Political Law 1 Cases

[G.R. No. L-9657. November 29, 1956.
]
LEOPOLDO T. BACANI and MATEO A. MATOTO, Plaintiffs-Appellees, vs. NATIONAL
COCONUT CORPORATION, ET AL., Defendants, NATIONAL COCONUT
CORPORATION and BOARD OF LIQUIDATORS, Defendants-Appellants.
DECISION
BAUTISTA ANGELO, J.:
Plaintiffs herein are court stenographers assigned in Branch VI of the Court of First Instance of
Manila. During the pendency of Civil Case No. 2293 of said court, entitled Francisco Sycip vs.
National Coconut Corporation, Assistant Corporate Counsel Federico Alikpala, counsel for
Defendant, requested said stenographers for copies of the transcript of the stenographic notes
taken by them during the hearing. Plaintiffs complied with the request by delivering to Counsel
Alikpala the needed transcript containing 714 pages and thereafter submitted to him their bills
for the payment of their fees. The National Coconut Corporation paid the amount of P564 to
Leopoldo T. Bacani and P150 to Mateo A. Matoto for said transcript at the rate of P1 per page.
Upon inspecting the books of this corporation, the Auditor General disallowed the payment of
these fees and sought the recovery of the amounts paid. On January 19, 1953, the Auditor
General required the Plaintiffs to reimburse said amounts on the strength of a circular of the
Department of Justice wherein the opinion was expressed that the National Coconut
Corporation, being a government entity, was exempt from the payment of the fees in question.
On February 6, 1954, the Auditor General issued an order directing the Cashier of the
Department of Justice to deduct from the salary of Leopoldo T. Bacani the amount of P25 every
payday and from the salary of Mateo A. Matoto the amount of P10 every payday beginning
March 30, 1954. To prevent deduction of these fees from their salaries and secure a judicial
ruling that the National Coconut Corporation is not a government entity within the purview of
section 16, Rule 130 of the Rules of Court, this action was instituted in the Court of First
Instance of Manila.
Defendants set up as a defense that the National Coconut Corporation is a government entity
within the purview of section 2 of the Revised Administrative Code of 1917 and, hence, it is
exempt from paying the stenographers fees under Rule 130 of the Rules of Court. After trial, the
court found for the Plaintiffs declaring (1) that Defendant National Coconut Corporation is not
a government entity within the purview of section 16, Rule 130 of the Rules of Court; chan
roblesvirtualawlibrary(2) that the payments already made by said Defendant to Plaintiffs herein
and received by the latter from the former in the total amount of P714, for copies of the
stenographic transcripts in question, are valid, just and legal; chan roblesvirtualawlibraryand (3)
that Plaintiffs are under no obligation whatsoever to make a refund of these payments already
received by them. This is an appeal from said decision.
Under section 16, Rule 130 of the Rules of Court, the Government of the Philippines is exempt
from paying the legal fees provided for therein, and among these fees are those which
stenographers may charge for the transcript of notes taken by them that may be requested by any
interested person (section 8). The fees in question are for the transcript of notes taken during the
hearing of a case in which the National Coconut Corporation is interested, and the transcript was
requested by its assistant corporate counsel for the use of said corporation.
On the other hand, section 2 of the Revised Administrative Code defines the scope of the term
Government of the Republic of the Philippines as follows:chanroblesvirtuallawlibrary
The Government of the Philippine Islands is a term which refers to the corporate
governmental entity through which the functions of government are exercised throughout the
Political Law 1 CasesPage 1 of 182
Philippine Islands, including, save as the contrary appears from the context, the various arms
through which political authority is made effective in said Islands, whether pertaining to the
central Government or to the provincial or municipal branches or other form of local
government.
The question now to be determined is whether the National Coconut Corporation may be
considered as included in the term Government of the Republic of the Philippines for the
purposes of the exemption of the legal fees provided for in Rule 130 of the Rules of Court.
As may be noted, the term Government of the Republic of the Philippines refers to a
government entity through which the functions of government are exercised, including the
various arms through which political authority is made effective in the Philippines, whether
pertaining to the central government or to the provincial or municipal branches or other form of
local government. This requires a little digression on the nature and functions of our government
as instituted in our Constitution.
To begin with, we state that the term Government may be defined as that institution or
aggregate of institutions by which an independent society makes and carries out those rules of
action which are necessary to enable men to live in a social state, or which are imposed upon the
people forming that society by those who possess the power or authority of prescribing them
(U.S. vs. Dorr, 2 Phil., 332). This institution, when referring to the national government, has
reference to what our Constitution has established composed of three great departments, the
legislative, executive, and the judicial, through which the powers and functions of government
are exercised. These functions are twofold:chanroblesvirtuallawlibrary constitute and ministrant.
The former are those which constitute the very bonds of society and are compulsory in nature;
chan roblesvirtualawlibrarythe latter are those that are undertaken only by way of advancing the
general interests of society, and are merely optional. President Wilson enumerates the constituent
functions as follows:chanroblesvirtuallawlibrary
(1) The keeping of order and providing for the protection of persons and property from
violence and robbery.
(2) The fixing of the legal relations between man and wife and between parents and children.
(3) The regulation of the holding, transmission, and interchange of property, and the
determination of its liabilities for debt or for crime.
(4) The determination of contract rights between individuals.
(5) The definition and punishment of crime.
(6) The administration of justice in civil cases.
(7) The determination of the political duties, privileges, and relations of citizens.
(8) Dealings of the state with foreign powers:chanroblesvirtuallawlibrary the preservation of
the state from external danger or encroachment and the advancement of its international
interests. (Malcolm, The Government of the Philippine Islands, p. 19.)
The most important of the ministrant functions are:chanroblesvirtuallawlibrary public works,
public education, public charity, health and safety regulations, and regulations of trade and
industry. The principles deter mining whether or not a government shall exercise certain of these
optional functions are:chanroblesvirtuallawlibrary (1) that a government should do for the public
welfare those things which private capital would not naturally undertake and (2) that a
government should do these things which by its very nature it is better equipped to administer
for the public welfare than is any private individual or group of individuals. (Malcolm, The
Government of the Philippine Islands, pp. 19-20.)
From the above we may infer that, strictly speaking, there are functions which our government is
required to exercise to promote its objectives as expressed in our Constitution and which are
exercised by it as an attribute of sovereignty, and those which it may exercise to promote merely
the welfare, progress and prosperity of the people. To this latter class belongs the organization of
those corporations owned or controlled by the government to promote certain aspects of the
economic life of our people such as the National Coconut Corporation. These are what we call
government-owned or controlled corporations which may take on the form of a private
enterprise or one organized with powers and formal characteristics of a private corporations
under the Corporation Law.
The question that now arises is:chanroblesvirtuallawlibrary Does the fact that these corporation
perform certain functions of government make them a part of the Government of the
Philippines?
The answer is simple:chanroblesvirtuallawlibrary they do not acquire that status for the simple
reason that they do not come under the classification of municipal or public corporation. Take
for instance the National Coconut Corporation. While it was organized with the purpose of
adjusting the coconut industry to a position independent of trade preferences in the United
States and of providing Facilities for the better curing of copra products and the proper
utilization of coconut by-products, a function which our government has chosen to exercise to
promote the coconut industry, however, it was given a corporate power separate and distinct
from our government, for it was made subject to the provisions of our Corporation Law in so far
as its corporate existence and the powers that it may exercise are concerned (sections 2 and 4,
Commonwealth Act No. 518). It may sue and be sued in the same manner as any other private
corporations, and in this sense it is an entity different from our government. As this Court has
aptly said, The mere fact that the Government happens to be a majority stockholder does not
make it a public corporation (National Coal Co. vs. Collector of Internal Revenue, 46 Phil.,
586-587). By becoming a stockholder in the National Coal Company, the Government divested
itself of its sovereign character so far as respects the transactions of the corporation cralaw .
Unlike the Government, the corporation may be sued without its consent, and is subject to
taxation. Yet the National Coal Company remains an agency or instrumentality of government.
(Government of the Philippine Islands vs. Springer, 50 Phil., 288.)
To recapitulate, we may mention that the term Government of the Republic of the Philippines
used in section 2 of the Revised Administrative Code refers only to that government entity
through which the functions of the government are exercised as an attribute of sovereignty, and
in this are included those arms through which political authority is made effective whether they
be provincial, municipal or other form of local government. These are what we call municipal
corporations. They do not include government entities which are given a corporate personality
separate and distinct from the government and which are governed by the Corporation Law.
Their powers, duties and liabilities have to be determined in the light of that law and of their
corporate charters. They do not therefore come within the exemption clause prescribed in section
16, Rule 130 of our Rules of Court.
Public corporations are those formed or organized for the government of a portion of the State.
(Section 3, Republic Act No. 1459, Corporation Law).
The generally accepted definition of a municipal corporation would only include organized
cities and towns, and like organizations, with political and legislative powers for the local, civil
government and police regulations of the inhabitants of the particular district included in the
boundaries of the corporation. Heller vs. Stremmel, 52 Mo. 309, 312.
In its more general sense the phrase municipal corporation may include both towns and
counties, and other public corporations created by government for political purposes. In its more
common and limited signification, it embraces only incorporated villages, towns and cities.
Dunn vs. Court of County Revenues, 85 Ala. 144, 146, 4 So. 661. (McQuillin, Municipal
Corporations, 2nd ed., Vol. 1, p. 385.)
We may, therefore, define a municipal corporation in its historical and strict sense to be the
incorporation, by the authority of the government, of the inhabitants of a particular place or
district, and authorizing them in their corporate capacity to exercise subordinate specified
powers of legislation and regulation with respect to their local and internal concerns. This power
of local government is the distinctive purpose and the distinguishing feature of a municipal
corporation proper. (Dillon, Municipal Corporations, 5th ed., Vol. I, p. 59.)
It is true that under section 8, Rule 130, stenographers may only charge as fees P0.30 for each
page of transcript of not less than 200 words before the appeal is taken and P0.15 for each page
after the filing of the appeal, but in this case the National Coconut Corporation has agreed and in
fact has paid P1.00 per page for the services rendered by the Plaintiffs and has not raised any
objection to the amount paid until its propriety was disputed by the Auditor General. The
payment of the fees in question became therefore contractual and as such is valid even if it goes
beyond the limit prescribed in section 8, Rule 130 of the Rules of Court.
As regards the question of procedure raised by Appellants, suffice it to say that the same is
insubstantial, considering that this case refers not to a money claim disapproved by the Auditor
General but to an action of prohibition the purpose of which is to restrain the officials concerned
from deducting from Plaintiffs salaries the amount paid to them as stenographers fees. This
case does not come under section 1, Rule 45 of the Rules of Court relative to appeals from a
decision of the Auditor General.
Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.
Paras, C.J., Bengzon, Padilla, Montemayor, Labrador, Concepcion, Reyes, J. B. L.,
Endencia and Felix, JJ., concur.
