Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

The Republic of the Philippines, as mentioned at the outset, did right in filing this certiorari and prohibition proceeding. What was done by respondent Judge is not in conformity with the dictates of the Constitution. . 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." 5 Sociological jurisprudence supplies an answer not dissimilar. So it was indicated in a recent decision, Providence Washington Insurance Co. v. Republic of the Philippines, 6 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." 7 This fundamental postulate underlying the 1935 Constitution is now made explicit in the revised charter. It is therein expressly provided: "The State may not be sued without its consent." 8 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. Thus in the recent case of Commissioner of Public Highways v. San Diego, 9 such a well-settled doctrine was restated in the opinion of Justice Teehankee: "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." 10 Such a principle applies even to an attempted garnishment of a salary that had accrued in favor of an employee. Director of Commerce and Industry v. Concepcion, 11 speaks to that effect. Justice Malcolm as ponente left no doubt on that score. Thus: "A rule which has never been seriously questioned, is that money in the hands of public officers, although it may be due government employees, is not liable to the creditors of these employees in the process of garnishment. One reason is, that the State, by virtue of its sovereignty, may not be sued in its own courts except by express authorization by the Legislature, and to subject its officers to garnishment would be to permit indirectly what is prohibited directly. Another reason is that moneys sought to be garnished, as long as they remain in the hands of the disbursing officer of the Government, belong to the latter, although the defendant in garnishment may be entitled to a specific portion thereof. And still another reason which covers both of the foregoing is that every consideration of public policy forbids it."
12

G.R. No. L-30671 November 28, 1973 REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION, respondents. Office of the Solicitor General Felix V. Makasiar and Solicitor Bernardo P. Pardo for petitioner. Andres T. Velarde and Marcelo B. Fernan for respondents.

FERNANDO, J.: The Republic of the Philippines in this certiorari and prohibition proceeding challenges the validity of an order issued by respondent Judge Guillermo P. Villasor, then of the Court of First Instance of Cebu, Branch I, 1 declaring a decision final and executory and of an alias writ of execution directed against the funds of the Armed Forces of the Philippines subsequently issued in pursuance thereof, the alleged ground being excess of jurisdiction, or at the very least, grave abuse of discretion. As thus simply and tersely put, with the facts being undisputed and the principle of law that calls for application indisputable, the outcome is predictable. The Republic of the Philippines is entitled to the writs prayed for. Respondent Judge ought not to have acted thus. The order thus impugned and the alias writ of execution must be nullified. In the petition filed by the Republic of the Philippines on July 7, 1969, a summary of facts was set forth thus: "7. On July 3, 1961, a decision was rendered in Special Proceedings No. 2156-R in favor of respondents P. J. Kiener Co., Ltd., GavinoUnchuan, and International Construction Corporation, and against the petitioner herein, confirming the arbitration award in the amount of P1,712,396.40, subject of Special Proceedings. 8. 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. 9. Pursuant to the said Order dated June 24, 1969, the corresponding Alias Writ of Execution [was issued] dated June 26, 1969, .... 10. On the strength of the aforementioned Alias Writ of Execution dated June 26, 1969, the Provincial Sheriff of Rizal (respondent herein) served notices of garnishment dated June 28, 1969 with several Banks, specially 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 .... 11. 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,..." 2. The paragraph immediately succeeding in such petition then alleged: "12. 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." 3 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. 4

In the light of the above, it is made abundantly clear why the Republic of the Philippines could rightfully allege a legitimate grievance. WHEREFORE, the writs of certiorari and prohibition are granted, nullifying and setting aside both the order of June 24, 1969 declaring executory the decision of July 3, 1961 as well as the alias writ of execution issued thereunder. The preliminary injunction issued by this Court on July 12, 1969 is hereby made permanent.

SUPREME COURT FIRST DIVISION METROPOLITAN TRANSPORTATION SERVICE (METRAN), Petitioner, -versus- G.R. No. L-1232 January 12, 1948 JOSE MA. PAREDES, VICENTE DE LA CRUZ and ARSENIO C. ROLDAN, Judges of Court of Industrial Relations, and THE NATIONAL LABOR UNION, Respondents. x----------------------------------------------------x DECISION HILADO, J.: Before the Court of Industrial Relations a petition was filed in case No. 36-V entitled National Labor Union, versus Metropolitan Transportation Service (Metran), wherein petitioner alleged that it was a legitimate labor organization, thirty of whose affiliated members were working and under the employ of the respondent; that the respondent is a semi -governmental transportation entity, popularly known as Metran, and after several other allegations concluded with the prayer that its nine demands at length set forth in said petition be granted. In behalf of the so-called respondent an oral petition for dismissal of the case was made before the court on October 22, 1946. on the ground that the respondent belongs to the Republic of the Philippines and as such, it can not be sued (Order of C.I.R. of November 7, 1946, Annex C). By its aforesaid order, the court denied the motion to dismiss, citing in support of such resolution a paragraph allegedly quoted from an opinion of Justice Ozaeta speaking for the Supreme Court in the case of the Manila Hotel, in the words of the order. In behalf of the instant so-called petitioner a motion for reconsideration of that order was filed (Annex D) but it was denied by the Court of Industrial Relations by its resolution dated December 3, 1946 (Annex E). On December 7, 1946, a notice of appeal (Annex F) was filed by counsel, and the case is now submitted on appeal under the provisions of Rule 44. It appears that the Metropolitan Transportation Service (Metran) is not a corporation nor any of the juridical entities enumerated in article 35 of the Civil Code. Rule 3, Section 1 provides: SECTION 1. Who may be parties. Only natural or judicial persons may be parties in a civil action. Action is defined by Rule 2, section 1, as an ordinary suit in a cour t of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong. Considering that the very law of its creation (Commonwealth Act No. 103, as amended), denominates the lower tribunal as a court (section 1), considering the powers and duties conferred and imposed upon it (Chapter II), its incidental powers (Chapter III), the fact that Chapter IV of said Act and Rule 44 of the Rules of Court provide for an appeal from an award, order, or decision of the Court of Industrial Relations to the Supreme Court, unquestionably a court of justice, and the fact that section 20 of said Commonwealth Act No. 103 confers upon the Court of Industrial Relations the power to adopt its rules of procedure and such other powers as generally pertain to a court of justice (italics supplied), and considering finally the importance in the life and economy of the nation of the industrial relations which have thus been placed under the jurisdiction of said Court of Industrial Relations,

in the hearing and determination of which cases thus submitted to it, said court administers justice between parties, we have no hesitation in holding that it is a court of justice within the meaning of Rule 2, Section 1. In the case of Health vs. Steamer San Nicolas (7 Phil., 532), suit was brought H. L. Heath against the Steamer San Nicolas. No natural or juridical person was named as defendant in the complaint, commented this Court. Mr. Justice Willard, speaking for th e Court, stated the important question calling for decision therein as follows: The important question discussed in the briefs in this court, and to be decided, is whether such a proceeding as the one in question, directed against the ship itself, without naming any natural or juridical person as defendant, can be maintained in these Islands. (Page 534 of cited volume.) The Court, in resolving said question, inter alia, declared: The first question to be considered is whether this action was properly bro ught against the ship and whether an action can now be maintained when the only defendant named is neither a natural nor juridical person. Under the law in force prior to 1898 there was no doubt upon this subject. It was absolutely indispensable for the maintenance of a contentious action in the courts of justice to have as defendant some natural or juridical person. A suit against a ship, such as is permitted in the English and the American admiralty courts, was unknown to the Spanish law. It is true that the Spanish Law of Civil Procedure contained certain provisions relating to voluntary jurisdiction in matters of commerce, but none of these provisions had any application to a contentious suit of this character. It being impossible to maintain an action of this character against a ship as the only defendant prior to June, 1901, it follows that it such action can now be maintained it must be by virtue of some provision found in the Code of Civil Procedure and which is the only new law now in force relating to this matter. An examination of the provisions of that code will show that no such action is authorized. It cannot, therefore, be now maintained and the demurrer of Borja should have been sustained on that ground. (Pages 537-538 of cited volume.) Under the foregoing doctrine, it is obvious that the Metropolitan Transportation Service (Metran) could not be sued in the Court of Industrial Relations. A corollary of this is that no award, order or decision could be rendered against it. If so, how could it be said that the Court of Industrial Relations had jurisdiction to take cognizance of the case? Moreover, there is another vital reason why the Court of Industrial Relations lacked jurisdiction to entertain the petition, much less to grant the remedies therein prayed for. It is beyond dispute that the Metropolitan Transportation Service (Metran) is and was at the times covered by the petition in the Court of Industrial Relations an office created by Executive Order No. 59 and operating under the direct supervision and control of the Department of Public Works and Communications. (Petition par. 1, admitted by respondent judges answer, par. 1 and by respondent Unions answer, par. 1.) The said office not being a juridical person, any suit, action or proceeding against it, if it were to produce any effect, would in practice be a suit, action or proceeding against the Government itself, of which the said Metropolitan Transportation Service (Metran) is a mere office or agency. Any award, order or decision granti ng any of the Unions demands, if attempted to be executed, would necessarily operate against the government which is really the entity rendering the services and performing the activities in question through its office or agency called Metropolitan Transportation Service (Metran). The case is different from those of the so-called government-owned corporations, such as the Philippine National Bank. National Development Company, the Manila Hotel, etc., which have been duly incorporated under our corporation law or special characters, as one of whose powers is to sue and be sued in any court (Corporation Law, section 13 [a], and which actually engage in business; while in rendering the services and performing the activities here involved the Government has never engaged in business nor intends to do so. Now, it is a well-settled rule that the Government cannot be sued without its consent (Merritt vs. Government of the Philippine Islands, 34 Phil., 311) and here no consent of the government has been shown. This is not even a case governed by Act No. 3083 which

