). must wait anyway.
 If the Auditor does not act within 60  Once a decision has been made,
days, then the claimant could file his he has, within 30 days to appeal by
claim with the RTC. certiorari to the SC
 But if the Auditor renders a decision,
then the appeal could be made to the
SC, unless the claimant was a public
official in which case appeal was to the
President.

Case: On appeal by the University of the Philippines and its then incumbent officials is the
decision promulgated on September, 2005, whereby the Court of Appeals upheld the order of the
Regional Trial Court of Quezon City that directed the garnishment of public funds amounting to
₱ 16,370,191.74 belonging to the UP to satisfy the writ of execution issued to enforce the already
final and executory judgment against the University.

Rule: 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 execution of the monetary judgment against the UP was within the primary jurisdiction of the
COA. This was expressly provided in Section 26 of Presidential Decree No. 1445, to wit:

Section 26. General jurisdiction. - The authority and powers of the Commission shall extend to
and comprehend all matters relating to auditing procedures, systems and controls, the keeping of
the general accounts of the Government, the preservation of vouchers pertaining thereto for a
period of ten years, the examination and inspection of the books, records, and papers relating to
those accounts; and the audit and settlement of the accounts of all persons respecting funds or
property received or held by them in an accountable capacity, as well as the examination, audit,
and settlement of all debts and claims of any sort due from or owing to the Government or any of
its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government-
owned or controlled corporations, including their subsidiaries, and other self-governing boards,
commissions, or agencies of the Government, and as herein prescribed, including non
governmental entities subsidized by the government, those funded by donations through the
government, those required to pay levies or government share, and those for which the
government has put up a counterpart fund or those partly funded by the government.

It was of no moment that a final and executory decision already validated the claim against the
UP. The settlement of the monetary claim was still subject to the primary jurisdiction of the COA
despite the final decision of the RTC having already validated the claim. As such, Stern Builders
and dela Cruz as the claimants had no alternative except to first seek the approval of the COA of
their monetary claim.

Moreover, it is settled jurisprudence that upon determination of State liability, the prosecution,
enforcement or satisfaction thereof must still be pursued in accordance with the rules and
procedures laid down in P.D. No. 1445, otherwise known as the Government Auditing Code of
the Philippines (Department of Agriculture v. NLRC, 227 SCRA 693, 701-02 1993 citing Republic
vs. Villasor, 54 SCRA 84 1973). All money claims against the Government must first be filed with
the Commission on Audit which must act upon it within sixty days. Rejection of the claim will
authorize the claimant to elevate the matter to the Supreme Court on certiorari and in effect, sue
the State thereby (P.D. 1445, Sections 49-50). G.R. No. 171182 August 23, 2012 UNIVERSITY
OF THE PHILIPPINES vs. HON. AGUSTIN S. DIZON

(2) Quasi-delicts committed by special agents

Political Law 1 2023 Atty. Edgar Pascua II

 Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own
acts or omissions, but also for those of persons for whom one is responsible.

XXX

The State is responsible in like manner when it acts through a special agent; but not when
the damage has been caused by the official to whom the task done properly pertains, in
which case what Is provided in Article 2176 shall be applicable.

Art. 2176. 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, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict … (New Civil
Code)

Case: The Plaintiff, riding on a motorcycle, was struck by the General Hospital ambulance, which
turned suddenly and, without having sounded any whistle or horn. By reason of the resulting
collision, the plaintiff was severely injured. Plaintiff was allowed to sue the Government of the
Philippine Islands by virtue of Act No. 2457

Rule: By consenting to be sued, a state simply waives its immunity from suit. It gives a remedy to
enforce a preexisting liability and submit itself to the jurisdiction of the court, subject to its right to
interpose any lawful defense.