G.R. No. L-32052 July 25, 1975

PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, REUEL ABRAHAM, MILAGROS ABUEG,
AVELINO ACOSTA, CAROLINA ACOSTA, MARTIN AGSALUD, JOSEFINA
AGUINALDO, GLORIA ALBANO, ANTONIO ALUNING, COSME ALVAREZ, ISABEL
ALZATE, AURORA APUSEN, TOMAS ARCANGEL, LOURDES ARJONELLO, MANUEL
AROMIN, DIONISIO ASISTIN, JOSE AURE, NICASIO AZNAR, EUGENIO AZURIN,
CLARITA BACUGAN, PIO BALAGOT, HEREDIO BALMACEDA, ESTHER BANAAG,
JOVENCIO BARBERO, MONICO BARBADILLO, HERNANDO BARROZO, FILIPINA
BARROZO, REMEDIO BARTOLOME, ANGELINA BASCOS, JOSE BATALLA, ALMARIO
BAUTISTA, EUGENIO BAUTISTA, JR., HERMALO BAUTISTA, JUANITO BAUTISTA,
SEVERINO BARBANO, CAPPIA BARGONIA, ESMERALDA BERNARDEZ, RUBEN
BERNARDEZ, ALFREDO BONGER, TOMAS BOQUIREN, ANGELINA BRAVO,
VIRGINIA BRINGA, ALBERTO BUNEO, SIMEON CABANAYAN, LUCRECIA
CACATIAN, LEONIDES CADAY, ANGELINA CADOTTE, IGNACIO CALAYCAY,
PACIFICO CALUB, RUFINO CALUZA, CALVIN CAMBA, ALFREDO CAMPOSENO,
BAGUILITA CANTO, ALFREDO CARRERA, PEDRO CASES, CRESCENTE CASIS,
ERNESTO CASTANEDA, HERMINIO CASTILLO, JOSE CASTRO, LEONOR CASTRO,
MADEO CASTRO, MARIA PINZON CASTRO, PABLO CATURA, RESTITUTO
CESPADES, FLORA CHACON, EDMUNDO CORPUZ, ESTHER CRUZ, CELIA
CUARESMA, AQUILINO DACAYO, DIONISIA DASALLA, SOCORRO DELFIN,
ABELARDO DIAZ, ARTHUR DIAZ, CYNTHIA DIZON, MARCIA DIZON, ISABELO
DOMINGO, HONORATA DOZA, CAROLINA DUAD, JUSTINIANO EPISTOLA, ROMEO
ENCARNACION, PRIMITIVO ESCANO, ELSA ESPEJO, JUAN ESPEJO, RIZALINA
ESQUILLO, YSMAEL FARINAS, LORNA FAVIS, DAN FERNANDEZ, JAIME
FERNANDEZ, ALFREDO FERRER, MODESTO FERRER, JR., EUGENIO FLANDEZ,
GUILLERMO FLORENDO, ALFREDO FLORES, DOMINGA FLORES, ROMEO FLORES,
LIGAYA FONTANILLA, MELCHOR GASMEN, LEILA GASMENA, CONSUELO
GAROLAGA, ALFONSO GOROSPE, CESAR GOROSPE, RICARDO GOROSPE, JR.,
CARLITO GUZMAN, ERNESTO DE GUZMAN, THELMA DE GUZMAN, FELIX
HERNANDEZ, SOLIVEN HERNANDO, FRANCISCO HIDALGO, LEONILO INES, SIXTO
JAQUIES, TRINIDAD JAVIER, FERMIN LAGUA, GUALBERTO LAMBINO, ROMAN
LANTING, OSCAR LAZO, ROSARIO LAZO, JOSEFINA DE LARA, AMBROSIO LAZOL,
NALIE LIBATIQUE, LAMBERTO LLAMAS, ANTONIO LLANES, ROMULA LOPEZ,
ADRIANO LORENZANA, ANTONIO MACARAEG, ILDEFONSO MAGAT, CECILIO
MAGHANOY, ALFONSO MAGSANOC, AVELINA MALLARE, AUGUSTO MANALO,
DOMINADOR MANASAN, BENITO MANECLANG, JR., TIRSO MANGUMAY, EVELIA
MANZANO, HONORANTE MARIANO, DOMINGO MEDINA, MARTIN MENDOZA,
PERFECTO MILANA, EMILIO MILLAN, GREGORIO MONEGAS, CONSOLACION
NAVALTA, NOLI OCAMPO, VICENTE CLEGARIO, ELPIDIO PALMONES, ARACELI
PANGALANGAN, ISIDORO PANLASIGUI, JR., ARTEMIO PARIS, JR., FEDERICO
PAYUMO, JR., NELIA PAYUMO, BITUEN PAZ, FRANCISCO PENGSON, OSCAR
PERALTA, PROCORRO PERALTA, RAMON PERALTA, MINDA PICHAY, MAURO
PIMENTEL, PRUDENCIO PIMENTEL, LEOPOLDO PUNO, REYNALDO RABE,
ROLANDO REA, CONSTANTINO REA, CECILIA RICO, CECILIO RILLORAZA,

AURORA ROMAN, MERCEDES RUBIO, URSULA RUPISAN, OLIVIA SABADO,
BERNARDO SACRAMENTO, LUZ SALVADOR, JOSE SAMSON, JR., ROMULA DE LOS
SANTOS, ANTONIO SAYSON, JR., FLORANTE SERIL, MARIO SISON, RUDY SISON,
PROCEDIO TABIN, LUCENA TABISULA, HANNIBAL TAJANO, ENRIQUE TIANGCO,
JR., JUSTINIANO TOBIAS, NYMIA TOLENTINO, CONSTANTE TOLENTINO, TEODORO
TOREBIO, FEDERICO TRINIDAD, JOVENCINTO TRINIDAD, LAZARO VALDEZ,
LUDRALINA VALDEZ, MAXIMINA VALDEZ, FRANCISCO VELASCO, JR., ROSITA
VELASCO, SEVERO VANTANILLA, VENANCIO VENTIGAN, FELICITAS VENUS,
NIEVES DE VERA, ELISEO VERSOZA, SILVESTRE VILA, GLORIA VILLAMOR,
ALEJANDRO VELLANUEVA, DAVID VILLANUEVA, CAROLINA VILLASENOR
ORLANDO VILLASTIQUE, MAJELLA VILORIN, ROSARIO VILORIA, MAY VIRATA,
FEDERICO VIRAY, MELBA YAMBAO, MARIO ZAMORA, AUTENOR ABUEG, SOTERO
ACEDO, HONRADO ALBERTO, FELIPE ALIDO, VICENTE ANCHUELO, LIBERTAD
APEROCHO, MARIANO BALBAGO, MARIO BALMACEDA, DAISY BICENIO, SYLVIA
BUSTAMANTE, RAYMUNDO GEMERINO, LAZARO CAPURAS, ROGELIO
CARUNGCONG, ZACARIAS CAYETANO, JR., LILY CHUA, ANDRES CRUZ, ARTURO
CRUZ, BIENVENIDO ESTEBAN, PABLO JARETA, MANUEL JOSE, NESTORIA
KINTANAR, CLEOPATRIA LAZEM. MELCHOR LAZO, JESUS LUNA, GASPAR
MARINAS, CESAR MAULSON, MANUEL MEDINA, JESUS PLURAD, LAKAMBINI
RAZON, GLORIA IBANEZ, JOSE SANTOS, ELEAZAR SQUI, JOSE TAMAYO, FELIPE
TENORIO, SILVINO UMALI, VICENTE ZARA, SATURNINO GARCIA, WILLIAM
GARCIA, NORMA GARINGARAO, ROSARIO ANTONIO, RUBEN BAUTISTA, QUIRINO
PUESTO, NELIA M. GOMERI, OSCAR R. LANUZA, AURORA M. LINDAYA, GREGORIO
MOGSINO, JACRM B. PAPA, GREGORIO R. RIEGO, TERESITA N. ROZUL,
MAGTANGOL SAMALA, PORFIRIO AGOCOLIS, LEONARDO MONTE, HERMELINO
PATI, ALFREDO PAYOYO, PURIFICACION ROJAS, ODANO TEANO, RICARDO
SANTIAGO, and MARCELO MANGAHAS, respondents.
Gov't. Corp. Counsel Leopoldo M. Abellera, Trial Attorneys Manuel M. Lazaro and Vicente
Constantine, Jr., for petitioner.
Renato B. Kare and Simeon C. Sato for private respondents.
FERNANDO, J.:
The principal issue that calls for resolution in this appeal by certiorari from an order of
respondent Court of Industrial Relations is one of constitutional significance. It is concerned
with the expanded role of government necessitated by the increased responsibility to provide for
the general welfare. More specifically, it deals with the question of whether petitioner, the
Philippine Virginia Tobacco Administration, discharges governmental and not proprietary
functions. The landmark opinion of the then Justice, row Chief Justice, Makalintal in
Agricultural Credit and Cooperative Financing Administration v. Confederation of Unions in
Government Corporations and offices, points the way to the right answer. 1 It interpreted the then
fundamental law as hostile to the view of a limited or negative state. It is antithetical to the
laissez faire concept. For as noted in an earlier decision, the welfare state concept "is not alien to
the philosophy of [the 1935] Constitution." 2 It is much more so under the present Charter, which
is impressed with an even more explicit recognition of social and economic rights. 3 There is
manifest, to recall Laski, "a definite increase in the profundity of the social conscience,"
resulting in "a state which seeks to realize more fully the common good of its members." 4 It
does not necessarily follow, however, just because petitioner is engaged in governmental rather
than proprietary functions, that the labor controversy was beyond the jurisdiction of the now
defunct respondent Court. Nor is the objection raised that petitioner does not come within the
coverage of the Eight-Hour Labor Law persuasive. 5 We cannot then grant the reversal sought.
We affirm.
The facts are undisputed. On December 20, 1966, claimants, now private respondents, filed with
respondent Court a petition wherein they alleged their employment relationship, the overtime
services in excess of the regular eight hours a day rendered by them, and the failure to pay them
overtime compensation in accordance with Commonwealth Act No. 444. Their prayer was for
the differential between the amount actually paid to them and the amount allegedly due them. 6
There was an answer filed by petitioner Philippine Virginia Tobacco Administration denying the
allegations and raising the special defenses of lack of a cause of action and lack of jurisdiction. 7
The issues were thereafter joined, and the case set for trial, with both parties presenting their
evidence. 8 After the parties submitted the case for decision, the then Presiding Judge Arsenio T.
Martinez of respondent Court issued an order sustaining the claims of private respondents for
overtime services from December 23, 1963 up to the date the decision was rendered on March
21, 1970, and directing petitioner to pay the same, minus what it had already paid. 9 There was a
motion for reconsideration, but respondent Court en banc denied the same. 10 Hence this petition
for certiorari.
Petitioner Philippine Virginia Tobacco Administration, as had been noted, would predicate its
plea for the reversal of the order complained of on the basic proposition that it is beyond the
jurisdiction of respondent Court as it is exercising governmental functions and that it is exempt
from the operation of Commonwealth Act No. 444. 11 While, to repeat, its submission as to the
governmental character of its operation is to be given credence, it is not a necessary
consequence that respondent Court is devoid of jurisdiction. Nor could the challenged order be
set aside on the additional argument that the Eight-Hour Labor Law is not applicable to it. So it
was, at the outset, made clear.