specifies the instances where this government has given its consent to be sued (Compaia General de Tabacos de Filipinas vs. Government of the Philippine Islands, 45 Phil., 663. And the Manila Hotel case relied upon by the Court of Industrial Relations in its order Annex C, is inapplicable for the reason that the Metropolitan Transportation Service (Metran) is not a corporation, nor any other kind of judicial person for that matter. If the Metropolitan Transportation Service (Metran) could not be sued and the Court of Industrial Relations could not render any decision, judgment, award or order against it, all the proceedings had in said court were null and void. A case very similar to the present was Salgado vs. Ramos (64 Phil., 724, 727), from which we quote the following passage: Consequently, while the claim is actually made against the Director of Lands, it is juridically against the Government of the Philippine Islands of which the Director of Lands is a mere agent, in accordance with the provisions of article 1727 of the Civil Code. On the other hand, the instant proceedings should be considered, as we treat it, as having been instituted by the Government itself, since the Metropolitan Transportation Service (Metran) is a mere office or agency of said government, unincorporated and not possessing juridical personality under the law, incapable of not being sued but suing (Rule 3, section 1). The very allegations, arguments and contentions contained in the petition clearly show that to all intents and purposes said petition was being presented in behalf of the Government as the real party in interest. Rule 3, section 2, provides that every action must be prosecuted in the name of the real party in interest. And giving effect to the spirit of liberality inspiring Rule 1, section 2, and in order to avoid multiplicity of suits, we believe that this is a proper case for applying the principle that the the law considers that as done which ought to have been done. Parenthetically, however, we may say that were we to be more rigorous with petitioner herein in this regard, we will have to be equally rigorous with petitioner in the Court of Industrial Relations on the same score, with the practical result that any way the proceedings before that court will have to be dismissed. It would be sophistical to say that the suit or action against the said office or agency of the government is not a suit or action against the government itself, upon the ground that the prohibition only covers suits against the government as a whole. A commonplace illustration will, we think, demonstrate the fallacy of such a theory: In order that it may be said that a man has been attacked by another, the latter does not need to deliver blows or shower shots all over the body of the victim injuring each and every part thereof, but if the blow or the shot is inflicted upon the arm or any other part of his body, we say that the victim was attacked by the aggressor. The Bureau of Public Works under whose supervision the Metropolitan Transportation Service (Metran) has been organized and functions is an integral part of the government, just as the said office or agency. And apart from the consideration that neither said Bureau nor said office has any juridical personality to be sued for reasons already set forth, any suit or action attempted against either will necessarily be a suit or action against the government itself. Accordingly it is well settled, as a general proposition, that, where a s uit is brought against an officer or agency with relation to some matter in which defendant represents the state in action and liability, and the state, while not a party to the record, is the real party against which relief is sought so that a judgment for plaintiff, although nominally against the named defendant as an individual or entity distinct from the state, will operate to control the action of the state or subject it to liability, the suit is in effect one against the state and cannot be maintained without its consent. Apparently for this rule to apply the relief asked must involved some direct or substantial interest of the state, as a distinct entity, apart from the mere interest a state may have in the welfare of its citizens or the vindication of its laws. Within the inhibition of the rule, however, are suits wherein a state officer or agency is, or will be, required to use state property or funds in order to afford the relief demanded. (59 C. J., 307 309; Italics supplied.) In a republican state, like the Philippines, government immunity from suit without its consent is derived from the will of the people themselves in freely creating a government of the people, by the people, and for the people a representative government through which they have agreed to exercise the powers and discharge the duties of their sovereignty for the common good and

general welfare. In so agreeing, the citizens have solemnly undertaken to surrender some of their private rights and interest which were calculated to conflict with the higher rights and larger interests of the people as a whole, represented by the government thus established by them all. One of those higher rights, based upon those larger interests is that government immunity. The members of the respondent Labor Union themselves are part of the people who have freely formed that government and participated in that solemn undertaking. In this sense and a very real one it is they are in effect attempting to sue themselves along with the rest of the people represented by their common government an anomalous and absurd situation indeed. The case is radically different from a dictatorship, or an aristocratic, oligarchical, autocratic, or monarchical government, where any similar immunity will be the creature of the will of one man or of a powerful few. The principle is further grounded upon the necessity of protecting the performance of governmental and public functions from being harassed unduly or constantly interrupted by private suits. (See also McClellan vs. State, 170, p. 662; 35 Cal. App., 605, 606.) Where the government is of the people, by the people, and for the people, such immunity from suit will only be the reaffirmation of the sovereignty of the people, such immuni ty from suit will only be the reaffirmation of the sovereignty of the people themselves as represented by their government in the face of the obvious impossibility of constituting the entire people into one single body to exercise the powers and enjoy the immunities of that sovereignty. Upon the whole, we are clearly of opinion that the proceedings had in the Court of Industrial Relations and now subject of this appeal are null and void, particularly said courts order of November 1, 1946 (Annex C) and the resolution of December 3, 1946 (Annex E), with the necessary consequence that the said court should be, as it is hereby, enjoined from taking any further action in the case inconsistent with this decision. No costs. So ORDERED. Moran, C.J., Paras, Feria, Pablo, Bengson, Hontiveros, Padilla and Tuason, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-26386 September 30, 1969

Exploration case. The classic formulation of Holmes of this doctrine of nonsuability thus bears restatement: "A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical round that there can be no legal right as against the authority that 5 makes the law on which the right depends." This is not to deny that while indeed logical and far from impractical the doctrine does give rise to problems considering how widely immersed in matters hitherto deemed outside its sphere the government is at present. Nor is it likely considering its expanding role, demanded by the times and warranted by the Constitution, that a halt would be called to many of its activities, at times unavoidably adversely affecting private rights. Nonetheless, a continued adherence to the doctrine of non-suability is not to be deplored for as against the inconvenience that may be caused private parties, the loss of governmental efficiency and the obstacle to the performance of its multifarious functions are far greater if such a fundamental principle were abandoned and the availability of judicial remedy were not thus restricted. With the well known propensity on the part of our people to go 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.1awphl.nt At any rate, in case of a money claim arising from contract, express or implied, which could serve as a basis for civil action between private, parties, such a consent has been given by a statute enacted by the Philippine legislature, even before the Constitution took effect and still applicable at 6 7 present. The procedure provided for in such a statute was made more expeditious by a Commonwealth Act, enabling the party or entity, who feels aggrieved by the final decision of the Auditor General required to decide the claim within sixty days, having the right to go to this Court for final 8 adjudication. It is worthy of note likewise that in the pursuit of its activities affecting business, the government has increasingly relied on private 9 corporations possessing the power to sue and be sued. Thus the doctrine of non-suability of the government without its consent, as it has operated in practice, hardly lends itself to the charge that it could be the fruitful parent of injustice, considering the vast and everwidening scope of state activities at present being undertaken. Whatever difficulties for private claimants may still exist, is, from an objective appraisal of all factors, minimal. In the balancing of interests, so unavoidable in the determination of what.principles must prevail if government is to satisfy the public weal, the verdict must be, as it has been these so many years, for its continuing recognition as a fundamental postulate of constitutional law. WHEREFORE, the order of dismissal of the lower court of May 23, 1966 is affirmed. With costs against plaintiff-appellant.

PROVIDENCE WASHINGTON INSURANCE CO., plaintiff-appellant, vs. REPUBLIC OF THE PHILIPPINES and BUREAU OF CUSTOMS, defendants-appellees. Quasha, Asperilla, Blanco, Zafra and Tayag for plaintiff-appellant. Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Antonio G. Ibarra, Trial Attorney Herminio Z. Florendo and Felipe T. Cuison for defendants-appellees.