That the state is only liable for the acts of its agents, officers and employees when they act as
special agents within the meaning of paragraph 5 of article 1903 (now Art. 2180) The chauffeur
of the ambulance of the General Hospital was not such an agent. The responsibility of the state
is limited by article 1903 to the case wherein it acts through a special agent (and a special agent,
in the sense in which these words are employed, is one who receives a definite and fixed order
or commission, foreign to the exercise of the duties of his office if he is a special official) so that
in representation of the state and being bound to act as an agent thereof, he executes the trust
confided to him. This concept does not apply to any executive agent who is an employee of the
acting administration and who on his own responsibility performs the functions which are inherent
in and naturally pertain to his office and which are regulated by law and the regulations." (Supreme
Court of Spain, May 18, 1904; 98 Jur. Civ. ,389, 390.) The chauffeur of the ambulance of the
General Hospital was not such an agent Merritt vs. Government. of the Philippine Islands, 34
Phil 311

(3) Incorporation of government-owned or controlled corporation.

When the government creates a corporation, it invariably provides this corporation a

separate entity and with the capacity to sue and be sued. If the government entity
is given the capacity to be sued, the suit encompasses any kind of action, including
one from tort.

Rule: The universal rule that where the State gives its consent to be sued by private parties either
by general or special law, it may limit claimant’s action

"only up to the completion of proceedings anterior to the stage of execution" and that the power
of the Courts ends when the judgment is rendered, since government funds and properties may
not be seized under writs of execution or garnishment to satisfy such judgments, is based on
obvious considerations of public policy. Disbursements of public funds must be covered by the
corresponding appropriation as required by law. The functions and public services rendered by
the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from
their legitimate and specific objects, as appropriated by law.

However, if the funds belong to a public corporation or a government-owned or controlled

corporation which is clothed with a personality of its own, separate and distinct from that of the
government, then its funds are not exempt from garnishment. This is so because when the
government enters into commercial business, it abandons its sovereign capacity and is to be
treated like any other corporation. G.R. No. 154411 June 19, 2003 NATIONAL HOUSING
AUTHORITY vs. HEIRS OF ISIDRO GUIVELONDO

Political Law 1 2023 Atty. Edgar Pascua II

Rule: "With original charter" means that government-owned and controlled corporations refer to
corporations chartered by special law as distinguished from corporations organized under the
Corporation Code. Thus, NASECO which had been organized under the general incorporation
statute and a subsidiary of the National Investment Development Corporation, which in turn was
a subsidiary of the Philippine National Bank, is excluded from the purview of the Civil Service
Commission. We see no cogent reason to depart from the ruling in the aforesaid case. G.R. No.
98107August 18, 1997 BENJAMIN C. JUCO, vs. NATIONAL LABOR RELATIONS
COMMISSION

2. Implied consent:

(1) When the government enters into business contracts

Important to note - When the government is in the performance of governmental

function (jure imperii), even if it enters into a contract with private persons, it cannot
be sued without its consent.

Thus in United States v Ruiz, 136 SCRA 487 (1985). a contract for the repair of
wharves and piers at the naval base in Subic was held to be in line with the
governmental function of the US Government and so the immunity existed.

But when the government enters into commercial contracts and descends to the
status of ordinary persons (jure gestioni), it can be sued like any other person. In
Malong v PNR, 138 SCRA 63 (1985), it was held that when the state organized
the Philippine National Railway, it divested itself of its sovereign capacity, and so
became liable for damages that arose from the death of one who fell from an
overloaded train.

Case: 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. 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 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.

The petitioners' filed with the trial court their motion to dismiss which was denied by the latter.

Rule: 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, 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. Waiver is also implied when
the government files a complaint, thus opening itself to a counterclaim. 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.

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.

Political Law 1 2023 Atty. Edgar Pascua II

There is no question that the United States of America, like any other state, will be deemed to
have impliedly waived its non-suability if it has entered into a contract in its proprietary or private
capacity. It is only when the contract involves its sovereign or governmental capacity that no such
waiver may be implied. This was our ruling in United States of America v. Ruiz, 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.

In this case, by entering into an employment contract [a proprietary function] with the respondents,
the US impliedly divested itself of its sovereign immunity. The state could therefore be sued since
such contracts are commercial in nature.

WHEREFORE, after considering all the above premises, the Court hereby renders judgment as
follows: 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. G.R. No. 76607 February 26, 1990 UNITED STATES OF
AMERICA vs. HON. ELIODORO B. GUINTO

Case: Allegedly that sometime in 1940, the Municipality bought the disputed lot from Claro Oñate,
respondent’s grandfather, and since then it had continually occupied said lot openly and publicly
in the concept of an owner until 1988 when the Municipality donated the school site to petitioner
DECS; thus asserting that it could also claim ownership also through adverse possession.

