RamonJ.Farolan,Jr.vs.

CourtofTaxAppeals,etAl
Facts:
S/SPacificHawkvesselwithRegistryNo.170arrivedonJanuary30,1972atthePortofManilacarrying
amongothers,80balesofscreennetconsignedtoBagingBuhayTrading(BagingBuhay).Theimport
wasclassifiedunderTariffHeadingno.39.06BoftheTariffandCustomsCodeat35%advalorem.
BagongBuhaypaidthedutiesandtaxesdueintheamountofP11,350.00.TheOfficeoftheCollectorof
Customsorderedareexaminationoftheshipmentuponhearingtheinformationthattheshipment
consistedofmosquitonetmadeofnylonunderTariffHeadingNo.62.02oftheTariffandCustomsCode.
Uponreexamination,itturnsoutthattheshipmentwasundervaluedinquantityandvalueaspreviously
declared.ThustheCollectorofCustomsforfeitedtheshipmentinfavorofthegovernment.Private
respondentfiledapetitiononAugust20,1976forthereleaseofthequestionedgoodswhichtheCourt
denied.OnJune2,1986,64balesoutofthe80baleswerereleasedtoBagongBuhayafterseveralmotion.
Thesixteenremainingbalesweremissing.Therespondentclaimsthatofthe143,454yardsreleased,only
116,950yardswereingoodconditionandtherestwereinbadcondition.Thus,respondentsdemandsthat
theBureauofCustomsbeorderedtopayfordamagesforthe43,050yardsitactuallylost.

Issue:
WhetherornottheCollectorofCustomsmaybeheldliableforthe43,050yardsactuallylostbythe
privaterespondent.

Held:
BureauofCustomscannotbeheldliableforactualdamagesthattheprivaterespondentsustainedwith
regardtoitsgoods.Otherwise,topermitprivaterespondent'sclaimtoprosperwouldviolatethedoctrine
ofsovereignimmunity.SinceitdemandsthattheCommissionerofCustomsbeorderedtopayforactual
damagesitsustained,forwhichultimatelyliabilitywillfallonthegovernment,itisobviousthatthiscase
hasbeenconvertedtechnicallyintoasuitagainstthestate.
Onthispoint,thepoliticaldoctrinethatstatemaynotbesuedwithoutitsconsent,
categoricallyapplies.Asanunincorporatedgovernmentagencywithoutanyseparatejudicialpersonality
ofitsown,theBureauofCustomsenjoysimmunityfromsuit.AlongwiththeBureauofInternal
Revenue,itisinvestedwithaninherentpowerofsovereignty,namelytaxation.Asanagency,theBureau
ofCustomsperformsthegovernmentalfunctionofcollectingrevenueswhichisdefinednotaproprietary
function.ThusprivaterespondentsclaimfordamagesagainsttheCommissionerofCustomsmustfails.

MobilPhilippinesExploration,Inc.,vs.CustomsArrastreService,etal.

FACTS:
FourcasesofrotarydrillpartswereshippedfromabroadonS.S."Leoville"consignedtoMobil
PhilippinesExploration,Inc.,Manila.ItwasdischargedtothecustodyoftheCustomsArrastreService,
theunitoftheBureauofCustomsthenhandlingarrastreoperationstherein.TheCustomsArrastreService
laterdeliveredtothebrokeroftheconsigneethreecasesonly.PetitionerfiledsuitintheCourtofFirst
InstanceofManilaagainsttheCustomsArrastreServiceandtheBureauofCustomstorecoverthevalue
oftheundeliveredcaseplusotherdamages.Therespondentsfiledamotiontodismissonthegroundthat
notbeingpersonsunderthelaw,theycannotbesued.

ISSUE:
WONthedefendantscaninvokestateimmunity.

HELD:
YES.Now,thefactthatanoncorporategovernmententityperformsafunctionproprietaryin
naturedoesnotnecessarilyresultinitsbeingsuable.Ifsaidnongovernmentalfunctionisundertakenas
anincidenttoitsgovernmentalfunction,thereisnowaivertherebyofthesovereignimmunityfromsuit
extendedtosuchgovernmententity.TheBureauofCustoms,torepeat,ispartoftheDepartmentof
Financewithnopersonalityofitsownapartfromthatofthenationalgovernment.Itsprimaryfunctionis
governmental,thatofassessingandcollectinglawfulrevenuesfromimportedarticlesandallothertariff
andcustomsduties,fees,charges,finesandpenalties.Tothisfunction,arrastreserviceisanecessary
incident.