1. A reference to the enactments creating petitioner corporation suffices to demonstrate the merit
of petitioner's plea that it performs governmental and not proprietary functions. As originally
established by Republic Act No. 2265, 12 its purposes and objectives were set forth thus: "(a) To
promote the effective merchandising of Virginia tobacco in the domestic and foreign markets so
that those engaged in the industry will be placed on a basis of economic security; (b) To
establish and maintain balanced production and consumption of Virginia tobacco and its
manufactured products, and such marketing conditions as will insure and stabilize the price of a
level sufficient to cover the cost of production plus reasonable profit both in the local as well as
in the foreign market; (c) To create, establish, maintain, and operate processing, warehousing
and marketing facilities in suitable centers and supervise the selling and buying of Virginia
tobacco so that the farmers will enjoy reasonable prices that secure a fair return of their
investments; (d) To prescribe rules and regulations governing the grading, classifying, and
inspecting of Virginia tobacco; and (e) To improve the living and economic conditions of the
people engaged in the tobacco industry." 13 The amendatory statute, Republic Act No. 4155, 14
renders even more evident its nature as a governmental agency. Its first section on the
declaration of policy reads: "It is declared to be the national policy, with respect to the local
Virginia tobacco industry, to encourage the production of local Virginia tobacco of the qualities
needed and in quantities marketable in both domestic and foreign markets, to establish this
industry on an efficient and economic basis, and, to create a climate conducive to local cigarette
manufacture of the qualities desired by the consuming public, blending imported and native
Virginia leaf tobacco to improve the quality of locally manufactured cigarettes." 15 The
objectives are set forth thus: "To attain this national policy the following objectives are hereby
adopted: 1. Financing; 2. Marketing; 3. The disposal of stocks of the Agricultural Credit
Administration (ACA) and the Philippine Virginia Tobacco Administration (PVTA) at the best
obtainable prices and conditions in order that a reinvigorated Virginia tobacco industry may be
established on a sound basis; and 4. Improving the quality of locally manufactured cigarettes
through blending of imported and native Virginia leaf tobacco; such importation with
corresponding exportation at a ratio of one kilo of imported to four kilos of exported Virginia
tobacco, purchased by the importer-exporter from the Philippine Virginia Tobacco
Administration." 16
It is thus readily apparent from a cursory perusal of such statutory provisions why petitioner can
rightfully invoke the doctrine announced in the leading Agricultural Credit and Cooperative
Financing Administration decision 17 and why the objection of private respondents with its
overtones of the distinction between constituent and ministrant functions of governments as set
forth in Bacani v. National Coconut Corporation 18 if futile. The irrelevance of such a distinction
considering the needs of the times was clearly pointed out by the present Chief Justice, who took
note, speaking of the reconstituted Agricultural Credit Administration, that functions of that sort
"may not be strictly what President Wilson described as "constituent" (as distinguished from
"ministrant"),such as those relating to the maintenance of peace and the prevention of crime,
those regulating property and property rights, those relating to the administration of justice and
the determination of political duties of citizens, and those relating to national defense and
foreign relations. Under this traditional classification, such constituent functions are exercised
by the State as attributes of sovereignty, and not merely to promote the welfare, progress and
prosperity of the people these latter functions being ministrant, the exercise of which is
optional on the part of the government." 19 Nonetheless, as he explained so persuasively: "The
growing complexities of modern society, however, have rendered this traditional classification of
the functions of government quite unrealistic, not to say obsolete. The areas which used to be
left to private enterprise and initiative and which the government was called upon to enter
optionally, and only "because it was better equipped to administer for the public welfare than is
any private individual or group of individuals", continue to lose their well-defined boundaries
and to be absorbed within activities that the government must undertake in its sovereign capacity
if it is to meet the increasing social challenges of the times. Here as almost everywhere else the
tendency is undoubtedly towards a greater socialization of economic forces. Here of course this
development was envisioned, indeed adopted as a national policy, by the Constitution itself in its
declaration of principle concerning the promotion of social justice." 20 Thus was laid to rest the
doctrine in Bacani v. National Coconut Corporation, 21 based on the Wilsonian classification of

the tasks incumbent on government into constituent and ministrant in accordance with the
laissez faire principle. That concept, then dominant in economics, was carried into the
governmental sphere, as noted in a textbook on political science, 22 the first edition of which was
published in 1898, its author being the then Professor, later American President, Woodrow
Wilson. He took pains to emphasize that what was categorized by him as constituent functions
had its basis in a recognition of what was demanded by the "strictest [concept of] laissez faire,
[as they] are indeed the very bonds of society." 23 The other functions he would minimize as
ministrant or optional.
It is a matter of law that in the Philippines, the laissez faire principle hardly commanded the
authoritative position which at one time it held in the United States. As early as 1919, Justice
Malcolm in Rubi v. Provincial Board 24 could affirm: "The doctrines of laissez faire and of
unrestricted freedom of the individual, as axioms of economic and political theory, are of the
past. The modern period has shown a widespread belief in the amplest possible demonstration of
government activity." 25 The 1935 Constitution, as was indicated earlier, continued that
approach. As noted in Edu v. Ericta: 26 "What is more, to erase any doubts, the Constitutional
Convention saw to it that the concept of laissez-faire was rejected. It entrusted to our
government the responsibility of coping with social and economic problems with the
commensurate power of control over economic affairs. Thereby it could live up to its
commitment to promote the general welfare through state action." 27 Nor did the opinion in Edu
stop there: "To repeat, our Constitution which took effect in 1935 erased whatever doubts there
might be on that score. Its philosophy is a repudiation of laissez-faire. One of the leading
members of the Constitutional Convention, Manuel A. Roxas, later the first President of the
Republic, made it clear when he disposed of the objection of Delegate Jose Reyes of Sorsogon,
who noted the "vast extensions in the sphere of governmental functions" and the "almost
unlimited power to interfere in the affairs of industry and agriculture as well as to compete with
existing business" as "reflections of the fascination exerted by [the then] current tendencies' in
other jurisdictions. He spoke thus: "My answer is that this constitution has a definite and well
defined philosophy, not only political but social and economic.... If in this Constitution the
gentlemen will find declarations of economic policy they are there because they are necessary to
safeguard the interest and welfare of the Filipino people because we believe that the days have
come when in self-defense, a nation may provide in its constitution those safeguards, the
patrimony, the freedom to grow, the freedom to develop national aspirations and national
interests, not to be hampered by the artificial boundaries which a constitutional provision
automatically imposes." 28
It would be then to reject what was so emphatically stressed in the Agricultural Credit
Administration decision about which the observation was earlier made that it reflected the
philosophy of the 1935 Constitution and is even more in consonance with the expanded role of
government accorded recognition in the present Charter if the plea of petitioner that it discharges
governmental function were not heeded. That path this Court is not prepared to take. That would
be to go backward, to retreat rather than to advance. Nothing can thus be clearer than that there
is no constitutional obstacle to a government pursuing lines of endeavor, formerly reserved for
private enterprise. This is one way, in the language of Laski, by which through such activities,
"the harsh contract which [does] obtain between the levels of the rich and the poor" may be
minimized. 29 It is a response to a trend noted by Justice Laurel in Calalang v. Williams 30 for the
humanization of laws and the promotion of the interest of all component elements of society so
that man's innate aspirations, in what was so felicitously termed by the First Lady as "a
compassionate society" be attained. 31
2. The success that attended the efforts of petitioner to be adjudged as performing governmental
rather than proprietary functions cannot militate against respondent Court assuming jurisdiction
over this labor dispute. So it was mentioned earlier. As far back as Tabora v. Montelibano, 32 this
Court, speaking through Justice Padilla, declared: The NARIC was established by the
Government to protect the people against excessive or unreasonable rise in the price of cereals
by unscrupulous dealers. With that main objective there is no reason why its function should not
be deemed governmental. The Government owes its very existence to that aim and purpose to
protect the people." 33 In a subsequent case, Naric Worker's Union v. Hon. Alvendia, 34 decided
four years later, this Court, relying on Philippine Association of Free Labor Unions v. Tan, 35
which specified the cases within the exclusive jurisdiction of the Court of Industrial Relations,
included among which is one that involves hours of employment under the Eight-Hour Labor
Law, ruled that it is precisely respondent Court and not ordinary courts that should pass upon
that particular labor controversy. For Justice J. B. L. Reyes, the ponente, the fact that there were
judicial as well as administrative and executive pronouncements to the effect that the Naric was
performing governmental functions did not suffice to confer competence on the then respondent
Judge to issue a preliminary injunction and to entertain a complaint for damages, which as
pointed out by the labor union, was connected with an unfair labor practice. This is emphasized
by the dispositive portion of the decision: "Wherefore, the restraining orders complained of,
dated May 19, 1958 and May 27, 1958, are set aside, and the complaint is ordered dismissed,
without prejudice to the National Rice and Corn Corporation's seeking whatever remedy it is
entitled to in the Court of Industrial Relations." 36 Then, too, in a case involving petitioner itself,
Philippine Virginia Tobacco Administration, 37 where the point in dispute was whether it was
respondent Court or a court of first instance that is possessed of competence in a declaratory
relief petition for the interpretation of a collective bargaining agreement, one that could readily
be thought of as pertaining to the judiciary, the answer was that "unless the law speaks clearly
and unequivocally, the choice should fall on the Court of Industrial Relations." 38 Reference to a
number of decisions which recognized in the then respondent Court the jurisdiction to determine
labor controversies by government-owned or controlled corporations lends to support to such an
approach. 39 Nor could it be explained only on the assumption that proprietary rather than
governmental functions did call for such a conclusion. It is to be admitted that such a view was
not previously bereft of plausibility. With the aforecited Agricultural Credit and Cooperative
Financing Administration decision rendering obsolete the Bacani doctrine, it has, to use a
Wilsonian phrase, now lapsed into "innocuous desuetude." 40 Respondent Court clearly was
vested with jurisdiction.
3. The contention of petitioner that the Eight-Hour Labor Law 41 does not apply to it hardly
deserves any extended consideration. There is an air of casualness in the way such an argument
was advanced in its petition for review as well as in its brief. In both pleadings, it devoted less
than a full page to its discussion. There is much to be said for brevity, but not in this case. Such a
terse and summary treatment appears to be a reflection more of the inherent weakness of the
plea rather than the possession of an advocate's enviable talent for concision. It did cite Section 2
of the Act, but its very language leaves no doubt that "it shall apply to all persons employed in
any industry or occupation, whether public or private ... ." 42 Nor are private respondents
included among the employees who are thereby barred from enjoying the statutory benefits. It
cited Marcelo v. Philippine National Red Cross 43 and Boy Scouts of the Philippines v. Araos. 44
Certainly, the activities to which the two above public corporations devote themselves can easily
be distinguished from that engaged in by petitioner. A reference to the pertinent sections of both
Republic Acts 2265 and 2155 on which it relies to obtain a ruling as to its governmental
character should render clear the differentiation that exists. If as a result of the appealed order,
financial burden would have to be borne by petitioner, it has only itself to blame. It need not
have required private respondents to render overtime service. It can hardly be surmised that one
of its chief problems is paucity of personnel. That would indeed be a cause for astonishment. It
would appear, therefore, that such an objection based on this ground certainly cannot suffice for
a reversal. To repeat, respondent Court must be sustained.
WHEREFORE, the appealed Order of March 21, 1970 and the Resolution of respondent Court
en banc of May 8, 1970 denying a motion for reconsideration are hereby affirmed. The last
sentence of the Order of March 21, 1970 reads as follows: "To find how much each of them
[private respondents] is entitled under this judgment, the Chief of the Examining Division, or
any of his authorized representative, is hereby directed to make a reexamination of records,
papers and documents in the possession of respondent PVTA pertinent and proper under the
premises and to submit his report of his findings to the Court for further disposition thereof."
Accordingly, as provided by the New Labor Code, this case is referred to the National Labor
Relations Commission for further proceedings conformably to law. No costs.
Makalintal, C.J., Castro, Barredo, Antonio, Esguerra, Aquino, Concepcion Jr. and Martin, JJ.,
concur. Makasiar, Muoz Palma, JJ., took no part. Teehankee J., is on leave.
G.R. No. L-9959 December 13, 1916

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, represented by the Treasurer of
the Philippine Islands, plaintiff-appellee,
vs.
EL MONTE DE PIEDAD Y CAJA DE AHORRAS DE MANILA, defendant-appellant.
William A. Kincaid and Thomas L. Hartigan for appellant.
