Part 3.

The Doctrine of State Immunity from Suit

Article XVI, Section 3

The State may not be sued without its consent.

● True, the doctrine, not too infrequently, is derisively called “the royal prerogative of
dishonesty” because it grants the state the prerogative to defeat any legitimate claim
against it by simply invoking its non-suability.
(Dept. of Agriculture vs. NLRC, Nov. 11, 1993)

Suability of State

1. The State cannot be sued without its consent.

2. When considered a suit against the State

a. The Republic is sued by name;
b. Suits against an un-incorporated government agency;
c. Suit is against a government official, but is such that ultimate liability shall
devolve on the government
i. When a public officer acts in bad faith, or beyond the scope of his authority, he
can be held personally liable for damages.
ii. BUT: if he acted pursuant to his official duties, without malice, negligence, or
bad faith, they are not personally liable, and the suit is really one against the
State.

3. This rule applies not only in favor of the Philippines but also in favor of foreign states.

4. The rule likewise prohibits a person from filing for interpleader, with the State as one of
the defendants being compelled to interplead.

Diplomatic Immunity
● A diplomatic agent shall enjoy immunity from the criminal jurisdiction and the receiving
state's criminal jurisdiction.
- He shall also enjoy immunity from its civil and administrative jurisdiction, except
in the case of:
a. A real action relating to private immovable property situated in the territory
of the receiving state, unless he holds it on behalf of the sending state for
the purposes of the mission;
(Article 31, Vienna Convention on Diplomatic Relations)

b. An action relating to succession in which the diplomatic agent is involved

as executor, administrator, heir or legatee as a private person and not on
behalf of the sending state;
 c. An action relating to any professional or commercial activity exercised by
the diplomatic agent in the receiving state outside his official functions.
(Article 31, Vienna Convention on Diplomatic Relations)

1. Attributes of Sovereignty
a. Basis according to Justice Holmes
- "there can be no legal right against the authority which makes the law on
which the right depends.”

b. Application

a. Absoluteness:
Sovereignty is absolute and unquestionable. It is the ultimate
authority within a territory and is not subject to the control of another
entity. It represents the highest form of authority within a given territory or
political entity. It means that the sovereign entity has the ultimate power to
make and enforce laws, govern its people, and control its resources
without interference from external entities.

b. Permanence:
Sovereignty is a permanent aspect of a state. As long asthe state
exists, so does its sovereignty. It is not easily revoked or altered, except
through significant political changes like secession, integration, or
external intervention. The permanence of sovereinty reflecs the enduring
nature of a state’s authority and independence.

c. Inalienability:
Sovereignty cannot be surrendered or transferred willingly by the
state. It is inherent to the state’s existence. It signifies the essence of
self-governance and self-determination. A state cannot voluntarily give up
its sovereignty, as it is an essential attribute that defines its status as an
independent political entity.

d. Comprehensiveness:
Sovereignty applies to all individuals and institutions within the
territory of the state. No person or organization is above or beyond the
reach of sovereign authority. It encompasses both the government and
the governed. No person or organization is above or beyond the reach of
sovereign authority. The state exercises its sovereignty over its entire
population and has the power to enforce its laws and regulations
uniformly.
 e. Exclusiveness:
The sovereignty of a state is exclusive within its territorial limits.
No other state can exercise its sovereignty within its territory. It means
that no other state can exercise its sovereignty within the territory of
another state without its consent. Each state has exclusive control and
authority over its internal and external affairs, ensuring that its sovereignty
is not infringed upon by external entities.

2. Theories of State Suability

a. Absolute Immunity Theory
Absolute immunity is granted to a government official who has proven that his actions fell within
the scope of his duties and that his actions are discretionary rather than ministerial, that is to
say, that the conduct or the action performed must not involve insignificant or routinely office
work but rather the challenged action must involve personal judgment. Further, in Butz v.
Economou, the US Supreme Court held that absolute immunity can only be invoked if it is
demonstrated that absolute immunity is essential for the conduct of public business. In other
words, absolute immunity attaches to the function instead of the office.

Absolute official immunity blocks the recovery of damages for constitutional violations committed
by legislators, judges, prosecutors, and witnesses, no matter how egregious the violation. Under
the Supreme Court's “functional approach,” application of the doctrine does not turn on the
officer's title, but on function.