ShellPhilippinesExplorationB.V.vs.EfrenJalos,etal.,
G.R.No.179918,September8,2010

FACTS:
Petitionerhereclaimedthatitcouldnotbesuedpursuanttothedoctrineofstateimmunitywithoutthe
consentoftheRepublicofthePhilippines,onthebasisthatunderServiceContract38,itservedmerelyas
anagentofthePhilippinegovernmentinthedevelopmentoftheMalampayagasreserves.Petitioners
mainundertakingunderServiceContract38istoPerformallpetroleumoperationsandprovideall
necessarytechnologyandfinanceaswellasotherconnectedservicestothePhilippinegovernment.As
definedunderthecontract,petroleumoperationmeansthesearchingforandobtainingPetroleumwithin
thePhilippines,includingthetransportation,storage,handlingandsaleofpetroleumwhetherfor
exportordomesticconsumption.Petitionersprimaryobligationunderthecontractisnottorepresentthe
Philippinegovernmentforthepurposeoftransactingbusinesswiththirdpersons.Rather,itscontractual
commitmentistodevelopandmanagepetroleumoperationsonbehalfoftheState.Consequently,itisnot
anagentofthePhilippinegovernment,butaproviderofservices,technologyandfinancingforthe
MalampayaNaturalGasProject.Notably,thePhilippinegovernmentitselfrecognizedthatpetitioner
couldbesuedinrelationtotheproject.Thisisevidentinthestipulationsagreeduponbythepartiesunder
ServiceContract38.

ISSUES:
WhetherornotthecomplaintisapollutioncasethatfallswithintheprimaryjurisdictionofthePAB
WhetherornotthecomplaintsufficientlyallegesacauseofactionagainstShellandWhetherornotthe
suitisactuallyagainsttheStateandisbarredunderthedoctrineofstateimmunity.

HELD:
TheCourtruledthatpetitionercannotclaimimmunityfromsuitbecauseitisnotanagentoftheRepublic
ofthePhilippines,butthelattersservicecontractorfortheexplorationanddevelopmentofoneofthe
countrysnaturalgasreserves.WhiletheRepublicofthePhilippinesappointedpetitionerastheexclusive
partytoconductpetroleumoperationsintheCamagoMalampayoareaundertheStatesfullcontroland
supervision,itdoesnotfollowthatpetitionerhasbecometheStatesagentwithinthemeaningofthe
law.Anagentisapersonwhobindshimselftorendersomeserviceortodosomethinginrepresentation
oronbehalfofanother,withtheconsentorauthorityofthelatter.Theessenceofanagencyistheagents
abilitytorepresenthisprincipalandbringaboutbusinessrelationsbetweenthelatterandthirdpersons.
Anagentsultimateundertakingistoexecutejuridicalactsthatwouldcreate,modifyorextinguish
relationsbetweenhisprincipalandthirdpersons.Itisthispowertoaffecttheprincipalscontractual
relationswiththirdpersonsthatdifferentiatestheagentfromaservicecontractor.