Attorney-General Avancea for appellee.
TRENT, J.:
About $400,000, were subscribed and paid into the treasury of the Philippine Islands by the
inhabitants of the Spanish Dominions of the relief of those damaged by the earthquake which
took place in the Philippine Islands on June 3, 1863. Subsequent thereto and on October 6 of that
year, a central relief board was appointed, by authority of the King of Spain, to distribute the
moneys thus voluntarily contributed. After a thorough investigation and consideration, the relief
board allotted $365,703.50 to the various sufferers named in its resolution, dated September 22,
1866, and, by order of the Governor-General of the Philippine Islands, a list of these allotments,
together with the names of those entitled thereto, was published in the Official Gazette of Manila
dated April 7, 1870. There was later distributed, inaccordance with the above-mentioned
allotments, the sum of $30,299.65, leaving a balance of S365,403.85 for distribution. Upon the
petition of the governing body of the Monte de Piedad, dated February 1, 1833, the Philippine
Government, by order dated the 1st of that month, directed its treasurer to turn over to the Monte
de Piedad the sum of $80,000 of the relief fund in installments of $20,000 each. These amounts
were received on the following dates: February 15, March 12, April 14, and June 2, 1883, and
are still in the possession of the Monte de Piedad. On account of various petitions of the persons,
and heirs of others to whom the above-mentioned allotments were made by the central relief
board for the payment of those amounts, the Philippine Islands to bring suit against the Monte
de Piedad a recover, "through the Attorney-General and in representation of the Government of
the Philippine Islands," the $80.000, together with interest, for the benefit of those persons or
their heirs appearing in the list of names published in the Official Gazette instituted on May 3,
1912, by the Government of the Philippine Islands, represented by the Insular Treasurer, and
after due trial, judgment was entered in favor of the plaintiff for the sum of $80,000 gold or its
equivalent in Philippine currency, together with legal interest from February 28, 1912, and the
costs of the cause. The defendant appealed and makes the following assignment of errors:
1. The court erred in not finding that the eighty thousand dollars ($80,000), give to the
Monte de Piedad y Caja de Ahorros, were so given as a donation subject to one
condition, to wit: the return of such sum of money to the Spanish Government of these
Islands, within eight days following the day when claimed, in case the Supreme
Government of Spain should not approve the action taken by the former government.
2. The court erred in not having decreed that this donation had been cleared; said eighty
thousand dollars ($80,000) being at present the exclusive property of the appellant the
Monte de Piedad y Caja de Ahorros.
3. That the court erred in stating that the Government of the Philippine Islands has
subrogated the Spanish Government in its rights, as regards an important sum of money
resulting from a national subscription opened by reason of the earthquake of June 3,
1863, in these Island.
4. That the court erred in not declaring that Act Numbered 2109, passed by the Philippine
Legislature on January 30, 1912, is unconstitutional.
5. That the court erred in holding in its decision that there is no title for the prescription
of this suit brought by the Insular Government against the Monte de Piedad y Caja de
Ahorros for the reimbursement of the eighty thousand dollars ($80,000) given to it by the
late Spanish Government of these Islands.
6. That the court erred in sentencing the Monte de Piedad y Caja de Ahorros to
reimburse the Philippine Government in the sum of eighty thousand dollars ($80,000)
gold coin, or the equivalent thereof in the present legal tender currency in circulation,
with legal interest thereon from February 28th, 1912, and the costs of this suit.
In the royal order of June 29, 1879, the Governor-General of the Philippine Islands was directed
to inform the home Government in what manner the indemnity might be paid to which, by virtue
of the resolutions of the relief board, the persons who suffered damage by the earthquake might
be entitled, in order to perform the sacred obligation which the Government of Spain had
assumed toward the donors.
The next pertinent document in order is the defendant's petition, dated February 1, 1883,
addressed to the Governor-General of the Philippine Islands, which reads:
Board of Directors of the Monte de Piedad of Manila Presidencia.
Excellency: The Board of Directors of the Monte de Piedad y Caja de Ahorros of Manila
informs your Excellency, First: That the funds which it has up to the present been able to
dispose of have been exhausted in loans on jewelry, and there only remains the sum of
one thousand and odd pesos, which will be expended between to-day and day after
tomorrow. Second: That, to maintain the credit of the establishment, which would be
greatly injured were its operations suspended, it is necessary to procure money. Third:
That your Excellency has proposed to His Majesty's Government to apply to the funds of
the Monte de Piedad a part of the funds held in the treasury derived form the national
subscription for the relief of the distress caused by the earthquake of 1863. Fourth: That
in the public treasury there is held at the disposal of the central earthquake relief board
over $1090,000 which was deposited in the said treasury by order of your general
Government, it having been transferred thereto from the Spanish-Filipino Bank where it
had been held. fifth: That in the straightened circumstances of the moment, your
Excellency can, to avert impending disaster to the Monte de Piedad, order that, out of
that sum of one hundred thousand pesos held in the Treasury at the disposal of the central
relief board, there be transferred to the Monte de Piedad the sum of $80,000, there to be
held under the same conditions as at present in the Treasury, to wit, at the disposal of the
Relief Board. Sixth: That should this transfer not be approved for any reason, either
because of the failure of His Majesty's Government to approve the proposal made by
your Excellency relative to the application to the needs of the Monte de Piedad of a pat
of the subscription intended to believe the distress caused by the earthquake of 1863, or
for any other reason, the board of directors of the Monte de Piedad obligates itself to
return any sums which it may have received on account of the eighty thousand pesos, or
the whole thereof, should it have received the same, by securing a loan from whichever
bank or banks may lend it the money at the cheapest rate upon the security of pawned
jewelry. This is an urgent measure to save the Monte de Piedad in the present crisis
and the board of directors trusts to secure your Excellency's entire cooperation and that
of the other officials who have take part in the transaction.
The Governor-General's resolution on the foregoing petition is as follows:
GENERAL GOVERNMENT OF THE PHILIPPINES.
MANILA, February 1, 1883.
In view of the foregoing petition addressed to me by the board of directors of the Monte
de Piedad of this city, in which it is stated that the funds which the said institution
counted upon are nearly all invested in loans on jewelry and that the small account
remaining will scarcely suffice to cover the transactions of the next two days, for which
reason it entreats the general Government that, in pursuance of its telegraphic advice to
H. M. Government, the latter direct that there be turned over to said Monte de Piedad
$80,000 out of the funds in the public treasury obtained from the national subscription
for the relief of the distress caused by the earthquake of 1863, said board obligating itself
to return this sum should H. M. Government, for any reason, not approve the said
proposal, and for this purpose it will procure funds by means of loans raised on pawned
jewelry; it stated further that if the aid so solicited is not furnished, it will be compelled
to suspend operations, which would seriously injure the credit of so beneficient an
institution; and in view of the report upon the matter made by the Intendencia General de
Hacienda; and considering the fact that the public treasury has on hand a much greater
sum from the source mentioned than that solicited; and considering that this general
Government has submitted for the determination of H. M. Government that the balance
which, after strictly applying the proceeds obtained from the subscription referred to,
may remain as a surplus should be delivered to the Monte de Piedad, either as a
donation, or as a loan upon the security of the credit of the institution, believing that in so
doing the wishes of the donors would be faithfully interpreted inasmuch as those wishes
were no other than to relieve distress, an act of charity which is exercised in the highest
degree by the Monte de Piedad, for it liberates needy person from the pernicious effects
of usury; and
Considering that the lofty purposes that brought about the creation of the pious
institution referred to would be frustrated, and that the great and laudable work of its
establishment, and that the great and laudable and valuable if the aid it urgently seeks is
not granted, since the suspension of its operations would seriously and regrettably
damage the ever-growing credit of the Monte de Piedad; and
Considering that if such a thing would at any time cause deep distress in the public mind,
it might be said that at the present juncture it would assume the nature of a disturbance of
public order because of the extreme poverty of the poorer classes resulting from the late
calamities, and because it is the only institution which can mitigate the effects of such
poverty; and
Considering that no reasonable objection can be made to granting the request herein
contained, for the funds in question are sufficiently secured in the unlikely event that H>
M. Government does not approve the recommendation mentioned, this general
Government, in the exercise of the extraordinary powers conferred upon it and in
conformity with the report of the Intendencia de Hacienda, resolves as follows:
First. Authority is hereby given to deliver to the Monte de Piedad, out of the sum held in
the public treasury of these Islands obtained from the national subscription opened by
reason of the earthquakes of 1863, amounts up to the sum $80,000, as its needs may
require, in installments of $20,000.
Second. The board of directors of the Monte de Piedad is solemnly bound to return,
within eight days after demand, the sums it may have so received, if H. M. Government
does not approve this resolution.
Third. The Intendencia General de Hacienda shall forthwith, and in preference to all
other work, proceed to prepare the necessary papers so that with the least possible delay
the payment referred to may be made and the danger that menaces the Monte de Piedad
of having to suspend its operations may be averted.
H. M. Government shall be advised hereof.lawphi1.net
(Signed) P. DE RIVERA.
By the royal order of December 3, 1892, the Governor-General of the Philippine Islands was
ordered to "inform this ministerio what is the total sum available at the present time, taking into
consideration the sums delivered to the Monte de Piedad pursuant to the decree issued by your
general Government on February 1, 1883," and after the rights of the claimants, whose names
were published in the Official Gazette of Manila on April 7, 1870, and their heirs had been
established, as therein provided, as such persons "have an unquestionable right to be paid the
donations assigned to them therein, your general Government shall convoke them all within a
reasonable period and shall pay their shares to such as shall identify themselves, without regard
to their financial status," and finally "that when all the proceedings and operations herein
mentioned have been concluded and the Government can consider itself free from all kinds of
claims on the part of those interested in the distribution of the funds deposited in the vaults of
the Treasury, such action may be taken as the circumstances shall require, after first consulting
the relief board and your general Government and taking account of what sums have been
delivered to the Monte de Piedad and those that were expended in 1888 to relieve public
calamities," and "in order that all the points in connection with the proceedings had as a result of
the earthquake be clearly understood, it is indispensable that the offices hereinbefore mentioned
comply with the provisions contained in paragraphs 2 and 3 of the royal order of June 25, 1879."
