STATE IMMUNITY

The 1987 Philippine Constitutionexpressly provides that “the State may not be sued without its consent”
(Sec.3, Art. XVI, 1987 Philippine Constitution).

The basic postulate enshrined in the Constitution that “[t]he State may not be sued without its consent,”
reflects nothing less than a recognition of the sovereign character of the State and an express affirmation of
the unwritten rule effectively insulating it from the jurisdiction of courts. It is based on the very essence of
sovereignty. As has been aptly observed by Justice 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. 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. We have had
occasion to explain in its defense, however, that a continued adherence to the doctrine of non-suability cannot
be deplored, for the loss of governmental efficiency and the obstacle to the performance of its multifarious
functions would be far greater in severity than the inconvenience that may be caused private parties, if such
fundamental principle is to be abandoned and the availability of judicial remedy is not to be accordingly
restricted. (Department of Agriculture v. NLRC, 227 SCRA 693, Nov. 11, 1993 [Vitug])
 a. This is based on “juridical and practical notion that
the state can do no wrong which is a restatement of the
expression the King can do no wrong” (Santos v.
Santos, 92 Phil. 281).
 b. A sovereign is exempt from suit, not only because
of any formalconception 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 theright depends (Kawananakoa v. Polybank,
205 U.S. 349).
 c. 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 (Providence
Washington Insurance Co. v. Republic of the Philippines, 29 SCRA
598).
A suit is against the state in the
following instances:
 a. When the Republic is sued by name;
 b. When the suit is against an unincorporated government agency;
 c. When the suit is on its face against a government officer but the
case is such that ultimate liability will belong not to the officer but
to the government.
In all the above instances, suability depends on whether the State
has consented to be sued (Bernas, The 1987Philippine Constitution:
AComprehensive Reviewer, 2011 Ed., p.530).
 SUITS AGAINST GOVERNMENT AGENCIES
 A. Unincorporated. Jurisprudencefurther instructs that when a suit is
directed against an unincorporated governmentagency, which,
because it is unincorporated, possesses no juridical personality of its
own, the suit is against the agency'ʹs principal, i.e., the State
(Republic v. Domingo, 657 SCRA 621).

This being so, it is necessary to determine the nature of the

functions in which the agency is engaged, so as to hold it suable if they
are proprietary in nature and not suable if they are governmental.
The test in every case is the nature of the primary functions being
discharged (Cruz, Philippine Political Law, 2014 Ed., p. 72).
 i. If governmental: No suit without consent (Sanders v. Veridiano, supra.) The non-
suability is available to the agency even if it is shown that it is engaged not only in
governmental functions but also as a side line, or incidentally, in proprietary
enterprises (Cruz, Philippine Political Law, 2014 Ed., p. 73)

Case Law:
 The volume of private jobs done, in comparison with government jobs, is only one--
half of 1 per cent, and in computing the costs for work done for private parties, the
Bureau does not include profit because it is not allowed to make any.Clearly, while the
Bureau of Printing is allowed to undertake private printing jobs, it cannot be pretended
that it is thereby an industrial or business concern. The additional work it executes
for private parties is merely incidental to its function, and although such work
may be deemed proprietary in character, there is no showing that the employees
performing said proprietary function are separate and distinct from those
employed in its general governmental functions (Bureau of Printing v. Bureau of
Printing Employees Association, 1 SCRA 340).
 Although said arrastre function may be deemed proprietary, it is a
necessary incident of the primary and governmental function of the
Bureau of Customs, so that engaging in the same does not necessarily
render said Bureau liable to suit (MobilPhilippines Exploration, Inc. v.
Customs Arrastre Service, 18SCRA 1120).
 ii. If proprietary: suit will lie, because when the state engages in
principally proprietary functions, then it descends to the level of a
private individual, and may, therefore, be vulnerable to suit (National
Airports Corporation v. Teodoro, 91 Phil. 203)
Case Law:
 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(Air Transport Office v.
Ramos, 664 SCRA 36).
 B. Incorporated. If the charter provides that the agency can sue and be sued, the suit will lie,
including one for tort. The provision in the charter constitutes express consent onthe part of the
state to be sued (Nachura, Outline Reviewer in Political Law, 2009 Ed., p. 39; see PNB v. CIR, 81
SCRA 314; Rayo v.CFI Bulacan, 110 SCRA 460; SSS v. Court Appeals, 120 SCRA 707)
 The Central Bank may be sued. Under Section 4 of the Central Bank Act No. 265, as amended,
the Central Bank may sue or be sued. If a government agency was vested by law with a juridical
personality separate and distinct from that of the State, it may be sued. A suit against it will not
amount to a suit against the State, since it has a separate juridical personality.
 C. Municipal corporations. They are agencies of the State when they are engaged in governmental
functions and, therefore, should enjoy the sovereign immunity from suit. However, they are subject to suit
even in the performance of such functions because their respective charters provide that they can sue and be
sued (Municipality of San Fernando, La Union v. Firme, 195 SCRA 692). One of the corporate powers of
local government units, as enumerated in Sec. 22, Local Government Code, is the power to sue and be sued
(Nachura, Outline Reviewer in Political Law, 2009 Ed., p. 39).
 SUITS AGAINST PUBLIC OFFICERS
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 (Shauf v. Court of Appeals, 191 SCRA 713).