BanahawBroadcastingvs.PacanaIII

FACTS:
Respondentsinthecaseatbar(theDXWGpersonnel),areemployeesoftheDXWGIliganCityradio
stationwhichisownedbypetitionerBanahawBroadcastingCorporation(BBC),acorporationmanaged
byIntercontinentalBroadcastingCorporation(IBC).
OnAugust29,1995,theDXWGpersonnelfiledacomplaintforillegaldismissal,unfairlaborpractice,
reimbursementofunpaidCollectiveBargainingAgreement(CBA)benefits,andattorneysfeesagainst
IBCandBBC.
OnJune21,1996,LaborArbiter(LA)decidedinfavouroftheDXWGpersonnel.
Both,parties,however,appealedtotheNationalLaborRelationsCommission(NLRC).
OnMay15,1997,aMotiontoDismiss,Release,WaiverandQuitclaim,wasjointlyfiledbyIBCandthe
DXWGpersonnelbasedonthelatter'sadmissionthatIBCisnottheiremployerasitdoesnotown
DXWGIliganCity.TheNLRCgrantedtheMotionwithrespecttoIBC.
BBCfiledanMR.
OnDecember12,1997,theNLRCissuedaResolutionvacatingtheDecisionofLAandremandingthe
casetothearbitrationbranchoforiginonthegroundthatwhilethecomplaintwasfiledagainstbothIBC
andBBC,onlyIBCwasservedwithsummons,orderedtosubmitapositionpaper,andfurnishedacopy
oftheassaileddecision.
OnOctober15,1998,thenewLArenderedaDecisionadjudgingBBCtobeliableforthesameamount
discussedinthevacatedoriginalDecisionofthepreviousLA.
BothBBCandrespondentsappealedtotheNLRC.BBCchallengedthemonetaryawarditself.Inthesame
MemorandumofAppeal,BBCincorporatedaMotionfortheRecomputationoftheMonetaryAward(of
theLaborArbiter),inorderthattheappealbondmaybereduced.
OnSeptember16,1999,theNLRCissuedanOrderDenyingtheMotionfortheRecomputationofthe
MonetaryAward.TheNLRCorderedBBCtoposttherequiredbondwithin10daysfromreceiptofsaid
Order,withawarningthatnoncompliancewillcausethedismissaloftheappealfor
nonperfection.InsteadofcomplyingwiththeOrdertoposttherequiredbond,BBCfiledaMotionfor
Reconsideration,allegingthistimethatsinceitiswhollyownedbytheRepublicofthePhilippines,itneed
notpostanappealbond.
OnNovember22,1999,theNLRCrendereditsDecision.InsaidDecision,theNLRCdeniedtheMRof
BBCandaccordinglydismissedtheappealofBBCfornonperfection.
BBCfiledanMRwhichwasdeniedbytheNLRC.
BBCfiledwiththeCAaPetitionforCertiorariunderRule65.
OnApril15,2005,theCArenderedtheassailedDecisiondenyingBBCsPetitionforCertiorari.TheCA
heldthatBBC,thoughownedbythegovernment,isacorporationwithapersonalitydistinctfromthe
Republicoranyofitsagenciesorinstrumentalities,andthereforedonotpartakeinthelatter'sexemption
fromthepostingofappealbonds.
TheCourtofAppealsdeniedtheMR.Hence,thisPetitionforReview.

ISSUE:
WhetherBBCisexemptfrompostinganappealbond.

HELD:
Petitiondenied.
GOCCsNOTEXEMPTFROMPOSTINGBOND
Generally,thegovernmentandalltheattachedagencieswithnolegalpersonalitydistinctfromtheformer
areexemptfrompostingappealbonds,whereasgovernmentownedandcontrolledcorporations(GOCCs)
arenotsimilarlyexemptedexceptifitissuedinrelationtoitsgovernmentalfunctions.Here,BBCwas
organizedasaprivatecorporation,sequesteredinthe1980sandtheownershipofwhichwassubsequently

transferredtothegovernment.Itsprimaryfunctionistoengageincommercialradioandtelevision
broadcasting.ItisthereforeclearthatBBCsfunctioniscommercialorproprietaryandnot
governmental.Assuch,BBCisnotentitledtoanexemptionfromthepostingofanappealbond.
FAILURETOPOSTBONDCONSTITUTEDNONPERFECTIONOFAPPEAL
Incaseofajudgmentinvolvingamonetaryaward,anappealbytheemployermaybeperfectedonlyupon
thepostingofacashorsuretybondissuedbyareputablebondingcompanydulyaccreditedbythe
Commissionintheamountequivalenttothemonetaryawardinthejudgmentappealedfrom.Theposting
oftheappealbondwithintheperiodprovidedbylawisnotmerelymandatorybutjurisdictional.The
failureonthepartofBBCtoperfecttheappealthushadtheeffectofrenderingthejudgmentfinaland
executory.

EUTIQUIOBERMOY,ETAL.,PLAINTIFFSAPPELLANTS,V.S.PHILIPPINENORMAL
COLLEGE,ETAL.DEFENDANTSAPPELLEES.