FERNANDO, J.: Providence Washington Insurance Co. filed, on October 21, 1966, its brief as appellant against an order of the lower court dismissing its suit for the non-delivery of thirty cases of steel files, which cargo was insured by it against loss and damage, naming as defendants the Republic of the Philippines and the Bureau of Customs as the operator of the arrastre service, thus rendering unavoidable the invocation of the well-settled doctrine of non-suability of the government. Less than two months later, on December 17, 1966, our decision in Mobil Philippines Exploration, Inc. v. Customs 1 Arrastre Service was promulgated. We there explicitly held: "The Bureau of Customs, acting as part of the machinery of the national government in the operation of the arrastre service, pursuant to express legislative mandate and as a necessary incident of its prime governmental function, is immune from suit, there being no statute to the contrary." As of this date, thirty-six subsequent cases, certainly a figure far from unimpressive, have been similarly decided expressly reaffirming the above 2 ruling of governmental immunity from suit without its consent. The futility of this appeal is quite apparent. We affirm the lower court order of dismissal. The doctrine of non-suability thus holds undisputed sway. Its primacy appears to be undeniable. For a suit of this character to prosper, there must be a showing of consent either in express terms or by implication through the use of statutory language too plain to be misinterpreted. Its absence being obvious, the lower court acted correctly. Nor did the Mobil decision blaze a new trail. So it has been from the time the Constitution took effect in 1935. Bull v. Yatco, a 1939 decision 3 during the Commonwealth, spoke to that effect. Adherence to such a view is reflected in the various cases decided after independence before the Mobil

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

to the doctrine of non-suability is not to be deplored for as against the inconvenience that may be caused private parties, the loss of governmental efficiency and the obstacle to the performance of its multifarious functions are far greater if such a fundamental principle were abandoned and the availability of judicial remedy were not thus restricted. With the well-known propensity on the part of our people to go the court, at the least provocation, the loss of time and energy required to defend against law suits, in the absence of such a basic principle that constitutes such an effective obstacle, could very well be imagined." 7 It only remains to be added that under the present Constitution which, as noted, expressly reaffirmed such a doctrine, the following decisions had been rendered: Del mar v. The Philippine veterans Administration; 8 Republic v. Villasor; 9Sayson v. Singson; 10 and Director of the Bureau of Printing v. Francisco.11 2. Equally so, the next paragraph in the above opinion from the Switzerland General Insurance Company decision is likewise relevant: "Nor is injustice thereby cause private parties. They could still proceed to seek collection of their money claims by pursuing the statutory remedy of having the Auditor General pass upon them subject to appeal to judicial tribunals for final adjudication. We could thus correctly conclude as we did in the cited Provindence Washington Insurance decision: "Thus the doctrine of non-suability of the government without its consent, as it has operated in practice, hardly lends itself to the charge that it could be the fruitful parent of injustice, considering the vast and ever-widening scope of state activities at present being undertaken. Whatever difficulties for private claimants may still exist, is, from an objective appraisal of all factors, minimal. In the balancing of interests, so unavoidable in the determination of what principles must prevail if government is to satisfy the public weal, the verdict must be, as it has been these so many years, for its continuing recognition as a fundamental postulate of constitutional law." 12 3. Apparently respondent Judge was misled by the terms of the contract between the private respondent, plaintiff in his sala, and defendant Rice and Corn Administration which, according to him, anticipated the case of a breach of contract within the parties and the suits that may thereafter arise. 13 The consent, to be effective though, must come from the State acting through a duly enacted statute as pointed out by Justice Bengzon in Mobil. Thus, whatever counsel for defendant Rice and Corn Administration agreed to had no binding force on the government. That was clearly beyond the scope of his authority. At any rate, Justice Sanchez, in Ramos v. Court of Industrial Relations, 14 was quite categorical as to its "not [being] possessed of a separate and distinct corporate existence. On the contrary, by the law of its creation, it is an office directly 'under the Office of the President of the Philippines." 15 WHEREFORE, the petitioner for certiorari is granted and the resolution of October 4, 1972 denying the motion to dismiss filed by the Rice and Corn Administration nullified and set aside and the petitioner for prohibition is likewise granted restraining respondent Judge from acting on civil Case No. 79082 pending in his sala except for the purpose of ordering its dismissal for lack of jurisdiction. The temporary restraining order issued on February 8, 1973 by this Court is made permanent terminating this case. Costs against Yellow Ball Freight Lines, Inc.

FERNANDO, Acting C.J.: The jurisdictional issued raised by Solicitor General Estelito P. Mendoza on behalf of the Republic of the Philippines in this certiorari and prohibition proceeding arose from the failure of respondent Judge Amante P. Purisima of the Court of First Instance of Manila to apply the well-known and of-reiterated doctrine of the non-suability of a State, including its offices and agencies, from suit without its consent. it was so alleged in a motion to dismiss filed by defendant Rice and Corn Administration in a pending civil suit in the sala of respondent Judge for the collection of a money claim arising from an alleged breach of contract, the plaintiff being private respondent 1 Yellow Ball Freight Lines, Inc. Such a motion to dismiss was filed on September 7, 1972. At that time, the leading case of Mobil Philippines Exploration, Inc. v. Customs 2 Arrastre Service, were Justice Bengzon stressed the lack of jurisdiction of a court to pass on the merits of a claim against any office or entity acting as part of the machinery of the national government unless consent be shown, had been applied in 3 53 other decisions. There is thus more than sufficient basis for an allegation of jurisdiction infirmity against the order of respondent Judge denying the motion to 4 dismiss dated October 4, 1972. What is more, the position of the Republic has been fortified with the explicit affirmation found in this provision of the present Constitution: 5 "The State may not be sued without its consent." The merit of the petition for certiorari and prohibition is thus obvious. 1. There is pertinence to this excerpt from Switzerland General Insurance Co., Ltd. v. 6 Republic of the Philippines: "The doctrine of non-suability recognized in this jurisdiction even prior to the effectivity of the [1935] Constitution is a logical corollary of the positivist concept of law which, to para-phrase Holmes, negates the assertion of any legal right as against the state, in itself the source of the law on which such a right may be predicated. Nor is this all.lwphl@itEven if such a principle does give rise to problems, considering the vastly expanded role of government enabling it to engage in business pursuits to promote the general welfare, it is not obeisance to the analytical school of thought alone that calls for its continued applicability. Why it must continue to be so, even if the matter be viewed sociologically, was set forth in
Providence Washington Insurance Co. v. Republic thus: "Nonetheless, a continued adherence

GRINO-AQUINO, J.: [G.R. No. 91359, September 25, 1992] VETERANS MANPOWER AND PROTECTIVE SERVICES, INC., PETITIONER, VS. THE COURT OF APPEALS, THE CHIEF OF PHILIPPINE CONSTABULARY AND PHILIPPINE CONSTABULARY SUPERVISORY UNIT FOR SECURITY AND INVESTIGATION AGENCIES (PC-SUSIA), RESPONDENTS. DECISION

ProtectiveAgencyOperators,Inc. and subject to the provision of existing laws, is hereby authorized to issue the rules and regulations necessary to carry out the purpose of this Act. VMPSI alleges that the above provisions of R.A. No. 5487 violate the provisions of the 1987 Constitution against monopolies, unfair competition and combinations in restraint of trade, and tend to favor and institutionalize the Philippine Association of Detective and Protective Agency Operators, Inc. (PADPAO) which is monopolistic because it has an interest in more than one security agency. Respondent VMPSI likewise questions the validity of paragraph 3, subparagraph (g) of the Modifying Regulations on the Issuance of License to Operate and Private Security Licenses and Specifying Regulations for the Operation of PADPAO issued by then PC Chief Lt. Gen. Fidel V. Ramos, through Col. Sabas V. Edades, requiring that all private security agencies/company security forces must register as members of any PADPAO Chapter organized within the Region where their main offices are located... ((pp. 5-6, Complaint in Civil Case No. 88-471). As such membership requirement in PADPAO is compulsory in nature, it allegedly violates legal and constitutional provisions against monopolies, unfair competition and combinations in restraint of trade. On May 12, 1986, a Memorandum of Agreement was executed by PADPAO and the PC Chief, which fixed the minimum monthly contract rate per guard for eight (8) hours of security service per day at P2,255.00 within Metro Manila and P2,215.00 outside of Metro Manila (Annex B, Petition). On June 29, 1987, Odin Security Agency (Odin) filed a complaint with PADPAO accusing VMPSI of cut-throat competition by undercutting its contract rate for security services rendered to the Metropolitan Waterworks and Sewerage System (MWSS), charging said customer lower than the standard minimum rates provided in the Memorandum of Agreement dated May 12, 1986. PADPAO found VMPSI guilty of cut-throat competition, hence, the PADPAO Committee on Discipline recommended the expulsion of VMPSI from PADPAO and the cancellation of its license to operate a security agency (Annex D, Petition). The PC-SUSIA made similar findings and likewise recommended the cancellation of VMPSIs license (Annex E, Petition). As a result, PADPAO refused to issue a clearance/certificate of membership to VMPSI when it requested one. VMPSI wrote the PC Chief on March 10, 1988, requesting him to set aside or disregard the findings of PADPAO and consider VMPSIs application for renewal of its license, even without a certificate of membership from PADPAO (Annex F, Petition). As the PC Chief did not reply, and VMPSIs license was expiring on March 31, 1988, VMPSI filed Civil Case No. 88-471 in the RTC-Makati, Branch 135, on March 28, 1988 against the PC Chief and PC-SUSIA. On the same date, the court issued a restraining order enjoining the PC Chief and PC-SUSIA from committing acts that would result in the cancellation or non -renewal of VMPSIs license (Annex G, Petition). The PC chief and PC-SUSIA filed a Motion to Dismiss, Opposition to the Issuance of Writ of Preliminary Injunction, and Motion to Quash the Temporary Restraining Order, on the grounds that the case is against the State which had not given consent thereto and that VMPSIs license already expired on March 31, 1988, hence, the restraining order or preliminary injunction would not serve any purpose because there was no more license to be cancelled (Annex H, Petition). Respondent VMPSI opposed the motion. On April 18, 1988, the lower court denied VMPSIs application for a writ of preliminary injunction for being premature because it has up to May 31, 1988 within which to file its application for renewal pursuant to Section 2 (e) of Presidential Decree No. 199, x xx. (p. 140, Rollo.)