Respondent instituted a Complaint for Annulment of Donation and/or Quieting of Title with
Recovery of Possession of the Lot

The threshold issue is whether petitioner DECS can sued be without its consent. A supplementary
issue is whether petitioner DECS can be sued independently of the Republic of the Philippines.

Rule: We rule that petitioner DECS can be sued without its permission as a result of its being
privy to the Deed of Donation executed by the Municipality of Daraga, Albay over the disputed
property. When it voluntarily gave its consent to the donation, any dispute that may arise from it
would necessarily bring petitioner DECS down to the level of an ordinary citizen of the State
vulnerable to a suit by an interested or affected party. It has shed off its mantle of immunity and
relinquished and forfeited its armor of non-suability of the State.

The auxiliary issue of non-joinder of the Republic of the Philippines is likewise resolved in the
negative. While it is true that petitioner is an unincorporated government agency, and as such
technically requires the Republic of the Philippines to be impleaded in any suit against the former,

Political Law 1 2023 Atty. Edgar Pascua II

nonetheless, considering our resolution of the main issue below, this issue is deemed mooted.
Besides, at this point, we deem it best to lift such procedural technicality in order to finally resolve
the long litigation this case has undergone. Moreover, even if we give due course to said issue,
we will arrive at the same ruling.

The Republic of the Philippines need not be impleaded as a party-defendant considering that it
impliedly gave its approval to the involvement of petitioner DECS in the Deed of Donation. In a
situation involving a contract between a government department and a third party, the Republic
of the Philippines need not be impleaded as a party to a suit resulting from said contract as it is
assumed that the authority granted to such department to enter into such contract carries with it
the full responsibility and authority to sue and be sued in its name. G.R. No. 161758 June 8, 2007
DEPARTMENT OF EDUCATION, DIVISION OF ALBAY represented by its SCHOOL’S
Division Superintendent vs. CELSO OÑATE,.

Bar Exam November 2018 Item No. XV

Annika sued the Republic of the Philippines, represented by the Director of the Bureau of Plant Industry, and asked
for the revocation of a deed of donation executed by her in favor of said Bureau. She alleged that, contrary to the
terms of the donation, the donee failed to install lighting facilities and a water system on the property donated, and
to build an office building and parking lot thereon, which should have been constructed and made ready for
occupancy on or before the date fixed in the deed of donation.

The Republic invoked state immunity and moved for the dismissal of the case on the ground that it had not consented
to be sued. Should the Republic's motion be granted?

Also Read: PTA vs. PGDEI 668 SCRA 406

(2) When it would be inequitable for the state to invoke its immunity, or when it takes
private property for public use or purpose.

Case: The Ministry of Public Works and Highways forged individual contracts with herein
petitioners for the construction of the housing units. After complying with the terms of said
contracts, and by reason of the verbal request and assurance of then DPWH Undersecretary that
additional funds would be available and forthcoming, petitioners agreed to undertake and perform
"additional constructions" for the completion of the housing units, despite the absence of
appropriations and written contracts to cover subsequent expenses for the "additional
constructions." Thus, the money claims of petitioners.

Respondent DPWH Secretary Gregorio Vigilar denied the subject money claims prompting herein
petitioners to file a Petition for Mandamus.

Hence, this petition where the core issue for resolution focuses on the right of petitioners-
contractors to compensation for a public works housing project

Rule: The Court found the instant petition laden with merit and upheld, in the interest of substantial
justice, petitioners-contractors' right to be compensated for the "additional constructions" on the
public works housing project, applying the principle of quantum meruit.

Incidentally, respondent likewise argues that the State may not be sued in the instant case,
invoking the constitutional doctrine of Non-suability of the State, otherwise known as the Royal
Prerogative of Dishonesty.

Respondent's argument is misplaced inasmuch as the Principle of State Immunity finds no

application in the case before us.

Under these circumstances, respondent may not validly invoke the Royal Prerogative of
Dishonesty and conveniently hide under the State's cloak of invincibility against suit, considering
that this principle yields to certain settled exceptions. True enough, the rule, in any case, is not
absolute for it does not say that the state may not be sued under any circumstance.