● The state may not be sued without its consent 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 either expressly or impliedly.

(Republic vs. NLRC, October 17, 1996)

b. Restrictive Immunity Theory

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.

● 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.

3. Waiver of State Immunity

a. Par In Parem Non Habet Imperium (An equal has no power over an equal)
“All states are sovereign equals and cannot assert jurisdiction over one another.”
 b. The Royal Prerogative of Dishonesty
This is how the doctrine of state immunity is often unfavorably referred to because of the
privilege it grants the State to defeat any legitimate claim against it by simply raising
non-suability.

4. Applicability of the State Immunity from the suit in the following:

a. Foreign state sought to be sued in local state
- In the case of the foreign state sought to be impleaded in the local jurisdiction,
the added inhibition is expressed in the maxim par in parem, non habet
imperium. All states are sovereign equals and cannot assert jurisdiction over one
another. A contrary disposition would, in the language of a celebrated case,
“unduly vex the peace of nations.” (Da Haber v. Queen of Portugal, 17 Q. B. 171)

b. Foreign agent operating within the Philippine territory

➢ Limitation on the power of the Executive to declare a diplomatic status
- There exist specific limitations drawn by international law and host country laws
to prevent potential abuses of this protection.
- The primary limitation to diplomatic immunity is the potential for a waiver.
If a diplomat’s home country discerns that the diplomat has violated the laws of
the host country, or if the diplomat’s actions don’t align with their duties, the home
country can waive the diplomat’s immunity. In such cases, the diplomat becomes
the subject to the jurisdiction of the host country.

Moreover, diplomatic immunity doesn’t cover every action of diplomats. Actions

not falling within their professional duties, also known as “acta non jure
gestionis”, are not covered by immunity.

● A foreign agent, operating within a territory, can be cloaked with immunity from suit but
only as long as it can be established that he is acting within the directives of the sending
state. The consent of the host state is an indispensable requirement of basic courtesy
between the two sovereigns.

c. Warships and government ships operated for non-commercial purposes

subject to the provision of Arts. 30 and 31 of UNCLOS

Article 29: Definition of warships

For the purposes of this convention, “warship” means a ship belonging to the
armed forces of a state bearing the external marks distinguishing such ships of its
nationality, under the command of an officer duly commissioned by the government of
the state and whose name appears in the appropriate service list or its equivalent, and
manned by a crew which is under regular armed forces discipline.
 Article 30: Non-compliance by warship with the laws and regulations of the
coastal State
If any warship does not comply with the laws and regulations of the coastal State
concerning passage through the territorial sea and disregards any request for
compliance therewith which is made to it, the coastal State may require it to leave the
territorial sea immediately.

Article 31: Responsibility of the flag State for damage caused by a warship or
other government ship operated for non-commercial purposes

The flag State shall bear international responsibility for any loss or damage to the
coastal State resulting from the non-compliance by a warship or other government ship
operated for non-commercial purposes with the laws and regulations of the coastal State
concerning passage through the territorial sea or with the provisions of this convention or
other rules of international law.

d. Jure imperii functions of the government

Jure imperii - “by right of sovereignty” in Latin.
- It refers to the public actions taken by a nation as a sovereign state. The
sovereign is usually porteccted from being sued or held liable in a foreign country
for these actions.
- This is known as the restrictive principle of sovereign immunity.

e. Jure gestionis functions of the government

Jure gestionis - “by way of doing business” in Latin
- It refers to the country’s actions that are related to business or private matters,
rather than its public or government actions.
- This means that if a foreign country does something related to business, it can be
sued in court, but if it does something related to its government, it cannot be
sued. This is because of the Foreign Sovereign Immunities Act:

❖ The FSIA is a law that allows people to sue foreign governments in

certain situations. This law only applies to cases where the claim is
related to the private actions of the foreign government, not their public
actions.

❖ The FSIA was created because more and more Americans were doing
business with foreign governments and companies, and there needed to
be a way to resolve disputes in American courts.

f. International organizations, its officials, and functionaries

1. The immunity granted to officials and personnel of international organizations
extends only to acts done in their official capacities.
 2. International organizations enjoy almost absolute, if not absolute, immunity. This
grant of immunity protects their affairs from political pressure or control by the
host country and prevents local courts from exercising jurisdiction over them.
- On the other hand, personnel of international organizations are entitled to
immunity only for acts performed in their official capacity.