This is a petition for review on certiorari of the decision dated August 11, 1989, of the Court of Appeals in CA-G.R. SP No. 15990, entitled The Chief of Philippine Constabulary (PC) and Philippine Constabulary Supervisory Unit for Security and Investigation Agencies (PC-SUSIA) vs. Hon. Omar U. Amin and Veterans Manpower and Protective Services, Inc. (VMPSI), lifting the writ of preliminary injunction which the Regional Trial Court had issued to the PC and PCSUSIA enjoining them from committing acts that would result in the cancellation or non-renewal of the license of VMPSI to operate as a security agency. On March 28, 1988, VMPSI filed a complaint in the Regional Trial Court at Makati, Metro Manila, praying the court to: A. Forthwith issue a temporary restraining order to preserve the status quo, enjoining the defendants, or any one acting in their place or stead, to refrain from committing acts that would result in the cancellation or non-renewal of VMPSIs license; B. In due time, issue a writ of preliminary injunction to the same effect; C. Render decision and judgment declaring null and void the amendment of Section 4 of R.A. No. 5487, by PD No. 11 exempting organizations like PADPAO from the prohibition that no person shall organize or have an interest in more than one agency; declaring PADPAO as an illegal organization existing in violation of said prohibition, without the illegal exemption provided in PD No. 11; declaring null and void Section 17 of R.A. No. 5487 which provides for the issuance of rules and regulations in consultation with PADPAO; declaring null and void the February 1, 1982 directive of Col. Sabas V. Edadas, in the name of the then PC Chief, requiring all private security agencies/security forces such as VMPSI to join PADPAO as a pre-requisite to secure/renew their licenses; declaring that VMPSI did not engage in cut -throat competition in its contract with MWSS; ordering defendants PC Chief and PC-SUSIA to renew the license of VMPSI; ordering the defendants to refrain from further harassing VMPSI and from threatening VMPSI with cancellations or non-renewal of license, without legal and justifiable cause; ordering the defendants to pay to VMPSI the sum of P1,000,000.00 as actual and compensatory damages, P1,000,000.00 as exemplary damages, and P200,000.00 as attorneys fees and expenses of litigation; and granting such further or other reliefs to VMPSI as may be deemed lawful, equitable and just. (pp. 55-56, Rollo.) The constitutionality of the following provisions of R.A. 5487(otherwise known as the Private Security Agency Law), as amended, is questioned by VMPSI in its complaint: SEC. 4.WhomayOrganizeaSecurityorWatchmanAgency. - Any Filipino citizen or a corporation, partnership, or association, with a minimum capital of five thousand pesos, one hundred per cent of which is owned and controlled by Filipino citizens may organize a security or watchman agency: Provided,Thatnopersonshallorganizeorhaveaninterestin,morethanonesuchagencyexceptthosewh icharealreadyexistingatthepromulgationofthisDecree: x xx. (As amended by P.D. Nos. 11 and 100.) SEC. 17.RulesandRegulationsbyChief,PhilippineConstabulary.TheChiefofthePhilippineConstabulary,inconsultationwiththePhilippineAssociationofDetectiveand

On May 23, 1988, VMPSI reiterated its application for the issuance of a writ of preliminary injunction because PC-SUSIA had rejected payment of the penalty for its failure to submit its application for renewal of its license and the requirements therefor within the prescribed period in Section 2(e) of the Revised Rules and Regulations Implementing R.A. 5487, as amended by P.D. 1919 (Annex M, Petition). On June 10, 1988, the RTC-Makati issued a writ of preliminary injunction upon a bond of P100,000.00, restraining the defendants, or any one acting in their behalf, from cancelling or denying renewal of VMPSIs license, until further orders from the court. The PC Chief and PC-SUSIA filed a Motion for Reconsideration of the above order, but it was denied by the court in its Order of August 10, 1988 (Annex R, Petition). On November 3, 1988, the PC Chief and PC-SUSIA sought relief by a petition for certiorari in the Court of Appeals. On August 11, 1989, the Court of Appeals granted the petition. The dispositive portion of its decision reads: WHEREFORE, the petition for certiorari filed by petitioners PC Chief and PC-SUSIA is hereby GRANTED, and the RTC-Makati, Branch 135, is ordered to dismiss the complaint filed by respondent VMPSI in Civil Case No. 88-471, insofar as petitioners PC Chief and PC-SUSIA are concerned, for lack of jurisdiction. The writ of preliminary injunction issued on June 10, 1988, is dissolved. (pp. 295-296, Rollo.) VMPSI came to us with this petition for review. The primary issue in this case is whether or not VMPSIs complaint against the PC Chief and PC-SUSIA is a suit against the State without its consent. The answer is yes. The State may not be sued without its consent (Article XVI, Section 3, of the 1987 Constitution). Invoking this rule, the PC Chief and PC-SUSIA contend that, being instrumentalities of the national government exercising a primarily governmental function of regulating the organization and operation of private detective, watchmen, or security guard agencies, said official (the PC Chief) and agency (PC-SUSIA) may not be sued without the Governments consent, especially in this case because VMPSIs complaint seeks not only to compel the public respondents to act in a certain way, but worse, because VMPSI seeks actual and compensatory damages in the sum of P1,000,000.00, exemplary damages in the same amount, and P200,000.00 as attorneys fees from said public respondents. Even if its action prospers, the payment of its monetary claims may not be enforced because the State did not consent to appropriate the necessary funds for that purpose. Thus did we hold in Shaufvs.CourtofAppeals, 191 SCRA 713: While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the suit must be regarded as against the state itself althoughithasnotbeenformallyimpleaded. (Emphasis supplied.) A public official may sometimes be held liable in his personal or private capacity if he acts in bad faith, or beyond the scope of his authority or jurisdiction (Shauf vs. Court of Appeals, supra), however, since the acts for which the PC Chief and PC-SUSIA are being called to account in this case, were performed by them as part of their official duties, without malice, gross negligence, or bad faith, no recovery may be had against them in their private capacities. We agree with the observation of the Court of Appeals that the Memorandum of Agreement dated May 12, 1986 does not constitute an implied consent by the State to be sued:

TheMemorandumofAgreementdatedMay12,1986wasenteredintobythePCChiefinrelationtotheex erciseofafunctionsovereigninnature. ThecorrecttestfortheapplicationofstateimmunityisnottheconclusionofacontractbytheStatebutthele galnatureoftheact.ThiswasclearlyenunciatedinthecaseofUnitedStatesofAmericavs.Ruizwherethe Hon.SupremeCourtheld: 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 a businesscontract.Itdoesnotapplywherethecontractrelatestotheexerciseofitssovereignfunctions . (136 SCRA 487, 492.) Intheinstantcase,theMemorandumofAgreemententeredintobythePCChiefandPADPAOwasintend edtoprofessionalizetheindustryandtostandardizethesalariesofsecurityguardsaswellasthecurrentra tesofsecurityservices,clearly,agovernmentalfunction.Theexecutionofthesaidagreementisincidenta ltothepurposeofR.A.5487,asamended,whichistoregulatetheorganizationandoperationofprivatedet ective,watchmenorsecurityguardagencies. (Underscoring Ours.)(pp. 258-259, Rollo.) Waiver of the States immunity from suit, being a derogation of sovereignty, will not be lightly inferred, but must be construed strictissimijuris (Republic vs. Feliciano, 148 SCRA 424). The consent of the State to be sued must emanate from statutory authority, hence, from a legislative act, not from a mere memorandum. Without such consent, the trial court did not acquire jurisdiction over the public respondents. The state immunity doctrine rests upon reasons of public policy and the inconvenience and danger which would flow from a different rule. It is obvious that public service would be hindered, and public safety endangered, if the supreme authority could be subjected to suits at the instance of every citizen, and, consequently, controlled in the use and disposition of the means required for the proper administration of the government (Siren vs. U.S. Wall, 152, 19 L. ed. 129, as cited in 78 SCRA 477). In the same vein, this Court in Republic vs. Purisima (78 SCRA 470, 473) rationalized: Nonetheless, a continued adherence to the doctrine of non-suability is not to be deplored for as against the inconvenience that may be caused [by] 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. (citing Providence Washington Insurance Co. vs. Republic, 29 SCRA 598.) WHEREFORE, the petition for review is DENIED and the judgment appealed from is AFFIRMED intoto. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-23139 December 17, 1966