Facts
: On July 6, 1954, (24) twenty four employees from its dormitory known as Normal Hall of the
Philippine Normal College, filled an action in the COF of Manila againstthePNC for the recoveryof
salarydifferentialsandovertimepay.TheSolicitorGeneral onbehalfofthedefendantanswersanddenies
the latter liability. Thecourt ordereditdismissedbefore the case was triedonthemerits,onthe ground
that neither one of the defendants was a corporation or a juridicalentity with capacityto be sued.The
plaintiffs took an appeal to Supreme Court, alleging that it was an error to dismiss their case on the
ground that, R.A.No.416tookeffectJuly,1949convertedPNStoPNC,thuscreatedaBoard ofTrustees
to administer the affairs as a corporation under section 13 of the amended Act1455(Corporate Law),
withthepowertosueandtobesuedinanycourt.

Issue:
WhetherornotthePNCasagovernmentcorporationcanbesued.

Held:
Thestatehasalreadygiventheconsentbyinvestingthecollegewithexpresspowertobesuedin
thecourt.TheactAuthorizestheCollegetobesuedisalsomadeclearinSection6,whereitisprovided
thatallprocessagainsttheBoardofTrusteesshallbeservedonthePresidentorSecretarythereof.The
orderappealedfromisrerevokedandthecaseremandedtothecourtoforiginforfurtherproceedings.No
cost.

BureauofPrinting,etal.vs.BureauofPrintingEmployeesAssociation(NLU),etal.

Facts: BPEA (respondents) filed a complaint by an acting prosecutor of the Industrial Court against
petitioners BOP (secretary of Department of General Services and Director of BOP). The complaint
alleged that both the secretary of DOG and the director of BOP have been engaging in unfair labor
practices. Answering the complaint, the petitioners (BOP), denied the charges ofunfairlaborpractices
attributed to them and alleged that the BPEA complainants were suspended pending result of
administrativeinvestigationagainstthemforbreach ofCivilServicerulesandregulationsthattheBOPis
not an industrial concern engaged for the purpose ofgainbutoftherepublicperforminggovernmental
functions. Forrelief, they prayed that the case be dismissedforlack ofjurisdiction. But lateronJanuary
27, 1959, the trialjudge ofIndustrialCourt sustainedthejurisdiction of the courton the theorythat the
functions of the BOP are exclusively proprietary in nature, since they receives outside jobsandthat
many of its employees are paid for overtime work on regular working days and holidays, therefore
consequently denied the prayed for dismissal, which broughtthepetitioners(BOP)topresentpetitionfor
certiorariandprohibition.

Issue:
WhetherornottheBOPcanbesued.

Held:
As an office of the Government, without anycorporateorjuridicalpersonality,theBOPcannotbe
sued(Sec.1,Rule33,Rulesofcourt).
It is true that BOP receives outside jobsandthatmany ofits employees arepaid for overtime workon
regular working days and holidays, but these facts do not justify the conclusion that its functions are
exclusively proprietary in nature. Overtime work in the BOP is done only when the interest of the
service so requires. As a matter of administrative policy, the overtime compensation may be paid, but
suchpayment is discretionarywiththehead of the Bureaudependinguponitscurrent appropriations,so
thatitcannotbethebasisforholdingthatthefunctionsofsaidBureauarewhollyproprietaryincharacter.
Any suit,actionorproceeding againstit, if itwereto produceanyeffect,would actuallybeasuit,action
or proceeding against theGovernmentitself,and theruleissettledthattheGovernmentcannotbesued
withoutitsconsent,muchlessoveritsjurisdiction.
Disposition:The petition for awrit ofprohibitionis granted. Theorderscomplainedof aresetasideand
thecomplaint forunfairlaborpracticeagainstthe petitionersisdismissed,withcostsagainst respondents
otherthantherespondentcourt.

CarmenFestejovs.IsaiasFernando

ConstitutionalLaw.PoliticalLaw.DoctrineofStateImmunity.
GRNo.L5156March11,1954

FACTS:
Thedefendant,asDirectoroftheBureauofPublicWorks,tookpossessionofthethreeparcels
oflandonFebruary1951withoutobtainingfirstarightofway,withoutconsentandknowledgeof
plaintiff,andagainstherexpressobjection.Thepetitionerdemandsthatthelandsberestoredtoitsformer
conditionandthedefendanttopaytheplaintiffthesumofP19,343.20fortheunlawfultakingpossession
ofthedefendant.