Political Law 1 2023 Atty. Edgar Pascua II

Thus, in Amigable vs. Cuenca, this Court, in effect, shred the protective shroud which shields the
State from suit, reiterating our decree in the landmark case of Ministerio vs. CFI of Cebu that "the
doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an
injustice on a citizen." It is just as important, if not more so, that there be fidelity to legal norms on
the part of officialdom if the rule of law were to be maintained.

Although the Amigable and Ministerio cases generously tackled the issue of the State's immunity
from suit vis a vis the payment of just compensation for expropriated property, this Court
nonetheless finds the doctrine enunciated in the aforementioned cases applicable to the instant
controversy, considering that the ends of justice would be subverted if we were to uphold, in this
particular instance, the State's immunity from suit.

To be sure, this Court — as the staunch guardian of the citizens' rights and welfare — cannot
sanction an injustice so patent on its face, and allow itself to be an instrument in the perpetration
thereof. Justice and equity sternly demand that the State's cloak of invincibility against suit be
shred in this particular instance, and that petitioners-contractors be duly compensated — on the
basis of quantum meruit — for construction done on the public works housing project. G.R. No.
131544 March 16, 2001 EPG CONSTRUCTION CO. vs. HON. GREGORIO R. VIGILAR

Case: The Petitioner BOC Commissioner was ordered to pay respondent the commercial value
of the goods based on the prevailing exchange rate at the time of their importation. The same
was due to the loss of some confiscated items in BOCs custody, pending the determination of the
shipper’s compliance with the law.

Petitioner argues that a money judgment or any charge against the government requires a
corresponding appropriation and cannot be decreed by mere judicial order.

Rule: Although it may be gainsaid that the satisfaction of respondent’s demand will ultimately fall
on the government, and that, under the political doctrine of "state immunity," it cannot be held
liable for governmental acts (jus imperii), we still hold that petitioner cannot escape its liability.
The circumstances of this case warrant its exclusion from the purview of the state immunity
doctrine.

As previously discussed, the Court cannot turn a blind eye to BOC’s ineptitude and gross
negligence in the safekeeping of respondent’s goods. We are not likewise unaware of its
lackadaisical attitude in failing to provide a cogent explanation on the goods’ disappearance,
considering that they were in its custody and that they were in fact the subject of litigation. The
situation does not allow us to reject respondent’s claim on the mere invocation of the doctrine of
state immunity. Succinctly, the doctrine must be fairly observed and the State should not avail
itself of this prerogative to take undue advantage of parties that may have legitimate claims
against it.

In Department of Health v. C.V. Canchela & Associates, we enunciated that this Court, as the
staunch guardian of the people’s rights and welfare, cannot sanction an injustice so patent in its
face, and allow itself to be an instrument in the perpetration thereof. Over time, courts have
recognized with almost pedantic adherence that what is inconvenient and contrary to reason is
not allowed in law. Justice and equity now demand that the State’s cloak of invincibility against
suit and liability be shredded. G.R. Nos. 166309-10 March 9, 2007 REPUBLIC OF THE
PHILIPPINES, represented by the COMMISSIONER OF CUSTOMS, vs. UNIMEX MICRO-
ELECTRONICS.

(3) If the government files a complaint, defendant may file a counterclaim against it

In Froilan vs Oriental Pan Shipping, GR L-6060 (Sept. 30, 1950), the Court held
that when the State itself files a complaint, the defendant is entitled to file a
counterclaim against it. This is based on equitable grounds. The Court ruled that the
state impliedly allowed itself to be sued when it filed a complaint in intervention for
the purpose of asserting a claim for affirmative relief against the plaintiff, to wit,
recovery of a vessel.

Case: Froilan purchased from Shipping Commission a vessel for P200,000 paying P50,000 as
down payment. A Chattel Mortgage was executed to secure the payment of the balance. For

Political Law 1 2023 Atty. Edgar Pascua II

various reasons including non-payment of installments, the Commission took possession of the
vessel and considered the contract of sale cancelled. The Commission chartered and delivered
said vessel to Pan Oriental. Froilan appealed from the action of the Commission and he was
restored to all the rights under the original contract. However, Pan Oriental retained the
possession of the vessel. Froilan filed a complaint to recover possession of the vessel.