Dismiss, pp. 13-15, Record an Appeal). It follows that the defendants herein cannot he sued under the first two abovementioned categories of natural or juridical persons. Nonetheless it is urged that by authorizing the Bureau of Customs to engage in arrastre service, the law thereby impliedly authorizes it to be sued as arrastre operator, for the reason that the nature of this function (arrastre service) is proprietary, not governmental. Thus, insofar as arrastre operation is concerned, appellant would put defendants under the third category of "entities authorized by law" to be sued. Stated differently, it is argued that while there is no law expressly authorizing the Bureau of Customs to sue or be sued, still its capacity to be sued is implied from its very power to render arrastre service at the Port of Manila, which it is alleged, amounts to the transaction of a private business. The statutory provision on arrastre service is found in Section 1213 of Republic Act 1937 (Tariff and Customs Code, effective June 1, 1957), and it states: SEC. 1213.Receiving, Handling, Custody and Delivery of Articles .The Bureau of Customs shall have exclusive supervision and control over the receiving, handling, custody and delivery of articles on the wharves and piers at all ports of entry and in the exercise of its functions it is hereby authorized to acquire, take over, operate and superintend such plants and facilities as may be necessary for the receiving, handling, custody and delivery of articles, and the convenience and comfort of passengers and the handling of baggage; as well as to acquire fire protection equipment for use in the piers: Provided, That whenever in his judgment the receiving, handling, custody and delivery of articles can be carried on by private parties with greater efficiency, the Commissioner may, after public bidding and subject to the approval of the department head, contract with any private party for the service of receiving, handling, custody and delivery of articles, and in such event, the contract may include the sale or lease of governmentowned equipment and facilities used in such service. In Associated Workers Union, et al. vs. Bureau of Customs, et al., L-21397, resolution of August 6, 1963, this Court indeed held "that the foregoing statutory provisions authorizing the grant by contract to any private party of the right to render said arrastre services necessarily imply that the same is deemed by Congress to be proprietary or non-governmental function." The issue in said case, however, was whether laborers engaged in arrastre service fall under the concept of employees in the Government employed in governmental functions for purposes of the prohibition in Section 11, Republic Act 875 to the effect that "employees in the Government . . . shall not strike," but "may belong to any labor organization which does not impose the obligation to strike or to join in strike," which prohibition "shall apply only to employees employed in governmental functions of the Government . . . . Thus, the ruling therein was that the Court of Industrial Relations had jurisdiction over the subject matter of the case, but not that the Bureau of Customs can be sued. Said issue of suability was not resolved, the resolution stating only that "the issue on the personality or lack of personality of the Bureau of Customs to be sued does not affect the jurisdiction of the lower court over the subject matter of the case, aside from the fact that amendment may be made in the pleadings by the inclusion as respondents of the public officers deemed responsible, for the unfair labor practice acts charged by petitioning Unions".

MOBIL PHILIPPINES EXPLORATION, INC., plaintiff-appellant, vs. CUSTOMS ARRASTRE SERVICE and BUREAU of CUSTOMS, defendantsappellees. Alejandro Basin, Jr. and Associates for plaintiff-appellant. Felipe T. Cuison for defendants-appellees. BENGZON, J.P., J.: Four cases of rotary drill parts were shipped from abroad on S.S. "Leoville" sometime in November of 1962, consigned to Mobil Philippines Exploration, Inc., Manila. The shipment arrived at the Port of Manila on April 10, 1963, and was discharged to the custody of the Customs Arrastre Service, the unit of the Bureau of Customs then handling arrastre operations therein. The Customs Arrastre Service later delivered to the broker of the consignee three cases only of the shipment. On April 4, 1964 Mobil Philippines Exploration, Inc., filed suit in the Court of First Instance of Manila against the Customs Arrastre Service and the Bureau of Customs to recover the value of the undelivered case in the amount of P18,493.37 plus other damages. On April 20, 1964 the defendants filed a motion to dismiss the complaint on the ground that not being persons under the law, defendants cannot be sued. After plaintiff opposed the motion, the court, on April 25, 1964, dismissed the complaint on the ground that neither the Customs Arrastre Service nor the Bureau of Customs is suable. Plaintiff appealed to Us from the order of dismissal. Raised, therefore, in this appeal is the purely legal question of the defendants' suability under the facts stated. Appellant contends that not all government entities are immune from suit; that defendant Bureau of Customs as operator of the arrastre service at the Port of Manila, is discharging proprietary functions and as such, can be sued by private individuals. The Rules of Court, in Section 1, Rule 3, provide: SECTION 1.Who may be parties.Only natural or juridical persons or entities authorized by law may be parties in a civil action. Accordingly, a defendant in a civil suit must be (1) a natural person; (2) a juridical person or (3) an entity authorized by law to be sued. Neither the Bureau of Customs nor (a fortiori) its function unit, the Customs Arrastre Service, is a person. They are merely parts of the machinery of Government. The Bureau of Customs is a bureau under the Department of Finance (Sec. 81, Revised Administrative Code); and as stated, the Customs Arrastre Service is a unit of the Bureau of Custom, set up under Customs Administrative Order No. 8-62 of November 9, 1962 (Annex "A" to Motion to

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. This is the doctrine recognized in Bureau of Printing, et al. vs. Bureau of Printing Employees Association, et al., L-15751, January 28, 1961: The Bureau of Printing is an office of the Government created by the Administrative Code of 1916 (Act No. 2657). As such instrumentality of the Government, it operates under the direct supervision of the Executive Secretary, Office of the President, and is "charged with the execution of all printing and binding, including work incidental to those processes, required by the National Government and such other work of the same character as said Bureau may, by law or by order of the (Secretary of Finance) Executive Secretary, be authorized to undertake . . . ." (Sec. 1644, Rev. Adm. Code.) It has no corporate existence, and its appropriations are provided for in the General Appropriations Act. Designed to meet the printing needs of the Government, it is primarily a service bureau and, obviously, not engaged in business or occupation for pecuniary profit. xxx xxx xxx

premises to enable said customs officers to make it, that is, it requires arrastre 1 operations. Clearly, therefore, 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. For otherwise, it could not perform its governmental function without necessarily exposing itself to suit. Sovereign immunity, granted as to the end, should not be denied as to the necessary means to that end. And herein lies the distinction between the present case and that of National Airports Corporation vs. Teodoro, 91 Phil. 203, on which appellant would rely. For there, the Civil Aeronautics Administration was found have for its prime reason for existence not a governmental but a proprietary function, so that to it the latter was not a mere incidental function: Among the general powers of the Civil Aeronautics Administration are, under Section 3, to execute contracts of any kind, to purchase property, and to grant concessions rights, and under Section 4, to charge landing fees, royalties on sales to aircraft of aviation gasoline, accessories and supplies, and rentals for the use of any property under its management. These provisions confer upon the Civil Aeronautics Administration, in our opinion, the power to sue and be sued. The power to sue and be sued is implied from the power to transact private business. . . . xxx xxx xxx

. . . 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 emoloyed in its general governmental functions. xxx xxx xxx

Indeed, as an office of the Government, without any corporate or juridical personality, the Bureau of Printing cannot be sued (Sec. 1, Rule 3, Rules of Court.) Any suit, action or proceeding against it, if it were to produce any effect, would actually be a suit, action or proceeding against the Government itself, and the rule is settled that the Government cannot be sued without its consent, much less over its objection. (See Metran vs. Paredes, 45 Off. Gaz. 2835; Angat River Irrigation System, et al. vs. Angat River Workers Union, et al., G.R. Nos. L-10943-44, December 28, 1957.) The situation here is not materially different. The Bureau of Customs, to repeat, is part of the Department of Finance (Sec. 81, Rev. Adm. Code), with no personality of its own apart from that of the national government. Its primary function is governmental, that of assessing and collecting lawful revenues from imported articles and all other tariff and customs duties, fees, charges, fines and penalties (Sec. 602, R.A. 1937). To this function, arrastre service is a necessary incident. For practical reasons said revenues and customs duties can not be assessed and collected by simply receiving the importer's or ship agent's or consignee's declaration of merchandise being imported and imposing the duty provided in the Tariff law. Customs authorities and officers must see to it that the declaration tallies with the merchandise actually landed. And this checking up requires that the landed merchandise be hauled from the ship's side to a suitable place in the customs