 It is clear that a public officer may be sued as such to compel him to do an act required by
law, as where, say, a register of deeds refuses to record a deed of sale; or to restrain a
Cabinet member, for example, from enforcing a law claimed to be unconstitutional; or to
compel the national treasurer to pay damages from an already appropriated assurance fund;
or the commissioner of internal revenue to refund tax over-payments from a fund already
available for the purpose; or, in general, to secure a judgment that the officer impleaded
may satisfy by himself without the government itself having to do a positive act to
assist him (Sanders v. Veridiano, supra).
 Where a public officer has committed an ultra vires act, or where there is a
showing of bad faith, malice or gross negligence, the officer can be held
personally accountable, even if such acts are claimed to have been performed
in connection with the official duties (Wylie v. Rarang, 209 SCRA 357)
 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 committee while he
occupied a public position.
 Case Law:
In this case, defendant who is the Chairman of the National Parks Development Committee, was acting under the spirit of
revenge, ill-will, evil motive and personal resentment against plaintiff (Lansang v. Court of Appeals, G.R. 102667,
February 23, 2000).

As early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea that he is a public agent
acting under the color of his office when his acts are wholly without authority. Until recently in 1991 (Chavez v.
Sandiganbayan, 193 SCRA 282 [1991]), this doctrine still found application, this Court saying that immunity from suit
cannot institutionalize irresponsibility and non-accountability nor grant a privileged status not claimed by any other
official of the Republic. (Republic v. Sandoval, 220 SCRA 124, March 19, 1993, En Banc [Campos, Jr.])

Exception to the exception:

 Acts of a Special Agent under Article 2180 of the Civil Code
 If a public officer fails to comply with a ministerial obligation imposed by law, the party in whose favor the obligation
was constituted may file a petition for mandamus against him. Thus, a petition for mandamus may be filed against a
public officer with the task of releasing public funds appropriated for the payment of benefits to claimants.
 Question: Is the Rule that the State may not
be sued at all, Absolute?
 State may at times be sued. The State's consent may be given either expressly or impliedly.
Express consent may be made through a general law (i.e., Commonwealth Act No. 327, as
amended by Presidential Decree No. 1445 [Sections 49-50], which requires that 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) or a special law. [Merit v. Gov’t.
of P.I., 34 Phil. 311)
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 action between the private parties.”
Implied consent, on the other hand, is conceded when:

1. the State itself commences litigation, thus opening itself to a counterclaim.

As a rule, when the State files a suit, it becomes vulnerable to suit or
counterclaim (see Froilan v. Pan Oriental Shipping, G.R. No. L‑6060,
September 30, 1950). But not if the State intervenes in a suit not for the
purpose of asking any affirmative relief but for the purpose of resisting the
claim precisely because of State immunity (Lim v. Brownell, 107 Phil.
345).

2. 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. (Department of Agriculture v.
NLRC, 227 SCRA 693, Nov. 11, 1993 [Vitug])
4. Equity & Justice -EPG Construction Co. vs. Vigilar, 354 SCRA 566,
March 16, 2001[The doctrine should not used to perpetrate an Injustice
on a citizen.]

-the Supreme 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.

5. Non payment of just compensation in expropriation case.Section 9,

Article Ill of the 1987 Constitution provides: "Private property shall not be
 Question: What is the Restrictive Doctrine of State Immunity from Suit?