On receipt of this Finance order by the Governor-General, the Department of Finance was called
upon for a report in reference to the $80,000 turned over to the defendant, and that Department's
report to the Governor-General dated June 28, 1893, reads:
Intendencia General de Hacienda de Filipinas (General Treasury of the Philippines)
Excellency. By Royal Order No. 1044 of December 3, last, it is provided that the
persons who sustained losses by the earthquakes that occurred in your capital in the year
1863 shall be paid the amounts allotted to them out of the sums sent from Spain for this
purpose, with observance of the rules specified in the said royal order, one of them being
that before making the payment to the interested parties the assets shall be reduced to
money. These assets, during the long period of time that has elapsed since they were
turned over to the Treasury of the Philippine Islands, were used to cover the general
needs of the appropriation, a part besides being invested in the relief of charitable
institutions and another part to meet pressing needs occasioned by public calamities. On
January 30, last, your Excellency was please to order the fulfillment of that sovereign
mandate and referred the same to this Intendencia for its information and the purposes
desired (that is, for compliance with its directions and, as aforesaid, one of these being
the liquidation, recovery, and deposit with the Treasury of the sums paid out of that fund
and which were expended in a different way from that intended by the donors) and this
Intendencia believed the moment had arrived to claim from the board of directors of the
Monte de Piedad y Caja de Ahorros the sum of 80,000 pesos which, by decree of your
general Government of the date of February 1, 1883, was loaned to it out of the said
funds, the (Monte de Piedad) obligating itself to return the same within the period of
eight days if H. M. Government did not approve the delivery. On this Intendencia's
demanding from the Monte de Piedad the eighty thousand pesos, thus complying with
the provisions of the Royal Order, it was to be supposed that no objection to its return
would be made by the Monte de Piedad for, when it received the loan, it formally
engaged itself to return it; and, besides, it was indisputable that the moment to do so had
arrived, inasmuch as H. M. Government, in ordering that the assets of the earthquake
relief fund should he collected, makes express mention of the 80,000 pesos loaned to the
Monte de Piedad, without doubt considering as sufficient the period of ten years during
which it has been using this large sum which lawfully belongs to their persons. This
Intendencia also supposed that the Monte de Piedad no longer needed the amount of that
loan, inasmuch as, far from investing it in beneficient transactions, it had turned the
whole amount into the voluntary deposit funds bearing 5 per cent interests, the result of
this operation being that the debtor loaned to the creditor on interest what the former had
gratuitously received. But the Monte de Piedad, instead of fulfilling the promise it made
on receiving the sum, after repeated demands refused to return the money on the ground
that only your Excellency, and not the Intendencia (Treasury), is entitled to order the
reimbursement, taking no account of the fact that this Intendencia was acting in the
discharge of a sovereign command, the fulfillment of which your Excellency was pleased
to order; and on the further ground that the sum of 80,000 pesos which it received from
the fund intended for the earthquake victims was not received as a loan, but as a
donation, this in the opinion of this Intendencia, erroneously interpreting both the last
royal order which directed the apportionment of the amount of the subscription raised in
the year 1863 and the superior decree which granted the loan, inasmuch as in this letter
no donation is made to the Monte de Piedad of the 80,000 pesos, but simply a loan;
besides, no donation whatever could be made of funds derived from a private
subscription raised for a specific purpose, which funds are already distributed and the
names of the beneficiaries have been published in the Gaceta, there being lacking only
the mere material act of the delivery, which has been unduly delayed. In view of the
unexpected reply made by the Monte de Piedad, and believing it useless to insist further
in the matter of the claim for the aforementioned loan, or to argue in support thereof, this
Intendencia believes the intervention of your Excellency necessary in this matter, if the
royal Order No. 1044 of December 3, last, is to be complied with, and for this purpose I
beg your Excellency kindly to order the Monte de Piedad to reimburse within the period
of eight days the 80,000 which it owes, and that you give this Intendencia power to carry
out the provisions of the said royal order. I must call to the attention of your Excellency
that the said pious establishment, during the last few days and after demand was made
upon it, has endorsed to the Spanish-Filipino Bank nearly the whole of the sum which it
had on deposit in the general deposit funds.
The record in the case under consideration fails to disclose any further definite action taken by
either the Philippine Government or the Spanish Government in regard to the $80,000 turned
over to the Monte de Piedad.
In the defendant's general ledger the following entries appear: "Public Treasury: February 15,
1883, $20,000; March 12, 1883, $20,000; April 14, 1883, $20,000; June 2, 1883, $20,000, total
$80,000." The book entry for this total is as follows: "To the public Treasury derived from the
subscription for the earthquake of 1863, $80,000 received from general Treasury as a returnable
loan, and without interest." The account was carried in this manner until January 1, 1899, when
it was closed by transferring the amount to an account called "Sagrada Mitra," which latter
account was a loan of $15,000 made to the defendant by the Archbishop of Manila, without
interest, thereby placing the "Sagrada Mitra" account at $95,000 instead of $15,000. The abovementioned journal entry for January 1, 1899, reads: "Sagrada Mitra and subscription, balance of
these two account which on this date are united in accordance with an order of the Exmo. Sr.
Presidente of the Council transmitted verbally to the Presidente Gerente of these institutions,
$95,000."
On March 16, 1902, the Philippine government called upon the defendant for information
concerning the status of the $80,000 and received the following reply:
MANILA, March 31, 1902.
To the Attorney-General of the Department of Justice of the Philippine Islands.
SIR: In reply to your courteous letter of the 16th inst., in which you request information
from this office as to when and for what purpose the Spanish Government delivered to
the Monte de Piedad eighty thousand pesos obtained from the subscription opened in
connection with the earthquake of 1863, as well as any other information that might be
useful for the report which your office is called upon to furnish, I must state to your
department that the books kept in these Pious Institutions, and which have been
consulted for the purpose, show that on the 15th of February, 1883, they received as a
reimbursable loan and without interest, twenty thousand pesos, which they deposited
with their own funds. On the same account and on each of the dates of March 12, April
14 and June 2 of the said year, 1883, they also received and turned into their funds a like
sum of twenty thousand pesos, making a total of eighty thousand pesos. (Signed)
Emilio Moreta.
I hereby certify that the foregoing is a literal copy of that found in the letter book No. 2
of those Pious Institutions.
Manila, November 19, 1913
(Sgd.) EMILIO LAZCANOTEGUI,
Secretary
(Sgd.) O. K. EMILIO MORETA,
Managing Director.
The foregoing documentary evidence shows the nature of the transactions which took place
between the Government of Spain and the Philippine Government on the one side and the Monte
de Piedad on the other, concerning the $80,000. The Monte de Piedad, after setting forth in its
petition to the Governor-General its financial condition and its absolute necessity for more
working capital, asked that out of the sum of $100,000 held in the Treasury of the Philippine
Islands, at the disposal of the central relief board, there be transferred to it the sum of $80,000 to
be held under the same conditions, to wit, "at the disposal of the relief board." The Monte de
Piedad agreed that if the transfer of these funds should not be approved by the Government of
Spain, the same would be returned forthwith. It did not ask that the $80,000 be given to it as a
donation. The Governor-General, after reciting the substance of the petition, stated that "this
general Government has submitted for the determination of H. M. Government that the balance
which, after strictly applying the proceeds obtained from the subscription referred to, may
remain as a surplus, should be delivered to the Monte de Piedad, either as a donation, or as a
loan upon the security of the credit of the institution," and "considering that no reasonable
objection can be made to granting the request herein contained," directed the transfer of the
$80,000 to be made with the understanding that "the Board of Directors of the Monte de Piedad
is solemnly bound to return, within eight days after demand, the sums it may have so received, if
H. M. Government does not approve this resolution." It will be noted that the first and only time
the word "donation" was used in connection with the $80,000 appears in this resolution of the
Governor-General. It may be inferred from the royal orders that the Madrid Government did
tacitly approve of the transfer of the $80,000 to the Monte de Piedad as a loan without interest,
but that Government certainly did not approve such transfer as a donation for the reason that the
Governor-General was directed by the royal order of December 3, 1892, to inform the Madrid
Government of the total available sum of the earthquake fund, "taking into consideration the
sums delivered to the Monte de Piedad pursuant to the decree issued by your general
Government on February 1, 1883." This language, nothing else appearing, might admit of the
interpretation that the Madrid Government did not intend that the Governor-General of the
Philippine Islands should include the $80,000 in the total available sum, but when considered in
connection with the report of the Department of Finance there can be no doubt that it was so
intended. That report refers expressly to the royal order of December 3d, and sets forth in detail
the action taken in order to secure the return of the $80,000. The Department of Finance, acting
under the orders of the Governor-General, understood that the $80,000 was transferred to the
Monte de Piedad well knew that it received this sum as a loan interest." The amount was thus
carried in its books until January, 1899, when it was transferred to the account of the "Sagrada
Mitra" and was thereafter known as the "Sagrada Mitra and subscription account." Furthermore,
the Monte de Piedad recognized and considered as late as March 31, 1902, that it received the
$80,000 "as a returnable loan, and without interest." Therefore, there cannot be the slightest
doubt the fact that the Monte de Piedad received the $80,000 as a mere loan or deposit and not
as a donation. Consequently, the first alleged error is entirely without foundation.
Counsel for the defendant, in support of their third assignment of error, say in their principal
brief that:
The Spanish nation was professedly Roman Catholic and its King enjoyed the distinction
of being deputy ex officio of the Holy See and Apostolic Vicar-General of the Indies, and
as such it was his duty to protect all pious works and charitable institutions in his
kingdoms, especially those of the Indies; among the latter was the Monte de Piedad of
the Philippines, of which said King and his deputy the Governor-General of the
Philippines, as royal vice-patron, were, in a special and peculiar manner, the protectors;
the latter, as a result of the cession of the Philippine Islands, Implicitly renounced this
high office and tacitly returned it to the Holy See, now represented by the Archbishop of
Manila; the national subscription in question was a kind of foundation or pious work, for
a charitable purpose in these Islands; and the entire subscription not being needed for its
original purpose, the royal vice-patron, with the consent of the King, gave the surplus
thereof to an analogous purpose; the fulfillment of all these things involved, in the
majority, if not in all cases, faithful compliance with the duty imposed upon him by the
Holy See, when it conferred upon him the royal patronage of the Indies, a thing that
touched him very closely in his conscience and religion; the cessionary Government
though Christian, was not Roman Catholic and prided itself on its policy of noninterference in religious matters, and inveterately maintained a complete separation
between the ecclesiastical and civil powers.
In view of these circumstances it must be quite clear that, even without the express
provisions of the Treaty of Paris, which apparently expressly exclude such an idea, it did
not befit the honor of either of the contracting parties to subrogate to the American
Government in lieu of the Spanish Government anything respecting the disposition of the
funds delivered by the latter to the Monte de Piedad. The same reasons that induced the
Spanish Government to take over such things would result in great inconvenience to the
American Government in attempting to do so. The question was such a delicate one, for
the reason that it affected the conscience, deeply religious, of the King of Spain, that it
cannot be believed that it was ever his intention to confide the exercise thereof to a
Government like the American. (U. S. vs. Arredondo, 6 Pet. [U. S.], 711.)
It is thus seen that the American Government did not subrogate the Spanish Government
or rather, the King of Spain, in this regard; and as the condition annexed to the donation
was lawful and possible of fulfillment at the time the contract was made, but became
impossible of fulfillment by the cession made by the Spanish Government in these
Islands, compliance therewith is excused and the contract has been cleared thereof.
The contention of counsel, as thus stated, in untenable for two reason, (1) because such
contention is based upon the erroneous theory that the sum in question was a donation to the
Monte de Piedad and not a loan, and (2) because the charity founded by the donations for the
earthquake sufferers is not and never was intended to be an ecclesiastical pious work. The first
proposition has already been decided adversely to the defendant's contention. As to the second,
the record shows clearly that the fund was given by the donors for a specific and definite
purpose the relief of the earthquake sufferers and for no other purpose. The money was
turned over to the Spanish Government to be devoted to that purpose. The Spanish Government
remitted the money to the Philippine Government to be distributed among the suffers. All
officials, including the King of Spain and the Governor-General of the Philippine Islands, who
took part in the disposal of the fund, acted in their purely civil, official capacity, and the fact that
they might have belonged to a certain church had nothing to do with their acts in this matter. The
church, as such, had nothing to do with the fund in any way whatever until the $80,000 reached
the coffers of the Monte de Piedad (an institution under the control of the church) as a loan or
deposit. If the charity in question had been founded as an ecclesiastical pious work, the King of
Spain and the Governor-General, in their capacities as vicar-general of the Indies and as royal
vice-patron, respectively, would have disposed of the fund as such and not in their civil
capacities, and such functions could not have been transferred to the present Philippine
Government, because the right to so act would have arisen out of the special agreement between
the Government of Spain and the Holy See, based on the union of the church and state which
was completely separated with the change of sovereignty.