The Civil Aeronautics Administration comes under the category of a private entity. Although not a body corporate it was created, like the National Airports Corporation, not to maintain a necessary function of government, but to run what is essentially a business, even if revenues be not its prime objective but rather the promotion of travel and the convenience of the travelling public. . . . Regardless of the merits of the claim against it, the State, for obvious reasons of public policy, cannot be sued without its consent. Plaintiff should have filed its present claim to the General Auditing Office, it being for money under the provisions of Commonwealth Act 327, which state the conditions under which money claims against the Government may be filed. It must be remembered that statutory provisions waiving State immunity from suit are strictly construed and that waiver of immunity, being in derogation of sovereignty, will not be lightly inferred. (49 Am. Jur., States, Territories and Dependencies, Sec. 96, p. 314; Petty vs. Tennessee-Missouri Bridge Com., 359 U.S. 275, 3 L. Ed. 804, 79 S. Ct. 785). From the provision authorizing the Bureau of Customs to lease arrastre operations to private parties, We see no authority to sue the said Bureau in the instances where it undertakes to conduct said operation itself. The Bureau of Customs, acting as part of the machinery of the national government in the operation of the arrastre service, pursuant to express legislative mandate and as a necessary incident of its prime governmental function, is immune from suit, there being no statute to the contrary. WHEREFORE, the order of dismissal appealed from is hereby affirmed, with costs against appellant. So ordered.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

On January 31, 1992, the impounded vehicles were forcibly taken by Gabon and Abuganda from the custody of the DENR, prompting DENR Officer Calub this time to file a criminal complaint for grave coercion against Gabon and Abuganda. The 7 complaint was, however, dismissed by the Public Prosecutor. On February 11, 1992, one of the two vehicles, with plate number FCN 143, was again apprehended by a composite team of DENR-CENR in Catbalogan and Philippine Army elements of the 802nd Infantry Brigade at Barangay Buray, Paranas, Samar. It was again loaded with forest products with an equivalent volume of 1,005.47 board feet, valued at P10,054.70. Calub duly filed a criminal complaint against ConstancioAbuganda, a certain Abegonia, and several John Does, in Criminal Case No. 3625, for violation of Section 68 [78], Presidential Decree 705 as 8 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. But note the trial court ordered that a copy of the decision be furnished the Secretary of Justice, in order that the necessary criminal action may be filed against NoePagarao and all other persons responsible for violation of the Revised Forestry Code. For it appeared that it was Pagarao who 9 chartered the subject vehicle and ordered that cut timber be loaded on it. Subsequently, herein private respondents Manuela Babalcon, the vehicle owner, and ConstancioAbuganda, 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 10 replevin and issued the corresponding writ in an Order dated April 24, 1992. 11 Petitioners filed a motion to dismiss which was denied by the trial court. Thus, on June 15, 1992, petitioners filed with the Supreme Court the present Petition for Certiorari, Prohibition and Mandamus with application for Preliminary Injunction and/or a Temporary Restraining Order. The Court issued a TRO, enjoining respondent RTC judge from conducting further proceedings in the civil case for replevin; and enjoining private respondents from taking or attempting to take the motor vehicles and forest products seized from the custody of the petitioners. The Court further instructed the petitioners to see to it that the motor vehicles and other forest products seized are kept in a secured place and protected from deterioration, said property being in custodialegis and subject to the direct order of the Supreme 12 Court. In a Resolution issued on September 28, 1992, the Court referred said 13 petition to respondent appellate court for appropriate disposition. On May 27, 1994, the Court of Appeals denied said petition for lack of merit. It ruled that the mere seizure of a motor vehicle pursuant to the authority granted by Section 68 [78] of P.D. No. 705 as amended by E.O. No. 277 does not automatically place said conveyance in custodia legis. According to the appellate court, such authority of the Department Head of the DENR or his duly authorized representative to order the confiscation and disposition of illegally obtained forest products and the conveyance used for that purpose is not absolute and unqualified. It is subject to pertinent laws, regulations, or policies on that matter, added the appellate court. The DENR Administrative Order No. 59, series of 1990, is one such regulation, the appellate court said. For it prescribes the guidelines in the confiscation, forfeiture and disposition of conveyances used in the commission of offenses penalized under 14 Section 68 [78] of P.D. No. 705 as amended by E.O. No. 277.

G.R. No. 115634 April 27, 2000 FELIPE CALUB and RICARDO VALENCIA, DEPARTMENT of ENVIRONMENT and NATURAL RESOURCES (DENR), CATBALOGAN, SAMAR, petitioners, vs. COURT OF APPEALS, MANUELA T. BABALCON, and CONSTANCIO ABUGANDA, respondents.

QUISUMBING, J.: For review is the decision dated May 27, 1994, of the Court of Appeals in CA-G.R. SP No. 29191, denying the petition filed by herein petitioners for certiorari, prohibition and mandamus, in order to annul the Order dated May 27, 1992, by the Regional Trial Court of Catbalogan, Samar. Said Order had denied petitioners' (a) Motion to Dismiss the replevin case filed by herein private respondents, as well as (b) petitioners Motion for Reconsideration of the Order of said trial court dated April 24, 2 1992, granting an application for a Writ of replevin. The pertinent facts of the case, borne by the records, are as follows: On January 28, 1992, the Forest Protection and Law Enforcement Team of the Community Environment and Natural Resources Office (CENRO) of the DENR apprehended two (2) motor vehicles, described as follows: 1. Motor Vehicle with Plate No. HAK-733 loaded with one thousand and twenty six (1,026) board feet of illegally sourced lumber valued at P8,544.75, being driven by one Pio Gabon and owned by [a certain] Jose Vargas. 2. Motor Vehicle with Plate No. FCN-143 loaded with one thousand two hundred twenty four and ninety seven (1,224.97) board feet of illegally-sourced lumber valued at P9,187.27, being driven by one ConstancioAbuganda and owned by [a certain] Manuela Babalcon. 3 ... ConstancioAbuganda and Pio Gabon, the drivers of the vehicles, failed to present proper documents and/or licenses. Thus, the apprehending team seized and impounded the vehicles and its load of lumber at the DENR-PENR (Department of Environment and Natural Resources-Provincial Environment and Natural Resources) 4 Office in Catbalogan. Seizure receipts were issued but the drivers refused to accept 5 the receipts. Felipe Calub, Provincial Environment and Natural Resources Officer, then filed before the Provincial Prosecutor's Office in Samar, a criminal complaint against Abuganda, in Criminal Case No. 3795, for violation of Section 68 [78], Presidential Decree 705 as amended by Executive Order 277, otherwise known as 6 the Revised Forestry Code.
1

Additionally, respondent Court of Appeals noted that the petitioners failed to observe the procedure outlined in DENR Administrative Order No. 59, series of 1990. They were unable to submit a report of the seizure to the DENR Secretary, to give a written notice to the owner of the vehicle, and to render a report of their findings and recommendations to the Secretary. Moreover, petitioners' failure to comply with the procedure laid down by DENR Administrative Order No. 59, series of 1990, was confirmed by the admission of petitioners' counsel that no confiscation order has been issued prior to the seizure of the vehicle and the filing of the replevin suit. Therefore, in failing to follow such procedure, according to the appellate court, the subject 15 vehicles could not be considered in custodia legis. Respondent Court of Appeals also found no merit in petitioners' claim that private respondents' complaint for replevin is a suit against the State. Accordingly, petitioners could not shield themselves under the principle of state immunity as the property sought to be recovered in the instant suit had not yet been lawfully adjudged forfeited in favor of the government. Moreover, according to respondent appellate court, there could be no pecuniary liability nor loss of property that could ensue against the government. It reasoned that a suit against a public officer who acted illegally or beyond the scope of his authority could not be considered a suit against the State; and that a public officer might be sued for illegally seizing or withholding the 16 possession of the property of another. Respondent court brushed aside other grounds raised by petitioners based on the claim that the subject vehicles were validly seized and held in custody because they 17 18 were contradicted by its own findings. Their petition was found without merit. Now, before us, the petitioners assign the following errors:
19