 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 contracts relate 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.”
(Department of Agriculture v. NLRC, 227 SCRA 693, Nov. 11, 1993 [Vitug])
 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 United States of America v. Ruiz (136 SCRA 487), where the questioned
transaction dealt with the improvements on the wharves in the naval installation
at Subic Bay, Supreme Court 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 principle 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.

In the case of U.S. vs. Ruiz (136 SCRA 487), the Supreme Court distinguished between
contracts entered into by the state in jure imperii (sovereign acts) and jure gestionis
(commercial or proprietary acts). Where the contract is in pursuit of a sovereign activity,
there is no waiver of immunity, and no implied consent may be derived therefrom
(Nachura, Outline Reviewer in Political Law, 2009, p.43).
 In the case of U.S. vs. Ruiz (136 SCRA 487), the Supreme Court distinguished between
contracts entered into by the state in jure imperii (sovereign acts) and jure gestionis
(commercial or proprietary acts). Where the contract is in pursuit of a sovereign activity, there
is no waiver of immunity, and no implied consent may be derived therefrom (Nachura, Outline
Reviewer in Political Law, 2009, p.43).

The contract for the repair of wharves was a contract in jus imperii, because the wharves were
to be used in national defense, a governmental function (U.S. vs. Ruiz). Conversely, the
contract bidded out for barbershop facilities in the Clark Field US Air Force Base was deemed
commercial (U.S. vs. Guinto, 182 SCRA 644).
 As applied:
 This is now the case in the loan agreement between the Duterte administration and China for
Philippine infrastructure projects. Critics have questioned the provision in the contract wherein the
government waives its sovereign immunity to be sued in case of disputes.

 The “waiver of sovereign immunity” is, in fact, a fairly standard provision in loan contracts
between foreign lenders and a sovereign state or its agencies (which by extension also have immunity
from legal action).

 For some other loans to governments and their instrumentalities, such waiver is implied in
provisions that make the borrower subject to arbitration proceedings in case of disputes. A
government allowing itself to be subjected to arbitration proceedings indicates its waiving of its
sovereign immunity from suit.
 The Supreme Court, in its decision in February 2012 saying Northrail project
contractor China National Machinery & Equipment Corp. was not entitled to
immunity from suit, pointed out that “(t)he mantle of State immunity cannot be
extended to commercial, private and proprietary acts… 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 when it enters into business contracts.” Loan contracts fall
squarely as business contracts.

The Japan International Cooperation Agency, a major source of financial aid for the
Philippines, has a specific provision on the waiving of sovereign immunity in its loan
documents. It requires the borrower to “irrevocably waive (i) any and all of its privileges
and sovereign immunities from and against any lawsuit and enforcement of arbitral award
and (ii) any and all privileges and sovereign immunities on any of its properties from and
against any attachment, enforcement and any other legal proceedings, both of which it may
be entitled to as a legal defense under any applicable international or domestic law.”
 This provision is designed to give creditors recourse against any arbitrary
action by the borrowing government that will affect the repayment of its
loans. Abrupt change in government through a military takeover is one
example.

This was the reason why the clamor for then President Cory Aquino to
unilaterally repudiate millions of dollars in questionable foreign loans
contracted by the Marcos regime did not prosper. All her administration
could do was renegotiate the terms of the loans, to seek relief such as lower
interest and longer repayment periods.

Perhaps the current public concern over the waiving of sovereign

immunity revolves around the fact that the lender is China, not any
friendly state such as the Unites States or Japan. China is not an
uninterested party in this case, having had a track record of
undermining Philippine interests and coveting the country’s territory
and resources.
By virtue of Presidential Decree No. 1807, the Philippines waived
its immunity from suit with respect to its foreign debts. Section 1
of Presidential Decree No. 1807 reads in part:

In instances where the law expressly authorizes the Republic of

the Philippines to contract or incur a foreign obligation, it may
consent to be sued in connection therewith. The President of the
Philippines or his duly designated representative may, in behalf of
the Republic of the Philippines, contractually agree To waive any
claim to sovereign immunity from suit or legal proceedings and
from set-off, attachment or execution with respect to its property,
and to be sued in any appropriate jurisdiction in regard to such
 PRESIDENTIAL DECREE NO. 1807

PRESCRIBING THE PROCEDURE WHEREBY THE REPUBLIC OF THE PHILIPPINES

MAY WAIVE SOVEREIGN IMMUNITY FROM SUIT AND OTHER LEGAL
PROCEEDING WITH RESPECT TO ITSELF OR ITS PROPERTY IN CONNECTION
WITH FOREIGN OBLIGATIONS CONTRACTED BY IT PURSUANT TO LAW.