3. They enjoy functional immunity or only that necessary to exercise the

organization’s functions and fulfill its purpose. Immunity does not apply to their
private acts, crimes, and those acts contrary to law.

5. Suit against government agencies

- While the people, as the sovereign, and the state representing that sovereignty, or the
government as a whole, representing the supreme authority of the state, cannot be sued
in any court, no individual officer of government and no single office or agency of
government can claim such exemption.

- No official or agency of the government is above the law and everybody who is under the
law is amenable to be sued in court.

a. Incorporated

b. Non-incorporated
- An unincorporated government agency without any seperate 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.

c. Government-owned and controlled corporations

- Under the Presidential Decree No. 242 (PD 242), all disputes and claims solely
between government-owned or controlled corporations, shall be administratively
settled or adjudicated by the Secretary of Justice, the Solicitor General, or the
Government Corporate Counsel, depending on the issues and government
agencies involved. As regards cases involving only questions of law, it is the
Secretary of Justice who has jurisdiction.

d. Local governments

6. Suit against public officers

- The doctrine of immunity from suit will not apply and may not be invoked where the
public official is being sued in his private and personal capacity as an ordinary citizen.
The cloak of protection afforded to the officers and agents of the government is removed
the moment they are sued in their individual capacity.
 - This situation usually arises where the public official acts without authority or in excess of
the powers vested in him. It is a well-settled principle of law that a public official may be
liable in his personal private capacity for whatever damage he may have caused by his
act done with malice and in bad faith or beyond the scope of his authority and
jurisdiction.

a. Sued without prior consent

- The state may not be sued without its consent. Likewise, public officials may not
be sued for acts done in the performance of their official functions or within the
scope of their authority.

b. Sued because of performance of ultra vires acts

- The general rule is that public officials can be held personally accountable for
acts claimed to have been performed in connection with official duties where they
have acted ultra vires or where there is showing of bad faith.

c. Sued in personal capacity

- Public officers may be held personally liable for acts done with malice, bad faith,
or gross negligence. Personal liability entails that the public officer must
personally shoulder the payment of damages.

- Public officers may also be held liable in their official capacity if their wrongful
acts were preformed in the course of their duties but without malice or bad faith.
In such cases, the government may be held liable for damages, but the officer
may not bear personal liability.

- If several public officers conspire or collaborate in the commission of an unlawful

act, they may be held jointly or solidarily liable for the resulting damages.

7. Forms of consent
a. Expressed consent- express consent to be sued
- The law expressly grants the authority to sue the State or any of its agencies.

● 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 claim involving liability arising from contract, express or
implied, which could serve as a basis of civil actions between private parties.
(Republic vs. NLRC, October 17, 1996)
● Consent to be Sued under Special Law
- Under a special law consent to be sued may come in the form of a private bill
authorizing a named individual to bring suit on a special claim. A special law was
passed to enable a person to sue the government for an alleged tort.
(United States vs. Guinto, February 26, 1990)

- The consent of the state to be sued must emanate from statutory authority.
Waiver of the State immunity can only be made by an act of the legislative body.
(Republic of the Philippines vs. Feliciano, March 12, 1987)

b. Implied consent: is conceded when:

a.) the state itself commences litigation, thus opening itself to a counter-claim, or

b.) when it enters into a contract

(Republic vs. NLRC, October 17, 1996)

1. The State enters into a private contract.

a. The contract must be entered into by the proper officer and within the scope of
his authority.
b. UNLESS: The contract is merely incidental to the performance of a governmental
function.

2. The State enters into an operation that is essentially a business operation.

a. UNLESS: the operation is incidental to the performance of a governmental
function (e.g. arrastre services)
b. Thus, when the State conducts business operations through a GOCC, the latter
can generally be sued, even if its charter contains no express “sue or sued”
clause.

3. Suit against an incorporated government agency.

a. This is because they generally conduct propriety business operations and have
charters which grant them a separate juridical personality.

4. The State files suit against a private party.

a. UNLESS: the suit is entered into only to resist a claim.