And in their supplemental brief counsel say:
By the conceded facts the money in question is part of a charitable subscription. The
donors were persons in Spain, the trustee was the Spanish Government, the donees, the
cestuis que trustent, were certain persons in the Philippine Islands. The whole matter is
one of trusteeship. This is undisputed and indisputable. It follows that the Spanish
Government at no time was the owner of the fund. Not being the owner of the fund it
could not transfer the ownership. Whether or not it could transfer its trusteeship it
certainly never has expressly done so and the general terms of property transfer in the
Treaty of Paris are wholly insufficient for such a purpose even could Spain have
transferred its trusteeship without the consent of the donors and even could the United
States, as a Government, have accepted such a trust under any power granted to it by the
thirteen original States in the Constitution, which is more than doubtful. It follows
further that this Government is not a proper party to the action. The only persons who
could claim to be damaged by this payment to the Monte, if it was unlawful, are the
donors or the cestuis que trustent, and this Government is neither.
If "the whole matter is one of trusteeship," and it being true that the Spanish Government could
not, as counsel say, transfer the ownership of the fund to the Monte de Piedad, the question
arises, who may sue to recover this loan? It needs no argument to show that the Spanish or
Philippine Government, as trustee, could maintain an action for this purpose had there been no
change of sovereignty and if the right of action has not prescribed. But those governments were
something more than mere common law trustees of the fund. In order to determine their exact
status with reference to this fund, it is necessary to examine the law in force at the time there
transactions took place, which are the law of June 20, 1894, the royal decree of April 27. 1875,
and the instructions promulgated on the latter date. These legal provisions were applicable to the
Philippine Islands (Benedicto vs. De la Rama, 3 Phil. Rep., 34)
The funds collected as a result of the national subscription opened in Spain by royal order of the
Spanish Government and which were remitted to the Philippine Government to be distributed
among the earthquake sufferers by the Central Relief Board constituted, under article 1 of the
law of June 20, 1894, and article 2 of the instructions of April 27, 1875, a special charity of a
temporary nature as distinguished from a permanent public charitable institution. As the Spanish
Government initiated the creation of the fund and as the donors turned their contributions over to
that Government, it became the duty of the latter, under article 7 of the instructions, to exercise
supervision and control over the moneys thus collected to the end that the will of the donors
should be carried out. The relief board had no power whatever to dispose of the funds confided
to its charge for other purposes than to distribute them among the sufferers, because paragraph 3
of article 11 of the instructions conferred the power upon the secretary of the interior of Spain,
and no other, to dispose of the surplus funds, should there be any, by assigning them to some
other charitable purpose or institution. The secretary could not dispose of any of the funds in this
manner so long as they were necessary for the specific purpose for which they were contributed.
The secretary had the power, under the law above mentioned to appoint and totally or partially
change the personnel of the relief board and to authorize the board to defend the rights of the
charity in the courts. The authority of the board consisted only in carrying out the will of the
donors as directed by the Government whose duty it was to watch over the acts of the board and
to see that the funds were applied to the purposes for which they were contributed .The secretary
of the interior, as the representative of His Majesty's Government, exercised these powers and
duties through the Governor-General of the Philippine Islands. The Governments of Spain and
of the Philippine Islands in complying with their duties conferred upon them by law, acted in
their governmental capacities in attempting to carry out the intention of the contributors. It will
this be seen that those governments were something more, as we have said, than mere trustees of
the fund.
It is further contended that the obligation on the part of the Monte de Piedad to return the
$80,000 to the Government, even considering it a loan, was wiped out on the change of
sovereignty, or inn other words, the present Philippine Government cannot maintain this action
for that reason. This contention, if true, "must result from settled principles of rigid law," as it
cannot rest upon any title to the fund in the Monte de Piedad acquired prior to such change.
While the obligation to return the $80,000 to the Spanish Government was still pending, war
between the United States and Spain ensued. Under the Treaty of Paris of December 10, 1898,
the Archipelago, known as the Philippine Islands, was ceded to the United States, the latter
agreeing to pay Spain the sum of $20,000,000. Under the first paragraph of the eighth article,
Spain relinquished to the United States "all buildings, wharves, barracks, forts, structures, public
highways, and other immovable property which, in conformity with law, belonged to the public
domain, and as such belonged to the crown of Spain." As the $80,000 were not included therein,
it is said that the right to recover this amount did not, therefore, pass to the present sovereign.
This, in our opinion, does not follow as a necessary consequence, as the right to recover does not
rest upon the proposition that the $80,000 must be "other immovable property" mentioned in
article 8 of the treaty, but upon contractual obligations incurred before the Philippine Islands
were ceded to the United States. We will not inquire what effect his cession had upon the law of
June 20, 1849, the royal decree of April 27, 1875, and the instructions promulgated on the latter
date. In Vilas vs. Manila (220 U. S., 345), the court said:
That there is a total abrogation of the former political relations of the inhabitants of the
ceded region is obvious. That all laws theretofore in force which are in conflict with the
political character, constitution, or institutions of the substituted sovereign, lose their
force, is also plain. (Alvarez y Sanchez vs. United States, 216 U. S., 167.) But it is
equally settled in the same public law that the great body of municipal law which
regulates private and domestic rights continues in force until abrogated or changed by the
new ruler.
If the above-mentioned legal provisions are in conflict with the political character, constitution
or institutions of the new sovereign, they became inoperative or lost their force upon the cession
of the Philippine Islands to the United States, but if they are among "that great body of
municipal law which regulates private and domestic rights," they continued in force and are still
in force unless they have been repealed by the present Government. That they fall within the
latter class is clear from their very nature and character. They are laws which are not political in
any sense of the word. They conferred upon the Spanish Government the right and duty to
supervise, regulate, and to some extent control charities and charitable institutions. The present
sovereign, in exempting "provident institutions, savings banks, etc.," all of which are in the
nature of charitable institutions, from taxation, placed such institutions, in so far as the
investment in securities are concerned, under the general supervision of the Insular Treasurer
(paragraph 4 of section 111 of Act No. 1189; see also Act No. 701).
Furthermore, upon the cession of the Philippine Islands the prerogatives of he crown of Spain
devolved upon he United States. In Magill vs. Brown (16 Fed. Cas., 408), quoted with approval
in Mormon Charch vs. United States (136 U. S.,1, 57), the court said:
The Revolution devolved on the State all the transcendent power of Parliament, and the
prerogative of the crown, and gave their Acts the same force and effect.
In Fontain vs. Ravenel (17 Hw., 369, 384), Mr. Justice McLean, delivering the opinion of the
court in a charity case, said:
When this country achieved its independence, the prerogatives of the crown devolved
upon the people of the States. And this power still remains with them except so fact as
they have delegated a portion of it to the Federal Government. The sovereign will is
made known to us by legislative enactment. The State as a sovereign, is the parens
patriae.
Chancelor Kent says:
In this country, the legislature or government of the State, as parens patriae, has the right
to enforce all charities of public nature, by virtue of its general superintending authority
over the public interests, where no other person is entrusted with it. (4 Kent Com., 508,
note.)
The Supreme Court of the United States in Mormon Church vs. United States, supra, after
approving also the last quotations, said:
This prerogative of parens patriae is inherent in the supreme power of every State,
whether that power is lodged in a royal person or in the legislature, and has no affinity to
those arbitrary powers which are sometimes exerted by irresponsible monarchs to the
great detriment of the people and the destruction of their liberties. On the contrary, it is a
most beneficient functions, and often necessary to be exercised in the interest of
humanity, and for the prevention of injury to those who cannot protect themselves.
The court in the same case, after quoting from Sohier vs. Mass. General Hospital (3 Cush., 483,
497), wherein the latter court held that it is deemed indispensible that there should be a power in
the legislature to authorize the same of the estates of in facts, idiots, insane persons, and persons
not known, or not in being, who cannot act for themselves, said:
These remarks in reference to in facts, insane persons and person not known, or not in
being, apply to the beneficiaries of charities, who are often in capable of vindicating their
rights, and justly look for protection to the sovereign authority, acting as parens patriae.
They show that this beneficient functions has not ceased t exist under the change of
government from a monarchy to a republic; but that it now resides in the legislative
department, ready to be called into exercise whenever required for the purposes of justice
and right, and is a clearly capable of being exercised in cases of charities as in any other
cases whatever.
In People vs. Cogswell (113 Cal. 129, 130), it was urged that the plaintiff was not the real party
in interest; that the Attorney-General had no power to institute the action; and that there must be
an allegation and proof of a distinct right of the people as a whole, as distinguished from the
rights of individuals, before an action could be brought by the Attorney-General in the name of
the people. The court, in overruling these contentions, held that it was not only the right but the
duty of the Attorney-General to prosecute the action, which related to charities, and approved
the following quotation from Attorney-General vs. Compton (1 Younge & C. C., 417):
Where property affected by a trust for public purposes is in the hands of those who hold
it devoted to that trust, it is the privilege of the public that the crown should be entitled to
intervene by its officers for the purpose of asserting, on behalf on the public generally,
the public interest and the public right, which, probably, no individual could be found
effectually to assert, even if the interest were such as to allow it. (2 Knet's
Commentaries, 10th ed., 359; Lewin on Trusts, sec. 732.)
It is further urged, as above indicated, that "the only persons who could claim to be damaged by
this payment to the Monte, if it was unlawful, are the donors or the cestuis que trustent, and this
Government is neither. Consequently, the plaintiff is not the proper party to bring the action."
The earthquake fund was the result or the accumulation of a great number of small
contributions. The names of the contributors do not appear in the record. Their whereabouts are
unknown. They parted with the title to their respective contributions. The beneficiaries,
consisting of the original sufferers and their heirs, could have been ascertained. They are quite
numerous also. And no doubt a large number of the original sufferers have died, leaving various
heirs. It would be impracticable for them to institute an action or actions either individually or
collectively to recover the $80,000. The only course that can be satisfactorily pursued is for the
Government to again assume control of the fund and devote it to the object for which it was
originally destined.
The impracticability of pursuing a different course, however, is not the true ground upon which
the right of the Government to maintain the action rests. The true ground is that the money being
given to a charity became, in a measure, public property, only applicable, it is true, to the
specific purposes to which it was intended to be devoted, but within those limits consecrated to
the public use, and became part of the public resources for promoting the happiness and welfare
of the Philippine Government. (Mormon Church vs. U. S., supra.) To deny the Government's
right to maintain this action would be contrary to sound public policy, as tending to discourage
the prompt exercise of similar acts of humanity and Christian benevolence in like instances in
the future.
As to the question raised in the fourth assignment of error relating to the constitutionality of Act
No. 2109, little need be said for the reason that we have just held that the present Philippine
Government is the proper party to the action. The Act is only a manifestation on the part of the
Philippine Government to exercise the power or right which it undoubtedly had. The Act is not,
as contended by counsel, in conflict with the fifth section of the Act of Congress of July 1, 1902,
because it does not take property without due process of law. In fact, the defendant is not the
owner of the $80,000, but holds it as a loan subject to the disposal of the central relief board.
Therefor, there can be nothing in the Act which transcends the power of the Philippine
Legislature.
In Vilas vs. Manila, supra, the plaintiff was a creditor of the city of Manila as it existed before
the cession of the Philippine Islands to the United States by the Treaty of Paris of December 10,
1898. The action was brought upon the theory that the city, under its present charter from the
Government of the Philippine Islands, was the same juristic person, and liable upon the
obligations of the old city. This court held that the present municipality is a totally different
corporate entity and in no way liable for the debts of the Spanish municipality. The Supreme
Court of the United States, in reversing this judgment and in holding the city liable for the old
debt, said:
The juristic identity of the corporation has been in no wise affected, and, in law, the
present city is, in every legal sense, the successor of the old. As such it is entitled to the
property and property rights of the predecessor corporation, and is, in law, subject to all
of its liabilities.