WHEREAS, in the pursuit of economic growth and development, it has become imperative for
the Republic of the Philippines to enter into contracts or transactions with international
banking, financial and other foreign enterprises;

WHEREAS, recognizing this need, existing legislation expressly authorize the Republic of the
Philippines to contract foreign obligations, including borrowings in foreign currency, and to
guarantee foreign obligations of corporations and other entities owned or controlled by the
Government of the Philippines; .

WHEREAS, circumstances in the international market may require that sovereign states
entering into contracts or transactions make express waivers of sovereign immunity in
connection with such contracts or transactions;
WHEREAS, it is in the national interest that a procedure be prescribed with respect to
the waiver of sovereign immunity of the Republic of the Philippines in respect of
international contracts or transactions entered into by it:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the

Philippines, by virtue of the powers vested in me by the Constitution, do hereby order
and decree:

Section 1. Procedure for, and Conditions of, Waiver of Sovereign Immunity. — In

instances where the law expressly authorizes the Republic of the Philippines to contract
or incur a foreign obligation, it may consent to be sued in connection therewith. The
President of the Philippines or his duly designated representative may, in behalf of the
Republic of the Philippines, contractually agree to waive any claim to sovereign
immunity from suit or legal proceedings and from set-off, attachment or executive with
respect to its property, and to be sued in any appropriate jurisdiction in regard to such
foreign obligation.
 SCOPE OF PROHIBITION AGAINST SUING THE STATE
 Because of its immunity from suit, the State cannot be compelled to litigate against other parties without its consent.
Thus, it cannot be compelled to interplead in an action filed by a private party. [Alvarez v. Commonwealth of the
Philippines, 65 Phil. 302, 313 (1938)].

 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 (University of the Philippines v. Dizon, 679 SCRA 54,
Municipality of San Fernando, La Union v. Firme, 195 SCRA 692).

 Government Funds may not be subject to Garnishment- The funds of the UP are government funds that are public
in character. They include the income accruing from the use of real property ceded to the UP that may be spent only
for the attainment of its institutional objectives. Hence, the funds subject of this action could not be validly made the
subject of writ of execution or garnishment. The adverse judgment rendered against the UP in a suit to which it had
impliedly consented was not immediately enforceable by execution against the UP, because suability of the State did
not necessarily mean its liability. (UP v. Dizon, G.R. No. 171182, 679 SCRA 54, 23 August 2012, 1st Div. [Bersamin])
Consent to be sued does not include consent to the execution of judgment against it (Nachura,
Outline Reviewer in Political Law, 2009, p.44).

When the State consents to be sued, it does not necessarily concede its liability. By consenting
to be sued, it waives immunity from suit, but it does not waive its lawful defenses to the action.
Even when the government has been adjudged liable in a suit to which it has consented, it does
not necessarily follow that the judgment can be enforced by execution against its funds for every
disbursement of public funds must be covered by a corresponding appropriation passed by the
Legislature (Meritt vs. Government, 31 SCRA 311, 318; Republic vs. Villasor, 54 SCRA 84).
 Suability v. Liability
 The mere fact that the State is suable does not mean that it is a liable; or to
put it in another way, waiver of immunity by the State does not mean
concession of its liability (Cruz, Philippine Political Law, 2014 Ed., p. 77).

Suability Liability

Suability depends on the consent of Liability depends on the applicable

the state to be sued law and the
established facts.
Republic v. NLRC

Nonetheless, we have likewise since explained that suability does not necessarily mean liability on
the part of the particular instrumentality or agency of the government; hence-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.

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 law 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 be paralyzed or
disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by
law.30 (Footnotes omitted)
Municipal of Hagonoy Bulacan v. Dumdum

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.

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 appropriations 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. x x x
UP v. Dizon

The funds of the UP are government funds that are public in character.
They include the income accruing from the use of real property ceded to the
UP that may be spent only for the attainment of its institutional objectives.
Hence, the funds subject of this action could not be validly made the subject
of the RTC’s writ of execution or garnishment. The adverse judgment
rendered against the UP in a suit to which it had impliedly consented was not
immediately enforceable by execution against the UP, because suability of the
State did not necessarily mean its liability.