Sec. 78.Cutting, Gathering, and/or Collecting Timber, or Other Forest Products without License. Any person who shall cut, gather, collect, remove timber or other forest products from any forestland, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code. . . The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found. This provision makes mere possession of timber or other forest products without the accompanying legal documents unlawful and punishable with the penalties imposed for the crime of theft, as prescribed in Articles 309-310 of the Revised Penal Code. In the present case, the subject vehicles were loaded with forest products at the time of the seizure. But admittedly no permit evidencing authority to possess and transport said load of forest products was duly presented. These products, in turn, were deemed illegally sourced. Thus there was a prima facie violation of Section 68 [78] of the Revised Forestry Code, although as found by the trial court, the persons responsible for said violation were not the ones charged by the public prosecutor. The corresponding authority of the DENR to seize all conveyances used in the commission of an offense in violation of Section 78 of the Revised Forestry Code is pursuant to Sections 78-A and 89 of the same Code. They read as follows: Sec. 78-A. Administrative Authority of the Department Head or His Duly Authorized Representative to Order Confiscation . In all cases of violation of this Code or other forest laws, rules and regulations, the Department Head or his duly authorized representative, may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned, and all conveyances used either by land, water or air in the commission of the offense and to dispose of the same in accordance with pertinent laws, regulations or policies on the matter. Sec. 89.Arrest; Institution of criminal actions. A forest officer or employee of the Bureau [Department] or any personnel of the Philippine Constabulary/Philippine National Police shall arrest even without warrant any person who has committed or is committing in his presence any of the offenses defined in this Chapter. He shall also seize and confiscate, in favor of the Government, the tools and equipment used in committing the offense. . . [Emphasis supplied.] Note that DENR Administrative Order No. 59, series of 1990, implements Sections 78-A and 89 of the Forestry Code, as follows: Sec. 2.Conveyances Subject to Confiscation and Forfeiture. All conveyances used in the transport of any forest product obtained or gathered illegally whether or not covered with transport documents, found spurious or irregular in accordance with Sec. 68-A [78-A] of

(1) THE COURT OF APPEALS ERRED IN HOLDING THAT MERE SEIZURE OF A CONVEYANCE PURSUANT TO SECTION 68-A [78-A] OF P.D. NO. 705 AS AMENDED BY EXECUTIVE ORDER 277 DOES NOT PLACE SAID CONVEYANCE IN CUSTODIA LEGIS; (2) THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE OPERATIVE ACT GIVING RISE FOR THE SUBJECT CONVEYANCE TO BE IN CUSTODIA LEGIS IS ITS LAWFUL SEIZURE BY THE DENR PURSUANT TO SECTION 68-A [78-A] OF P.D. NO. 705, AS AMENDED BY E.O. NO. 277; AND (3) THE COURT OF APPEALS ERRED IN HOLDING THAT THE COMPLAINT FOR REPLEVIN AGAINST THE PETITIONERS IS NOT A SUIT AGAINST THE STATE. In brief, the pertinent issues for our consideration are: (1) Whether or not the DENR-seized motor vehicle, with plate number FCN 143, is in custodia legis. (2) Whether or not the complaint for the recovery of possession of impounded vehicles, with an application for replevin, is a suit against the State. We will now resolve both issues. The Revised Forestry Code authorizes the DENR to seize all conveyances used in the commission of an offense in violation of Section 78. Section 78 states:

P.D. No. 705, shall be confiscated in favor of the government or disposed of in accordance with pertinent laws, regulations or policies on the matter. Sec. 4.Who are Authorized to Seize Conveyance. The Secretary or his duly authorized representative such as the forest officers and/or natural resources officers, or deputized officers of the DENR are authorized to seize said conveyances subject to policies and guidelines pertinent thereto. Deputized military personnel and officials of other agencies apprehending illegal logs and other forest products and their conveyances shall notify the nearest DENR field offices, and turn oversaid forest products and conveyances for proper action and disposition. In case where the apprehension is made by DENR field officer, the conveyance shall be deposited with the nearest CENRO/PENRO/RED Office as the case may be, for safekeeping wherever it is most convenient and secured. [Emphasis supplied.] Upon apprehension of the illegally-cut timber while being transported without pertinent documents that could evidence title to or right to possession of said timber, a warrantless seizure of the involved vehicles and their load was allowed under Section 78 and 89 of the Revised Forestry Code. Note further that petitioners' failure to observe the procedure outlined in DENR Administrative Order No. 59, series of 1990 was justifiably explained. Petitioners did not submit a report of the seizure to the Secretary nor give a written notice to the owner of the vehicle because on the 3rd day following the seizure, Gabon and Abuganda, drivers of the seized vehicles, forcibly took the impounded vehicles from the custody of the DENR. Then again, when one of the motor vehicles was apprehended and impounded for the second time, the petitioners, again were not able to report the seizure to the DENR Secretary nor give a written notice to the owner of the vehicle because private respondents immediately went to court and applied for a writ of replevin. The seizure of the vehicles and their load was done upon their apprehension for a violation of the Revised Forestry Code. It would be absurd to require a confiscation order or notice and hearing before said seizure could be effected under the circumstances. Since there was a violation of the Revised Forestry Code and the seizure was in accordance with law, in our view the subject vehicles were validly deemed in custodia legis. It could not be subject to an action for replevin. For it is property lawfully taken by virtue of legal process and considered in the custody of the law, and not 20 otherwise. In Mamanteo, et.al. v. Deputy Sheriff Magumun, A.M. No. P-98-1264, promulgated on July 28, 1999, the case involves property to be seized by a Deputy Sheriff in a replevin suit. But said property were already impounded by the DENR due to violation of forestry laws and, in fact, already forfeited in favor of the government by order of the DENR. We said that such property was deemed in custodia legis. The sheriff could not insist on seizing the property already subject of a prior warrant of seizure. The appropriate action should be for the sheriff to inform the trial court of the situation by way of partial Sheriff's Return, and wait for the judge's instructions on the proper procedure to be observed.

Note that property that is validly deposited in custodialegis cannot be the subject of a replevin suit. In Mamanteo v. Deputy Sheriff Magumun, we elucidated further: . . . the writ of replevin has been repeatedly used by unscrupulous plaintiffs to retrieve their chattel earlier taken for violation of the Tariff and Customs Code, tax assessment, attachment or execution. Officers of the court, from the presiding judge to the sheriff, are implored to be vigilant in their execution of the law otherwise, as in this case, valid seizure and forfeiture proceedings could easily be undermined by the simple devise of a writ of 21 replevin. . . On the second issue, is the complaint for the recovery of possession of the two impounded vehicles, with an application for replevin, a suit against the State? 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 23 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 24 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 25 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. Given the circumstances in this case, we need not pursue the Office of the Solicitor General's line for the defense of petitioners concerning exhaustion of administrative remedies. We ought only to recall that exhaustion must be raised at the earliest time possible, even before filing the answer to the complaint or pleading asserting a claim, 26 by a motion to dismiss. If not invoked at the proper time, this ground for dismissal 27 could be deemed waived and the court could take cognizance of the case and try it. ACCORDINGLY, the Petition is GRANTED, and the assailed Decision of the Court of Appeals in CA-G.R. SP No. 29191 is SET ASIDE. Consequently, the Order issued by the Regional Trial Court of Catbalogan, dated May 27, 1992, and the Writ of replevin issued in the Order dated April 24, 1992, are ANNULLED. The Sheriff of the Regional Trial Court of Catbalogan, Branch 29, is directed to take possession of the subject motor vehicle, with plate number FCN 143, for delivery to the custody of and appropriate disposition by petitioners. Let a copy of this decision be provided the Honorable Secretary of Justice for his appropriate action, against any and all persons responsible for the abovecited violation of the Revised Forestry Code. Costs against private respondents. SO ORDERED.
22

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

CARMEN FESTEJO,demandante-apelante, vs. ISAIAS FERNANDO, Director de ObrasPublicas,demandado-apelado. D. Eloy B. Bello en representacion de la apelante. El Procurador General Sr. Pompeyo Diaz y el Procurador Sr. Antonio A. Torres en representaciondelapelado. DIOKNO, J.: Carmen Festejo, duea de unosterrenosazucareros, de un total de unas 9 hectareas y media de superfice, demando a "Isaias Fernando Director, Bureau of public Works, quecomotal Director de ObrasPublicastiene a su cargo los sistemas y proyectos de irrigacion y es el funcionarioresponsable de la construccion de los sistemas de irrigacion en el pais," alegandoque The defendant, as Director of the Bureau of Public Works, without authority obtained first from the Court of First Instance of Ilocos Sur, without obtaining first a right of way, and without the consent and knowledge of the plaintiff, and against her express objection unlawfully took possession of portions of the three parcels of land described above, and caused an irrigation canal to be constructed on the portion of the three parcels of land on or about the month of February 1951 the aggregate area being 24,179 square meters to the damage and prejudice of the plaintiff. ----- R. on A., p. 3. causando a ellavariadosdaos y perjuicios. Pidio, en suconsecuencia, sentenciacondenando el demandado: . . . to return or cause to be returned the possession of the portions of land unlawfully occupied and appropriated in the aggregate area of 24,179 square meters and to return the land to its former condition under the expenses of the defendant. . . . In the remote event that the portions of land unlawfully occupied and appropriated can not be returned to the plaintiff, then to order the defendant to pay to the plaintiff the sum of P19,343.20 as value of the portions totalling an area of 24,179 square meters; ---- R. on A., p. 5. y ademas a pagar P9,756.19 de daos y P5,000 de honorarios de abogado, con lascostas R. on A., pp. 5-6. El demandado, pormediodelProcurador General, presentomocion de sobreseimiento de la demandapor el fundamento de que el Juzgado no tienejurisdiccionparadictarsentenciavalida contra el, todavezquejudicialmente la reclamaciones contra la Republica de Filipinas, y esta no ha presentadosuconsentimiento a la demanda. El Juzgado inferior estimo la mocion y sobreseyo la demanda sin perjuicio y sin costas. En apelacion, la demandantesostienequefueun error considerar la demandacomouna contra la Republica y sobreseer en suvirtud la demanda. La mocion contra "Isaias Fernando, Director de ObrasPublicas, encargado y responsable de la construccion de los sistemas de irrigacion en Filipinas" esunadirigidapersonalmente contra el, poractosqueasumioejecutar en suconceptooficial. La ley no le exime de responsabilidadporlasextralimitacionesquecometa o hagacometer en el desempeo de susfuncionesoficiales. Uncasosemejantees el de Nelson vs.Bobcock (1933) 18 minn.584, NW 49, 90 ALR 1472.Alli el Comisionado de Carreteras, al mejoraruntrozo de la carreteraocupo o se apropio de terrenoscontiguos al derecho de paso. El Tribunal Supremodel Estado declaroqueespersonalmenteresponsable al dueo de los daoscausados. Declaroademasque la ratificacion de lo quehicieronsussubordinados era equivalente a unaorden a los mismos.He aqui lo dijo el Tribunal.