A writ of replevin was issued. The Government intervened alleging that Froilan failed to pay the
balance to the Commission; that the intervenor was entitled to the possession of said vessel under
the terms of the original contract or in order for it to effect the extrajudicial foreclosure of the
mortgage. Pan Oriental answered the complaint in intervention praying that if Government
succeeded in obtaining the possession of the vessel, to comply with its obligation of delivering it
to Pan Oriental pursuant to their contract of bareboat charter with an option to purchase.
Complaint in intervention was dismissed upon Froilan's payment of his account to the
Government.

Government filed a motion to dismiss the counterclaim which Pan Oriental had filed against it in
view of the court's order dismissing the complaint in intervention. Counterclaim of Pan Oriental.
against the Republic of the Philippines was dismissed. Hence, this appeal. Government raised,
among others, as ground for the dismissal of Pan Oriental 's counterclaim, the State's immunity
from suit.

Rule: By filing its complaint in intervention, the Government in effect waived its right of non-
suability. Stated otherwise, by taking the initiative in an action against a private party, the State
surrendered its privileged position and came down to the level of the defendant. The latter
automatically acquires, within certain limits, the right to set up whatever claims and other defenses
he might have against the State. Froilan vs Oriental Pan Shipping, 12 SCRA 276, GR L-6060
(Sept. 30, 1950)

Summary Note:

Express consent is effected only by the will of the legislature through the
medium of a duly enacted statute

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.

As for the filing of a complaint by the government, suability will result only
where the government is claiming affirmative relief from the defendant.

3. Scope of consent

(1) Under Act No.3083

Sec. 1. Subject to the provisions of this Act, the Government of the Philippines hereby
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.

When a money judgment is given against the government, the ordinary rule for
execution would not apply, for the consent of the government to be sued is only up
to the point of judgment. If it does not pay, it cannot be compelled to pay by
attachment or otherwise

Rule: Although the Government, as plaintiff in expropriation proceedings, submits itself to the
jurisdiction of the Court and thereby waives its immunity from suit, the judgment that is thus
rendered requiring its payment of the award determined as just compensation for the condemned
property as a condition precedent to the transfer to the title thereto in its favor, cannot be realized
upon execution. The Court there added that it is incumbent upon the legislature to appropriate
any additional amount, over and above the provisional deposit, that may be necessary to pay the

Political Law 1 2023 Atty. Edgar Pascua II

award determined in the judgment, since the Government cannot keep the land and dishonor the
judgment.

The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant's action "only up to the completion of proceedings
anterior to the stage of execution" and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy.

Disbursements of Public funds must be covered by the corresponding appropriation as required

by law. The functions and public services rendered by the State cannot be allowed to be paralyzed
or disrupted by the diversion of public funds from their legitimate and specific objects, as
appropriated by law. G.R. No. L-30098 February 18, 1970 THE COMMISSIONER OF PUBLIC
HIGHWAYS vs. HON. LOURDES P. SAN DIEGO

(2) Under a charter

When consent to be sued is provided by the charter, the consent does not stop with
the rendition, but goes up to the satisfaction of the judgment.

If an incorporated agency has a charter of its own, it has a separate and distinct
personality. If the agency is incorporated, the basis for its suabilty is found in its
charter.

"With original charter" means that government-owned and controlled corporations refer to
corporations chartered by special law as distinguished from corporations organized under the
Corporation Code. Thus, NASECO which had been organized under the general incorporation
statute and a subsidiary of the National Investment Development Corporation, which in turn was
a subsidiary of the Philippine National Bank, is excluded from the purview of the Civil Service
Commission. G.R. No. 98107August 18, 1997 JUCO, vs. NLRC

Case: What was sought to be garnished was the money of the People's Homesite and Housing
Corporation deposited at petitioner's branch, to satisfy a decision of respondent Court which had
become final and executory. A writ of execution in favor of private respondent Gabriel V.
Manansala had previously been issued.