A marked distinction exists between suability of the State and its liability.
As the Court succinctly stated in Municipality of San Fernando, La Union v.
Firme:80 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
 CONSEQUENCE OF WAIVER OF
IMMUNITY
 A. Right to Defend- By consenting to be sued, the State simply waives its immunity from
suit. It does not concede its liability to the plaintiff. The State retains the right to raise any
lawful defense. When the State waives its immunity from suit, it is merely giving the
plaintiff a chance to prove that the State is liable.

 B. Execution- Even if the State consented to be sued, it does not follow that a judgment
against it can be enforced by execution. The waiver of its immunity from suit does not
include a waiver of its immunity from execution. Disbursement of public funds must be
covered by a corresponding appropriation by Congress.
The remedy of the plaintiff is to file a claim with the Commission on Audit. Section 7 of
Act No. 3083 provides: 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
hereof 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.

If Congress did not appropriate money to satisfy the judgment, it cannot be paid. No money
can be paid out of public funds without an appropriation.1 This is provided in Subsection 1,
Section 29, Article VI of the 1987 Constitution.

C. Liability for Interest and Costs- Even if the State waived its immunity from suit, it
cannot be held liable for interest and costs of suit unless a statute expressly makes it liable.
As a rule, no costs can be taxed against the Republic of the Philippines. However, costs
should be assessed against the Republic of the Philippines in expropriation cases. This is
pursuant to Section 12, Rule 67 of the Rules of Court, which reads: The fees of the
commissioners shall be part of the costs of the proceedings. All costs, except those of rival)l
claimants litigating their claims, shall be paid by the plaintiff, unless an appeal is taken by
the owner and the judgment is affirmed, in which event the costs of the appeal shall be paid
by the owner.
 EXECUTION
 A. Separate Juridical Personality- The Supreme Court has repeatedly held that if a
government agency has a separate juridical personality, its funds may be garnished. Should not a
further inquiry be made as to what is the source of such funds and for what purpose such funds
were appropriated? If the funds sought to be garnished came from a legislative appropriation and
they were appropriated for a certain special purpose, they should be exempt from garnishment.
Otherwise, the funds will be diverted from the purpose for which they were appropriated.

 B. Waiver of Exemption from Execution- Under Section 1 of Presidential Decree No; 1807,
the Republic of the Philippines waived its immunity from execution. However, this waiver
should be limited to the patrimonial properties of the Republic of the Philippines and should
not be expanded to cover properties for public use and for public service.

 The application of the principle of State immunity will keep from involving a delicate
balancing act between the claim of private individuals for redress for violation of their
rights and the need to protect the State from suability because of the demands of public
interest.
OTHER MATTER/ISSUE RELATED TO
IMMUNITY OF THE STATE FROM SUIT
 Diplomatic Immunity. The doctrine is also available to foreign States insofar as they are
sought to be sued in the courts of the local State (Syquia v. Almeda Lopez, 84 Phil. 312).
The added basis in this case is the principle of sovereignty equality of States, under which
one State cannot assert jurisdiction over another in violation of the maxim par in parem
non habet imperium. To do so would “unduly vex the peace of nations” (Cruz, Philippine
Political Law, 2014 Ed., p, 49).