In support of the fifth assignment of error counsel for the defendant argue that as the Monte de
Piedad declined to return the $80,000 when ordered to do so by the Department of Finance in
June, 1893, the plaintiff's right of action had prescribed at the time this suit was instituted on
May 3, 1912, citing and relying upon article 1961, 1964 and 1969 of the Civil Code. While on
the other hand, the Attorney-General contends that the right of action had not prescribed (a)
because the defense of prescription cannot be set up against the Philippine Government, (b)
because the right of action to recover a deposit or trust funds does not prescribe, and (c) even if
the defense of prescription could be interposed against the Government and if the action had, in
fact, prescribed, the same was revived by Act No. 2109.
The material facts relating to this question are these: The Monte de Piedad received the $80,000
in 1883 "to be held under the same conditions as at present in the treasury, to wit, at the disposal
of the relief board." In compliance with the provisions of the royal order of December 3, 1892,
the Department of Finance called upon the Monte de Piedad in June, 1893, to return the
$80,000. The Monte declined to comply with this order upon the ground that only the GovernorGeneral of the Philippine Islands and not the Department of Finance had the right to order the
reimbursement. The amount was carried on the books of the Monte as a returnable loan until
January 1, 1899, when it was transferred to the account of the "Sagrada Mitra." On March 31,
1902, the Monte, through its legal representative, stated in writing that the amount in question
was received as a reimbursable loan, without interest. Act No. 2109 became effective January
30, 1912, and the action was instituted on May 3rd of that year.
Counsel for the defendant treat the question of prescription as if the action was one between
individuals or corporations wherein the plaintiff is seeking to recover an ordinary loan. Upon
this theory June, 1893, cannot be taken as the date when the statute of limitations began to run,
for the reason that the defendant acknowledged in writing on March 31, 1902, that the $80,000
were received as a loan, thereby in effect admitting that it still owed the amount. (Section 50,
Code of Civil Procedure.) But if counsels' theory is the correct one the action may have
prescribed on May 3, 1912, because more than ten full years had elapsed after March 31, 1902.
(Sections 38 and 43, Code of Civil Procedure.)
Is the Philippine Government bound by the statute of limitations? The Supreme Court of the
United States in U. S. vs. Nashville, Chattanooga & St. Louis Railway Co. (118 U. S., 120, 125),
said:
It is settled beyond doubt or controversy upon the foundation of the great principle of
public policy, applicable to all governments alike, which forbids that the public interests
should be prejudiced by the negligence of the officers or agents to whose care they are
confided that the United States, asserting rights vested in it as a sovereign
government, is not bound by any statute of limitations, unless Congress has clearly
manifested its intention that it should be so bound. (Lindsey vs. Miller, 6 Pet. 666; U. S.
vs. Knight, 14 Pet., 301; Gibson vs. Chouteau, 13 Wall., 92; U. S. vs. Thompson, 98 U.
S., 486; Fink vs. O'Neil, 106 U. S., 272, 281.)
In Gibson vs. Choteau, supra, the court said:
It is a matter of common knowledge that statutes of limitation do not run against the
State. That no laches can be imputed to the King, and that no time can bar his rights, was
the maxim of the common laws, and was founded on the principle of public policy, that
as he was occupied with the cares of government he ought not to suffer from the
negligence of his officer and servants. The principle is applicable to all governments,
which must necessarily act through numerous agents, and is essential to a preservation of
the interests and property of the public. It is upon this principle that in this country the
statutes of a State prescribing periods within which rights must be prosecuted are not
held to embrace the State itself, unless it is expressly designated or the mischiefs to be
remedied are of such a nature that it must necessarily be included. As legislation of a
State can only apply to persons and thing over which the State has jurisdiction, the
United States are also necessarily excluded from the operation of such statutes.
In 25 Cyc., 1006, the rule, supported by numerous authorities, is stated as follows:
In the absence of express statutory provision to the contrary, statute of limitations do not
as a general rule run against the sovereign or government, whether state or federal. But
the rule is otherwise where the mischiefs to be remedied are of such a nature that the
state must necessarily be included, where the state goes into business in concert or in
competition with her citizens, or where a party seeks to enforces his private rights by suit
in the name of the state or government, so that the latter is only a nominal party.
In the instant case the Philippine Government is not a mere nominal party because it, in bringing
and prosecuting this action, is exercising its sovereign functions or powers and is seeking to
carry out a trust developed upon it when the Philippine Islands were ceded to the United States.
The United States having in 1852, purchased as trustee for the Chickasaw Indians under treaty
with that tribe, certain bonds of the State of Tennessee, the right of action of the Government on
the coupons of such bonds could not be barred by the statute of limitations of Tennessee, either
while it held them in trust for the Indians, or since it became the owner of such coupons. (U. S.
vs. Nashville, etc., R. Co., supra.) So where lands are held in trust by the state and the
beneficiaries have no right to sue, a statute does not run against the State's right of action for
trespass on the trust lands. (Greene Tp. vs. Campbell, 16 Ohio St., 11; see also Atty.-Gen. vs.
Midland R. Co., 3 Ont., 511 [following Reg. vs. Williams, 39 U. C. Q. B., 397].)
These principles being based "upon the foundation of the great principle of public policy" are, in
the very nature of things, applicable to the Philippine Government.
Counsel in their argument in support of the sixth and last assignments of error do not question
the amount of the judgment nor do they question the correctness of the judgment in so far as it
allows interest, and directs its payment in gold coin or in the equivalent in Philippine currency.
For the foregoing reasons the judgment appealed from is affirmed, with costs against the
appellant. So ordered.
Torres, Johnson and Araullo, JJ., concur. Moreland, J., did not sign.
G.R. No. L-5
September 17, 1945
CO KIM CHAM (alias CO KIM CHAM), petitioner,

vs.
EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON, Judge of First Instance of
Manila, respondents.1
Marcelino Lontok for petitioner.
P. A. Revilla for respondent Valdez Tan Keh.
Respondent Judge Dizon in his own behalf.
FERIA, J.:
This petition for mandamus in which petitioner prays that the respondent judge of the lower
court be ordered to continue the proceedings in civil case No. 3012 of said court, which were
initiated under the regime of the so-called Republic of the Philippines established during the
Japanese military occupation of these Islands.
The respondent judge refused to take cognizance of and continue the proceedings in said case on
the ground that the proclamation issued on October 23, 1944, by General Douglas MacArthur
had the effect of invalidating and nullifying all judicial proceedings and judgements of the court
of the Philippines under the Philippine Executive Commission and the Republic of the
Philippines established during the Japanese military occupation, and that, furthermore, the lower
courts have no jurisdiction to take cognizance of and continue judicial proceedings pending in
the courts of the defunct Republic of the Philippines in the absence of an enabling law granting
such authority. And the same respondent, in his answer and memorandum filed in this Court,
contends that the government established in the Philippines during the Japanese occupation were
no de facto governments.
On January 2, 1942, the Imperial Japanese Forces occupied the City of Manila, and on the next
day their Commander in Chief proclaimed "the Military Administration under law over the
districts occupied by the Army." In said proclamation, it was also provided that "so far as the
Military Administration permits, all the laws now in force in the Commonwealth, as well as
executive and judicial institutions, shall continue to be effective for the time being as in the
past," and "all public officials shall remain in their present posts and carry on faithfully their
duties as before."
A civil government or central administration organization under the name of "Philippine
Executive Commission was organized by Order No. 1 issued on January 23, 1942, by the
Commander in Chief of the Japanese Forces in the Philippines, and Jorge B. Vargas, who was
appointed Chairman thereof, was instructed to proceed to the immediate coordination of the
existing central administrative organs and judicial courts, based upon what had existed therefore,
with approval of the said Commander in Chief, who was to exercise jurisdiction over judicial
courts.
The Chairman of the Executive Commission, as head of the central administrative organization,
issued Executive Orders Nos. 1 and 4, dated January 30 and February 5, 1942, respectively, in
which the Supreme Court, Court of Appeals, Courts of First Instance, and the justices of the
peace and municipal courts under the Commonwealth were continued with the same jurisdiction,
in conformity with the instructions given to the said Chairman of the Executive Commission by
the Commander in Chief of Japanese Forces in the Philippines in the latter's Order No. 3 of
February 20, 1942, concerning basic principles to be observed by the Philippine Executive
Commission in exercising legislative, executive and judicial powers. Section 1 of said Order
provided that "activities of the administration organs and judicial courts in the Philippines shall
be based upon the existing statutes, orders, ordinances and customs. . . ."
On October 14, 1943, the so-called Republic of the Philippines was inaugurated, but no
substantial change was effected thereby in the organization and jurisdiction of the different
courts that functioned during the Philippine Executive Commission, and in the laws they
administered and enforced.
On October 23, 1944, a few days after the historic landing in Leyte, General Douglas MacArthur
issued a proclamation to the People of the Philippines which declared:
1. That the Government of the Commonwealth of the Philippines is, subject to the
supreme authority of the Government of the United States, the sole and only government
having legal and valid jurisdiction over the people in areas of the Philippines free of
enemy occupation and control;
2. That the laws now existing on the statute books of the Commonwealth of the
Philippines and the regulations promulgated pursuant thereto are in full force and effect
and legally binding upon the people in areas of the Philippines free of enemy occupation
and control; and
3. That all laws, regulations and processes of any other government in the Philippines
than that of the said Commonwealth are null and void and without legal effect in areas of
the Philippines free of enemy occupation and control.
On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945,
General MacArthur, on behalf of the Government of the United States, solemnly declared "the
full powers and responsibilities under the Constitution restored to the Commonwealth whose
seat is here established as provided by law."
In the light of these facts and events of contemporary history, the principal questions to be
resolved in the present case may be reduced to the following:(1) Whether the judicial acts and
proceedings of the court existing in the Philippines under the Philippine Executive Commission
and the Republic of the Philippines were good and valid and remained so even after the
liberation or reoccupation of the Philippines by the United States and Filipino forces;
(2)Whether the proclamation issued on October 23, 1944, by General Douglas MacArthur,
Commander in Chief of the United States Army, in which he declared "that all laws, regulations
and processes of any of the government in the Philippines than that of the said Commonwealth
are null and void and without legal effect in areas of the Philippines free of enemy occupation
and control," has invalidated all judgements and judicial acts and proceedings of the said courts;
and (3) If the said judicial acts and proceedings have not been invalidated by said proclamation,
whether the present courts of the Commonwealth, which were the same court existing prior to,
and continued during, the Japanese military occupation of the Philippines, may continue those
proceedings pending in said courts at the time the Philippines were reoccupied and liberated by
the United States and Filipino forces, and the Commonwealth of the Philippines were
reestablished in the Islands.
We shall now proceed to consider the first question, that is, whether or not under the rules of
international law the judicial acts and proceedings of the courts established in the Philippines
under the Philippine Executive Commission and the Republic of the Philippines were good and
valid and remained good and valid even after the liberation or reoccupation of the Philippines by
the United States and Filipino forces.
1. It is a legal truism in political and international law that all acts and proceedings of the
legislative, executive, and judicial departments of a de facto government are good and valid. The
question to be determined is whether or not the governments established in these Islands under
the names of the Philippine Executive Commission and Republic of the Philippines during the
Japanese military occupation or regime were de facto governments. If they were, the judicial
acts and proceedings of those governments remain good and valid even after the liberation or
reoccupation of the Philippines by the American and Filipino forces.