ISSUE:
Isthedefendantliablefortheunlawfulpossessionofthelands?

HELD:
Theevidenceandconcededfactspermittedthejuryinfindingthatinthetrespassonplaintiffs
land,defendantcommittedactsoutsidethescopeofhisauthority.Therecanbenoclaimthathethus
invadedplaintiffslandsoutheasterlyoftherightofwayinnocentlyforthesurveysclearlymarkedthe
limitsofthelandappropriatedfortherightofway.Itisageneralrulethatanofficerexecutive,
administrative,quasijudicial,ministerial,orotherwisewhoactsoutsidethescopeofhisjurisdictionand
withoutauthorizationoflawmaytherebyrenderhimselfamenabletopersonalliabilityinacivilsuit.He
cannotshelterhimselfbythepleathatheisapublicagentactingunderthecolorofhisofficeandnot
personally.

EmilianoR.DeLosSantos,etal.vs.IntermediateAppellateCourt,etal.

Topic:SovereigntySuitsnotagainsttheStateExpropriation

Facts:
PetitionersarecoownersofaparceloflandinBarrioWawa,Binangonan,Rizal(area:19,061sq
m)

PetitionersallegethatinOctober1981,withouttheirknowledgeorconsent,LorenzoCadiente,a
privatecontractorandtheProvincialEngineerofRizalconstructedaroad9meterswideand
128.70meterslongoccupying1,165sqmoftheirparcelofland
Asidefromtheroad,anartificialcreek23.20meterswideand128.69meterslongwasalso
constructed,occupyinganareaof2,906sqmoftheirproperty
Constructedinazigzagmanner,thecreakmeanderedthroughtheirproperty
Petitionersfilestwocaseswhichwerelaterconsolidated
SolicitorGeneralfiledamotiontodismissbothcasesseveralgrounds,includingthatbothcases
wereinrealitysuitsagainstthestatewhichcouldnotbemaintainedwithouttheState'sconsent
ThelowercourtdismissedthepetitionpetitionerselevatedthecasetotheSConcertiorari,which
referredthecasesbacktotheIAC
IACruled:thetwoactionscannotbemaintainedbecausetheyaresuitsagainsttheStatewithout
consent
CasewasagainelevatedtotheSConcertiorari

Issue:
Whetherornottheconsolidatedactions,assuitsagainsttheState,canbemaintained
Holding:
Yes.
Ratio:
Thedoctrineofgovernmentalimmunityfromsuitcannotserveasaninstrumentforperpetrating
aninjusticeonacitizenitcannotserveasdefensebytheStateagainstanactionforpaymentby
theowner
Therespondentgovernmentofficialsexecutedashortcutinappropriatingpetitioners'propertyfor
publicusenoexpropriationproceedingshadbeenundertakenpriortotheconstructionofthe
projects
Damagesmaybeawardedthepetitionersintheformoflegalinterestonthepriceofthelandto
bereckonedfromthetimeoftheunlawfultaking
Petitiongranted.CivilCasesremandedtothelowercourtfortrialonthemeritsaftertheRepublicofthe
Philippinesshallhavebeenimpleadedasdefendantinbothcases.

Phil.NationalRailways,etal.vs.IntermediateAppellateCourt,etal.

FACTS:
ThepassengerexpresstrainofPhilippineNationalRailways(PNR)andapassengerbusof
BaliwagTransitInc.collidedattherailroadcrossingatBarrioBalungao,CalumpitBulacanat1:30inthe
afternoonofAugust10,1947causingdamagetothebusanditspassengers,18ofwhomdiedand53
sufferedphysicalinjuries.Plaintiffallegesthatthecollisionwasduetothenegligenceandimprudenceof
PNRanditsengineerHonorioCirbadoinoperatinginabusyintersectionwithoutanybars,semaphores,
signallights,flagmanorswitchman.

ISSUE:
1)Whobetweenthepetitionerandrespondentwasnegligent?
2)IsPNRimmunefromsuit?