 Under the Vienna Convention on Diplomatic Relations, a diplomatic agent enjoys

immunity from criminal jurisdiction of the receiving state except in the case of an action
relating to any professional or commercial activity exercised by the diplomatic agent in the
receiving state outside his official functions (Liang v. People, G.R. No. 125865, January
28, 2000).
 a. 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 (Holy See v. Rosario, 238
SCRA 524; China National Machinery Equipment Corporation v. Sta.
Maria, 665 SCRA 189).
 b. As it stands now, the application of the doctrine of
immunity from suit has been restricted to sovereign or
governmental activities (jure imperii). The mantle of state
immunity cannot be extended to commercial, private and
proprietary acts (jure gestionis) (JUSMAG v. NLRC, 239
SCRA 224; China National Machinery
 c. Mere entering into a contract by a foreign state with a private
party cannot be the ultimate test. Such an act can only be the start
of the inquiry. The logical question is whether the foreign state is
engaged in the activity in the regular course of business. If the
foreign state is not engaged regularly in a business or trade, the
particular act or transaction must then be tested by its nature. If
the act is in pursuit of a sovereign activity, or an incident thereof,
then it is an act jure imperii, especially when it is not undertaken
for gain or profit (China National Machinery Equipment
Corporation v. Sta. Maria, supra).
 d. The State’s immunity extends to Head of State who is the
personification of the state (see Mighell v. Sultan of Johore, 1 QB 149,
cited in Nachura, Outline Reviewer in Political Law, 2009 Ed., p. 660).
The State’s diplomatic agents, including consuls to a certain extent, are
also exempt from the jurisdiction of local courts and administrative
tribunals (Nachura, Outline Reviewer in Political Law, 2009 Ed., p. 36)
of his authority or jurisdiction (Liang v. People, supra).
 e. The United Nations, as well as its organs and specialized agencies, are likewise
beyond the jurisdiction of the local courts (Convention on Privileges and
Immunities of Specialized Agencies of the United Nations; World Health
Organization v. Aquino, 48 SCRA 242).

 f. An intergovernmental organization, including its departments, enjoys functional

independence and freedom from control of the state in whose territory its office is
located. Invocation of estoppel with respect to the issue of jurisdiction is
unavailing because estoppel does not apply to confer jurisdiction to a tribunal that
has none over a cause of action. Jurisdiction is conferred by law. Where there is
none, no agreement of the parties can provide one (SEAFDEC v. NLRC, 241
SCRA 580).
 Exemption from legal requirements. When the state litigates, either directly or
through its authorized officers, it is not required to put up a bond for damages, or
an appeal bond since it can be always assumed that it is always solvent (Araneta
v. Gatmaitan, 101 Phil. 323, cited in Cruz, Philippine Political Law, 2014 Ed., p,
75)

 This exemption, however, does not, as a general rule, apply to GOCCs for the
reason that the latter has a personality distinct from its shareholders. Thus, while a
GOCC’s majority stockholder, the State, will always be presumed solvent, the
presumption does not necessarily extend to the GOCC itself (Banahaw
Broadcasting Corporation v. Pacana, 649 SCRA 196).
 However, when a GOCC becomes a “government machinery to carry out a declared
government policy,” it becomes similarly situated as its majority stockholder as there is
the assurance that the government will necessarily fund its primary functions. Thus, a
GOCC that is sued in relation to its governmental functions may be, under appropriate
circumstances, exempted from the payment of appeal fees (Ibid).
 Neither can the State generally be asked to pay the legal fees prescribed in the Rules of
Court or the cost of the suit (Rules 141 and 142, Rules of Court).
 Interest is also not chargeable against it except when it has expressly stipulated to pay it
or when interest is allowed by an act of the legislature or in eminent domain cases where
damage sustained by the owner takes the form of interest at the legal rate (Arasola v.
Trinidad, 40 Phil. 252).
 The statute of limitation does not run against the State unless the
contrary is expressly provided by law, although this rule is not observed
where the State is engaged in private business (Government of the
Philippine Islands v. Monte de Pieded,G.R. No. L-9959, December 13,
1916).
 The government cannot be assessed one-half of the fees paid to the
commissioner who determined the just compensation for the property
under expropriation (Republic v. Garcia, 679 SCRA 54).
World Heritage Site because of its rich marine bio-diversity) in the Sulu Sea
caused by the USS Guardian, an American naval vessel when it ran aground
there in the course of its voyage to Indonesia from its base in Okinawa, Japan,
will not prosper for lack of jurisdiction following the doctrine of sovereign
equality of all States. In effect, the suit is a suit against the US government
and, therefore, should be dismissed.

- The waiver of immunity from suit of the US under the Visiting Forces
Agreement (VFA) applies only to waiver from criminal jurisdiction, so that
if an American soldier commits an offense in the Philippines, he shall be tried
by Philippine courts under Philippine laws. The waiver did not include the
special civil action for the issuance of a Writ of Kalikasan.

- Also, the demand for compensation for the destruction of our corrals in
Tubbataha reef has been rendered moot and academic. After all, the US already
signified its intention to pay damages, as expressed by the US embassy officials
in the Philippines, the only request is that a panel of experts composed of
scientists be constituted to assess the total damage caused to our corrals there,
which request is not unreasonable.