● Implied Consent to be Sued

- The immunity of the state from suits does not deprive it of the right to sue private
parties in its own courts
(Frolian vs. Pan Oriental Shipping Co., Sept. 30, 1954)

- Implied consent is conceded when the state itself commences litigation, thus
opening itself to a counter-claim.
(Republic vs. NLRC, October 17, 1996)
 ● When the State Commences Litigation
- 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.
(DOH vs. Phil. Pharma Wealth, Feb. 20, 2013)

● When the State Enters into a Contract

➢ There is implied consent when the state enters into a contract or itself
commences litigation.

➢ However, it must be clarified that when a state enters into a contract, the state
will be deemed to have impliedly waived its non-suability only if it has entered
into a contract in its proprietary or private capacity.
(DOH vs. Phil. Pharma Wealth, Feb. 20, 2013)

➢ And because these activities by the state have been necessary to distinguish
them:

Jure imperii - sovereign and governmental acts - there is immunity

Jure gestionis - private, commercial and proprietary acts - there is waiver of
immunity
(US vs. Ruiz, May 22, 1985)

➢ 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 when the contracts relate to exercising its sovereign functions.

8. Suability and Liability - the consent to be sued does not include the consent to be liable.

Suability does not mean Liability

● Suability does not necessarily mean liability on the part of the particular instrumentality
or agency of the government.

● 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 liability.
(Republic vs. NLRC, October 17, 1996)

When the Suit is deemed against the state

● The Suit is deemed against the State when:

a. The Republic is sued by its name;
b. The suit is against an unincorporated government agency;
c. The suit is on its face against a government officer but the case is such that the
ultimate liability will belong not to the officer but to the government.
(Republic vs. Sandoval, March 19, 1993)

Immunity from suit by the state cannot be used to institutionalize irresponsibility

● This doctrine of immunity from suit by the state cannot be used to institutionalize
irresponsibility and non-accountability nor grant a privileged status not claimed by any
other official of the Republic.

● This Court has made it quite clear that even a “high position in the government does not
confer a license to persecute or recklessly injure another”
(Chavez vs. Sandiganbayan, January 24, 1991)

9. Judgement and execution

a. Procedure in executing claims against the government
- Commonwealth Act No. 327, as amended by Presidential Decree No. 1445,
requires that all money claims against the government must first be filed before
the Commission on Audit, which, in turn, must act upon them within 60 days.
Only when the Commission on Audit rejects the claim can the claimant elevate
the matter to this Court on certiorari and, in effect, sue the state.

b. Prohibition against levy and garnishment of public funds

➢ Reason and basis

- On October 27, 2005, the RTC-Br. 223 issued an order denying both motions on
the ground that pursuant to Section 305(a) of the Local Government Code,
government funds could not be subjected to execution and levy, or to
garnishment for that matter, unless there was a corresponding appropriation law
or ordinance.

- The RTC-Br. 223, however, stated that respondents must still honor their
obligation and that petitioners were entitled to a full and just compensation
considering that its decision had long become final and executory. Accordingly, it
 directed respondents to comply with its decision and to immediately pay
petitioners the sums of money specified in the said decision.

- Again, petitioners’ motion was denied by the RTC-Br. 223 in its Order, dated
September 6, 2006. The RTC-Br. 223 reiterated the rule that government funds
may not be subjected to execution and levy, or to garnishment, unless there was
a corresponding appropriation law or ordinance.

- It also cited the Supreme Court Administrative Circular No. 10-00, fated October
25, 2000, which enjoined the observance of utmost caution, prudence and
judiciousness in the issuance of writs of execution to satisfy money judgements
against government agencies and local government units.

➢ General rules and exceptions

General Rule: Government funds cannot be seized by virtue of writs of execution or
garnishment. This doctrine has been explained in Commissioner of Public Highways v.
San Diego:

The universal rule that where the State gives its consent to be sued by private
parties either by general or special law, it may limit claimant’s action “only up to the
completion of proceedings anterior to the stage of execution” and that the power of the
Courts ends when the Judgement is rendered, since government funds and properties
may not be seized under writs of execution or garnishment to satisfy such judgements, 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.

Simply put, “no money can be taken out of the treasury without an appropriation.”

General Rule: Whether the money is deposited by way of general or special deposit, they
remain government funds and are not subject to garnishment.

Exception: A law or ordinance has been enacted appropriating a specific amount to pay a valid
government obligation, then the money can be garnished.

c. Primary jurisdiction of Commission of Audits to examine, audit, and settle all

claims due from the government (Read Presidential Decree No. 1445)

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 donation 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.