HELD:
Thereisnoadmissibleevidencetoshowthatthebusdriverdidnottakenecessaryprecautionin
traversingthetrack.Contributorynegligencemaynotbeascribedtothebusdriverforhehadtaken
necessaryprecautionsbeforepassingovertherailwaytrack.ThefailureofPNR,ontheotherhand,toput
acrossbar,orsignallight,flagman,orswitchmanorsemaphoresisevidenceofnegligenceontheirpart.

Bythedoctrineofimpliedpowers,thepowertosueandbesuedisimplicitfromthefacultytotransact
privatebusiness.PNRisnotexercisinggovernmentalpowers,assuchitisnotimmunefromsuit.

Republicvs.GuillermoP.Villasor,etal.

FACTS:
OnJuly3,1961,adecisionwasrenderedinSpecialProceedingsNo.2156Rinfavorof
respondentsP.J.KienerCo.,Ltd.,GavinoUnchuan,andInternationalConstructionCorporation,and
againstthepetitionerherein,confirmingthearbitrationawardsubjectofSpecialProceedings.

OnJune24,1969,respondentHonorableGuillermoP.Villasor,issuedanOrderdeclaringtheaforestated
decisionofJuly3,1961finalandexecutory,directingtheSheriffsofRizalProvince,QuezonCity[as
wellas]Manilatoexecutethesaiddecision.PursuanttothesaidOrder,thecorrespondingAliasWritof
Executionwasissued.OnthestrengthoftheaforementionedAliasWritofExecution,therespondent
ProvincialSheriffofRizalservednoticesofgarnishmentwithseveralBanks,speciallyonthe`monies
duetheArmedForcesofthePhilippinesintheformofdeposits,sufficienttocovertheamountmentioned
inthesaidWritofExecutionthePhilippineVeteransBankreceivedthesamenoticeofgarnishment.
ThefundsoftheArmedForcesofthePhilippinesondepositwiththeBanks,particularly,withthe
PhilippineVeteransBankandthePhilippineNationalBank[or]theirbranchesarepublicfundsduly
appropriatedandallocatedforthepaymentofpensionsofretirees,payandallowancesofmilitaryand
civilianpersonnelandformaintenanceandoperationsoftheArmedForcesofthePhilippines.

PetitionerthenallegedthatrespondentJudge,HonorableGuillermoP.Villasor,actedinexcessof
jurisdiction[or]withgraveabuseofdiscretionamountingtolackofjurisdictioningrantingtheissuance
ofanaliaswritofexecutionagainstthepropertiesoftheArmedForcesofthePhilippines,hence,the
AliasWritofExecutionandnoticesofgarnishmentissuedpursuanttheretoarenullandvoid."

Intheanswerfiledbyrespondents,thefactssetforthwereadmittedwiththeonlyqualificationbeingthat
thetotalawardwasintheamountofP2,372,331.40.

ISSUE:
Whetherornotthenoticesofgarnishmentarenullandvoid.

HELD:
TheRepublicofthePhilippinesdidrightinfilingthiscertiorariandprohibitionproceeding.
WhatwasdonebyrespondentJudgeisnotinconformitywiththedictatesoftheConstitution.

Itisafundamentalpostulateofconstitutionalismflowingfromthejuristicconceptofsovereigntythatthe
stateaswellasitsgovernmentisimmunefromsuitunlessitgivesitsconsent.Itisreadilyunderstandable
whyitmustbeso.IntheclassicformulationofHolmes:"Asovereignisexemptfromsuit,notbecauseof
anyformalconceptionorobsoletetheory,butonthelogicalandpracticalgroundthattherecanbeno
legalrightasagainsttheauthoritythatmakesthelawonwhichtherightdepends."Sociological
jurisprudencesuppliesananswernotdissimilar.

Thisfundamentalpostulateunderlyingthe1935Constitutionisnowmadeexplicitintherevisedcharter.
Itisthereinexpresslyprovided:"TheStatemaynotbesuedwithoutitsconsent."Acorollary,both
dictatedbylogicandsoundsensefromsuchabasicconceptisthatpublicfundscannotbetheobjectofa
garnishmentproceedingeveniftheconsenttobesuedhadbeenpreviouslygrantedandthestateliability
adjudged.