Rule: The premise that the funds could be spoken of as public in character may be accepted in
the sense that the People's Homesite and Housing Corporation was a government-owned entity
It does not follow though that they were exempt from garnishment. By engaging in a particular
business thru the instrumentality of a corporation, the government divests itself pro hac vice of its
sovereign character, so as to render the corporation subject to the rules of law governing private
corporations."

According to US Chief Justice Marshall: "It is, we think, a sound principle, that when a government
becomes a partner in any trading company, it divests itself, so far as concerns the transactions of
that company, of its sovereign character, and takes that of a private citizen. Instead of
communicating to the company its privileges and its prerogatives, it descends to a level with those
with whom it associates itself, and takes the character which belongs to its associates, and to the
business which is to be transacted.

One of the coronaries of the fundamental concept of non-suability is that governmental funds are
immune from garnishment. Since then such a principle has been followed with undeviating rigidity.
It is an entirely different matter if, the office or entity is "possessed of a separate and distinct
corporate existence." Then it can sue and be sued. Thereafter, its funds may be levied upon or
garnished. That is what happened in this case. PNB v CIR, 81 SCRA 314 (1978)

(3) Execution

Rule: It is settled that when the State gives its consent to be sued, it does not thereby necessarily
consent to an unrestrained execution against it. Tersely put, when the State waives its immunity,
all it does, in effect, is to give the other party an opportunity to prove, if it can, that the state has a

Political Law 1 2023 Atty. Edgar Pascua II

liability. In Republic v. Villasor this Court, in nullifying the issuance of an alias writ of execution
directed against the funds of the Armed Forces of the Philippines to satisfy a final and executory
judgment, has explained, thus—

. . . The universal rule that where the State gives its consent to be sued by private parties either
by general or special law, it may limit claimant’s action "only up to the completion of proceedings
anterior to the stage of execution" and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the correspondent appropriation as required
by law. The functions and public services rendered by the State cannot be allowed to paralyzed
or disrupted by the diversion of public funds from their legitimate and specific objects, as
appropriated by law. A.M. No. RTJ-05-1959 December 9, 2005 REPUBLIC OF THE
PHILIPPINES, vs. JUDGE VICENTE A. HIDALGO

4. Suability vs. Liability

Rule: The general rule spelled out in Section 3, Article XVI of the Constitution is that the state
and its political subdivisions may not be sued without their consent. Otherwise put, they are open
to suit but only when they consent to it. Consent is implied when the government enters into a
business contract, as it then descends to the level of the other contracting party; or it may be
embodied in a general or special law such as that found in Book I, Title I, Chapter 2, Section 22
of the Local Government Code of 1991, which vests local government units with certain corporate
powers —one of them is the power to sue and be sued.

Be that as it may, a difference lies between suability and liability. As held in City of Caloocan v.
Allarde, where the suability of the state is conceded and by which liability is ascertained judicially,
the state is at liberty to determine for itself whether to satisfy the judgment or not. Execution may
not issue upon such judgment, because statutes waiving non-suability do not authorize the
seizure of property to satisfy judgments recovered from the action. These statutes only convey
an implication that the legislature will recognize such judgment as final and make provisions for
its full satisfaction. Thus, where consent to be sued is given by general or special law, the
implication thereof is limited only to the resultant verdict on the action before execution of the
judgment. G.R. No. 168289 March 22, 2010 THE MUNICIPALITY OF HAGONOY, BULACAN
vs. HON. SIMEON P. DUMDUM, JR.

Case: 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."
(United States of America vs. Guinto, supra, p. 659-660) G.R. No. L-52179 April 8, 1991
MUNICIPALITY OF SAN FERNANDO, LA UNION, vs. HON. JUDGE ROMEO N. FIRME

Bar Exam November 2017, item II

A. Under the doctrine of immunity from suit, the State cannot be sued without its consent. How may the consent be
given by the State? Explain your answer.

B. The doctrine of immunity from suit in favor of the State extends to public officials in the performance of their official
duties. May such officials be sued nonetheless to prevent or to undo their oppressive or illegal acts, or to compel
them to act? Explain your answer.

C. Do government-owned or -controlled corporations also enjoy the immunity of the State from suit? Explain your
answer.

Political Law 1 2023 Atty. Edgar Pascua II