We think the evidence and conceded facts permitted the jury in finding that in the trespass on plaintiff's land defendant committed acts outside the scope of his authority. When he went outside the boundaries of the right of way upon plaintiff's land and damaged it or destroyed its former condition andusefulness, he must be held to have designedly departed from the duties imposed on him by law. There can be no claim that he thus invaded plaintiff's land southeasterly of the right of way innocently. Surveys clearly marked the limits of the land appropriated for the right of way of this trunk highway before construction began. ... "Ratification may be equivalent to command, and cooperation may be inferred from acquiescence where there is power to restrain." It is unnecessary to consider other cases cited, . . ., for as before suggested, the jury could find or infer that, in so far as there was actual trespass by appropriation of plaintiff's land as a dumping place for the rock to be removed from the additional appropriated right of way, defendant planned, approved, and ratified what was done by his subordinates. Nelson vs.Bobcock, 90 A.L.R., 1472, 1476, 1477. La doctrinasobre la responsabilidad civil de los funcionarios en casosparecidos se resume comosigue: Ordinarily the officer or employee committing the tort is personally liable therefor, and may be sued as any other citizen and held answerable for whatever injury or damage results from his tortious act. 49 Am. Jur. 289. . . . If an officer, even while acting under color of his office, exceeds the power conferred on him by law, he cannot shelter himself under the plea that he is a public agent. 43 Am. Jur. 86. It is a general rule that an officer-executive, administrative quasi-judicial, ministerial, or otherwise who acts outside the scope of his jurisdiction and without authorization of law may thereby render himself amenable to personal liability in a civil suit. If he exceed the power conferred on him by law, he cannot shelter himself by the plea that he is a public agent acting under the color of his office, and not personally. In the eye of the law, his acts then are wholly without authority. 43 Am. Jur. 89-90. El articulo 32 delCodigo Civil dice a suvez: ART. 32. Any public officer or emplyee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages: x xx x xx x xx

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

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

Republic of the Philippines SUPREME COURT Manila EN BANC

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

Auditor General refused to restore its possession. It was further alleged that on August 25, 1965, the appraisal committee of the City of Cebu approved Resolution No. 90, appraising the reasonable and just price of Lot No. 647-B at P50.00 per square meter or a total price of P52,250.00. Thereafter, the complaint was amended on June 30, 1966 in the sense that the remedy prayed for was in the alternative, either the restoration of possession or the payment of the just compensation. In the answer filed by defendants, now respondents, through the then Solicitor General, now Associate Justice, Antonio P. Barredo, the principal defense relied upon was that the suit in reality was one against the government and therefore should be dismissed, no consent having been shown. Then on July 11, 1969, the parties submitted a stipulation of facts to this effect: "That the plaintiffs are the registered owners of Lot 647-B of the Banilad estate described in the Survey plan RS-600 GLRO Record No. 5988 and more particularly described in Transfer Certificate of Title No. RT-5963 containing an area of 1,045 square meters; That the National Government in 1927 took possession of Lot 647-B Banilad estate, and used the same for the widening of Gorordo Avenue; That the Appraisal Committee of Cebu City approved Resolution No. 90, Series of 1965 fixing the price of Lot No. 647-B at P50.00 per square meter; That Lot No. 647-B is still in the possession of the National Government the same being utilized as part of the Gorordo Avenue, Cebu City, and that the National Government has not as yet paid 1 the value of the land which is being utilized for public use." The lower court decision now under review was promulgated on January 30, 1969. As is evident from the excerpt to be cited, the plea that the suit was against the government without its consent having been manifested met with a favorable response. Thus: "It is uncontroverted that the land in question is used by the National Government for road purposes. No evidence was presented whether or not there was an agreement or contract between the government and the original owner and whether payment was paid or not to the original owner of the land. It may be presumed that when the land was taken by the government the payment of its value was made thereafter and no satisfactory explanation was given why this case was filed only in 1966. But granting that no compensation was given to the owner of the land, the case is undoubtedly against the National Government and there is no showing that the government has consented to be sued in this case. It may be contended that the present case is brought against the Public Highway Commissioner and the Auditor General and not against the National Government. Considering that the herein defendants are sued in their official capacity the action is one against the National Government who should have 2 been made a party in this case, but, as stated before, with its consent." Then came this petition for certiorari to review the above decision. The principal error assigned would impugn the holding that the case being against the national government which was sued without its consent should be dismissed, as it was in fact dismissed. As was indicated in the opening

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

paragraph of this opinion, this assignment of error is justified. The decision of the lower court cannot stand. We shall proceed to explain why. 1. The government is immune from suit without its consent. Nor is it indispensable that it be the party proceeded against. If it appears that the action, would in fact hold it liable, the doctrine calls for application. It follows then that even if the defendants named were public officials, such a principle could still be an effective bar. This is clearly so where a litigation would result in a financial responsibility for the government, whether in the disbursements of funds or loss of property. Under such circumstances, the liability of the official sued is not personal. The party that could be adversely affected is 4 government. Hence the defense of non-suability may be interposed. So it has been categorically set forth in Syquia v. Almeda Lopez: "However, and this is important, where the judgment in such a case would result not only in the recovery of possession of the property in favor of said citizen but also in a charge against or financial liability to the Government, then the suit should be regarded as one against the government itself, and, consequently, it cannot prosper or be validly entertained by the courts except with the 6 consent of said Government." 2. It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of 7 Telecommunications v. Aligean: "Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that, while claiming to act for the State, he violates or invades the personal and property rights of the plaintiff, under an unconstitutional act or under an assumption of authority which he does not have, is not a suit against the State within the constitutional provision that the State may not be 8 sued without its consent." 3. It would follow then that the prayer in the amended complaint of petitioners being in the alternative, the lower court, instead of dismissing the same, could have passed upon the claim of plaintiffs there, now petitioners, for the recovery of the possession of the disputed lot, since no proceeding for eminent domain, as required by the then Code of Civil Procedure, was 9 10 instituted. However, as noted in Alfonso v. Pasay City, this Court speaking through Justice Montemayor, restoration would be "neither convenient nor feasible because it is now and has been used for road 11 purposes." The only relief, in the opinion of this Court, would be for the 12 government "to make due compensation, ..." It was made clear in such decision that compensation should have been made "as far back as the date
5 3

of the taking." Does it result, therefore, that petitioners would be absolutely remediless since recovery of possession is in effect barred by the above decision? If the constitutional mandate that the owner be compensated for 13 property taken for public use were to be respected, as it should, then a suit of this character should not be summarily dismissed. The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen. Had the government followed the procedure indicated by the governing law at the time, a complaint would have been filed by it, and only upon payment of the compensation fixed by the judgment, or after tender to the party entitled to such payment of the amount fixed, may it "have the right to enter in and upon the land so condemned" to 14 appropriate the same to the public use defined in the judgment." If there were an observance of procedural regularity, petitioners would not be in the sad plaint they are now. It is unthinkable then that precisely because there was a failure to abide by what the law requires, the government would stand to benefit. It is just as important, if not more so, that there be fidelity to legal norms on the part of officialdom if the rule of law were to be maintained. It is not too much to say that when the government takes any property for public use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine of immunity from suit could 15 still be appropriately invoked. Accordingly, the lower court decision is reversed so that the court may proceed with the complaint and determine the compensation to which petitioners are entitled, taking into account the ruling in the above Alfonso case: "As to the value of the property, although the plaintiff claims the present market value thereof, the rule is that to determine due compensation for lands appropriated by the Government, the basis should be the price or value at the time that it was taken from the owner and appropriated by the 16 Government." WHEREFORE, the lower court decision of January 30, 1969 dismissing the complaint is reversed and the case remanded to the lower court for proceedings in accordance with law.