There are several kinds of de facto governments. The first, or government de facto in a proper
legal sense, is that government that gets possession and control of, or usurps, by force or by the
voice of the majority, the rightful legal governments and maintains itself against the will of the
latter, such as the government of England under the Commonwealth, first by Parliament and
later by Cromwell as Protector. The second is that which is established and maintained by
military forces who invade and occupy a territory of the enemy in the course of war, and which
is denominated a government of paramount force, as the cases of Castine, in Maine, which was
reduced to British possession in the war of 1812, and Tampico, Mexico, occupied during the war
with Mexico, by the troops of the United States. And the third is that established as an
independent government by the inhabitants of a country who rise in insurrection against the
parent state of such as the government of the Southern Confederacy in revolt not concerned in
the present case with the first kind, but only with the second and third kinds of de facto
governments.
Speaking of government "de facto" of the second kind, the Supreme Court of the United States,
in the case of Thorington vs. Smith (8 Wall., 1), said: "But there is another description of
government, called also by publicists a government de facto, but which might, perhaps, be more
aptly denominated a government of paramount force. Its distinguishing characteristics are (1),
that its existence is maintained by active military power with the territories, and against the
rightful authority of an established and lawful government; and (2), that while it exists it
necessarily be obeyed in civil matters by private citizens who, by acts of obedience rendered in
submission to such force, do not become responsible, or wrongdoers, for those acts, though not
warranted by the laws of the rightful government. Actual governments of this sort are
established over districts differing greatly in extent and conditions. They are usually
administered directly by military authority, but they may be administered, also, civil authority,
supported more or less directly by military force. . . . One example of this sort of government is
found in the case of Castine, in Mine, reduced to British possession in the war of 1812 . . . U. S.
vs. Rice (4 Wheaton, 253). A like example is found in the case of Tampico, occupied during the
war with Mexico, by the troops of the United States . . . Fleming vs. Page (9 Howard, 614).
These were cases of temporary possessions of territory by lawfull and regular governments at
war with the country of which the territory so possessed was part."
The powers and duties of de facto governments of this description are regulated in Section III of
the Hague Conventions of 1907, which is a revision of the provisions of the Hague Conventions
of 1899 on the same subject of said Section III provides "the authority of the legislative power
having actually passed into the hands of the occupant, the latter shall take steps in his power to
reestablish and insure, as far as possible, public order and safety, while respecting, unless
absolutely prevented, the laws in force in the country."
According to the precepts of the Hague Conventions, as the belligerent occupant has the right
and is burdened with the duty to insure public order and safety during his military occupation, he
possesses all the powers of a de facto government, and he can suspended the old laws and
promulgate new ones and make such changes in the old as he may see fit, but he is enjoined to
respect, unless absolutely prevented by the circumstances prevailing in the occupied territory,
the municipal laws in force in the country, that is, those laws which enforce public order and
regulate social and commercial life of the country. On the other hand, laws of a political nature
or affecting political relations, such as, among others, the right of assembly, the right to bear
arms, the freedom of the press, and the right to travel freely in the territory occupied, are
considered as suspended or in abeyance during the military occupation. Although the local and
civil administration of justice is suspended as a matter of course as soon as a country is militarily
occupied, it is not usual for the invader to take the whole administration into his own hands. In
practice, the local ordinary tribunals are authorized to continue administering justice; and judges
and other judicial officers are kept in their posts if they accept the authority of the belligerent
occupant or are required to continue in their positions under the supervision of the military or
civil authorities appointed, by the Commander in Chief of the occupant. These principles and
practice have the sanction of all publicists who have considered the subject, and have been
asserted by the Supreme Court and applied by the President of the United States.
The doctrine upon this subject is thus summed up by Halleck, in his work on International Law
(Vol. 2, p. 444): "The right of one belligerent to occupy and govern the territory of the enemy
while in its military possession, is one of the incidents of war, and flows directly from the right
to conquer. We, therefore, do not look to the Constitution or political institutions of the
conqueror, for authority to establish a government for the territory of the enemy in his
possession, during its military occupation, nor for the rules by which the powers of such
government are regulated and limited. Such authority and such rules are derived directly from
the laws war, as established by the usage of the of the world, and confirmed by the writings of
publicists and decisions of courts in fine, from the law of nations. . . . The municipal laws of
a conquered territory, or the laws which regulate private rights, continue in force during military
occupation, excepts so far as they are suspended or changed by the acts of conqueror. . . . He,
nevertheless, has all the powers of a de facto government, and can at his pleasure either change
the existing laws or make new ones."
And applying the principles for the exercise of military authority in an occupied territory, which
were later embodied in the said Hague Conventions, President McKinley, in his executive order
to the Secretary of War of May 19,1898, relating to the occupation of the Philippines by United
States forces, said in part: "Though the powers of the military occupant are absolute and
supreme, and immediately operate upon the political condition of the inhabitants, the municipal
laws of the conquered territory, such as affect private rights of person and property and provide
for the punishment of crime, are considered as continuing in force, so far as they are compatible
with the new order of things, until they are suspended or superseded by the occupying
belligerent; and in practice they are not usually abrogated, but are allowed to remain in force and
to be administered by the ordinary tribunals, substantially as they were before the occupation.
This enlightened practice is, so far as possible, to be adhered to on the present occasion. The
judges and the other officials connected with the administration of justice may, if they accept the
authority of the United States, continue to administer the ordinary law of the land as between
man and man under the supervision of the American Commander in Chief." (Richardson's
Messages and Papers of President, X, p. 209.)
As to "de facto" government of the third kind, the Supreme Court of the United States, in the
same case of Thorington vs. Smith, supra, recognized the government set up by the Confederate
States as a de facto government. In that case, it was held that "the central government
established for the insurgent States differed from the temporary governments at Castine and
Tampico in the circumstance that its authority did no originate in lawful acts of regular war; but
it was not, on the account, less actual or less supreme. And we think that it must be classed
among the governments of which these are examples. . . .
In the case of William vs. Bruffy (96 U. S. 176, 192), the Supreme Court of the United States,
discussing the validity of the acts of the Confederate States, said: "The same general form of
government, the same general laws for the administration of justice and protection of private
rights, which had existed in the States prior to the rebellion, remained during its continuance and
afterwards. As far as the Acts of the States do not impair or tend to impair the supremacy of the
national authority, or the just rights of citizens under the Constitution, they are, in general, to be
treated as valid and binding. As we said in Horn vs. Lockhart (17 Wall., 570; 21 Law. ed., 657):
"The existence of a state of insurrection and war did not loosen the bonds of society, or do away
with civil government or the regular administration of the laws. Order was to be preserved,
police regulations maintained, crime prosecuted, property protected, contracts enforced,
marriages celebrated, estates settled, and the transfer and descent of property regulated, precisely
as in the time of peace. No one, that we are aware of, seriously questions the validity of judicial
or legislative Acts in the insurrectionary States touching these and kindered subjects, where they
were not hostile in their purpose or mode of enforcement to the authority of the National
Government, and did not impair the rights of citizens under the Constitution'. The same doctrine
has been asserted in numerous other cases."
And the same court, in the case of Baldy vs. Hunter (171 U. S., 388, 400), held: "That what
occured or was done in respect of such matters under the authority of the laws of these local de
facto governments should not be disregarded or held to be invalid merely because those
governments were organized in hostility to the Union established by the national Constitution;
this, because the existence of war between the United States and the Confederate States did not
relieve those who are within the insurrectionary lines from the necessity of civil obedience, nor
destroy the bonds of society nor do away with civil government or the regular administration of
the laws, and because transactions in the ordinary course of civil society as organized within the
enemy's territory although they may have indirectly or remotely promoted the ends of the de
facto or unlawful government organized to effect a dissolution of the Union, were without blame
'except when proved to have been entered into with actual intent to further invasion or
insurrection:'" and "That judicial and legislative acts in the respective states composing the socalled Confederate States should be respected by the courts if they were not hostile in their
purpose or mode of enforcement to the authority of the National Government, and did not impair
the rights of citizens under the Constitution."
In view of the foregoing, it is evident that the Philippine Executive Commission, which was
organized by Order No. 1, issued on January 23, 1942, by the Commander of the Japanese
forces, was a civil government established by the military forces of occupation and therefore a
de facto government of the second kind. It was not different from the government established by
the British in Castine, Maine, or by the United States in Tampico, Mexico. As Halleck says,
"The government established over an enemy's territory during the military occupation may
exercise all the powers given by the laws of war to the conqueror over the conquered, and is
subject to all restrictions which that code imposes. It is of little consequence whether such
government be called a military or civil government. Its character is the same and the source of
its authority the same. In either case it is a government imposed by the laws of war, and so far it
concerns the inhabitants of such territory or the rest of the world, those laws alone determine the
legality or illegality of its acts." (Vol. 2, p. 466.) The fact that the Philippine Executive
Commission was a civil and not a military government and was run by Filipinos and not by
Japanese nationals, is of no consequence. In 1806, when Napoleon occupied the greater part of
Prussia, he retained the existing administration under the general direction of a french official
(Langfrey History of Napoleon, 1, IV, 25); and, in the same way, the Duke of Willington, on
invading France, authorized the local authorities to continue the exercise of their functions,
apparently without appointing an English superior. (Wellington Despatches, XI, 307.). The
Germans, on the other hand, when they invaded France in 1870, appointed their own officials, at
least in Alsace and Lorraine, in every department of administration and of every rank. (Calvo,
pars. 2186-93; Hall, International Law, 7th ed., p. 505, note 2.)
The so-called Republic of the Philippines, apparently established and organized as a sovereign
state independent from any other government by the Filipino people, was, in truth and reality, a
government established by the belligerent occupant or the Japanese forces of occupation. It was
of the same character as the Philippine Executive Commission, and the ultimate source of its
authority was the same the Japanese military authority and government. As General
MacArthur stated in his proclamation of October 23, 1944, a portion of which has been already
quoted, "under enemy duress, a so-called government styled as the 'Republic of the Philippines'
was established on October 14, 1943, based upon neither the free expression of the people's will
nor the sanction of the Government of the United States." Japan had no legal power to grant
independence to the Philippines or transfer the sovereignty of the United States to, or recognize
the latent sovereignty of, the Filipino people, before its military occupation and possession of
the Islands had matured into an absolute and permanent dominion or sovereignty by a treaty of
peace or other means recognized in the law of nations. For it is a well-established doctrine in
International Law, recognized in Article 45 of the Hauge Conventions of 1907 (which prohibits
compulsion of the population of the occupied territory to swear allegiance to the hostile power),
the belligerent occupation, being essentially provisional, does not serve to transfer sovereignty
over the territory controlled although the de jure government is during the period of occupancy
deprived of the power to exercise its rights as such. (Thirty Hogshead of Sugar vs. Boyle, 9
Cranch, 191; United States vs. Rice, 4 Wheat., 246; Fleming vs. Page, 9 Howard, 603; Downes
vs. Bidwell, 182 U. S., 345.) The formation of the Republic of the Philippines was a scheme
contrived by Japan to delude the Filipino people into believing in the apparent magnanimity of
the Japanese gesture of transferring or turning over the rights of government into the hands of
Filipinos. It was established under the mistaken belief that by doing so, Japan would secure the
cooperation or at least the neutrality of the Filipino people in her war against the United States
and other allied nations.
Indeed, even if the Republic of the Philippines had been established by the free will of the
Filipino who, taking advantage of the withdrawal of the American forces from the Islands, and
the occupation thereof by the Japanese forces of invasion, had organized an independent
government under the name with the support and backing of Japan, such government would
have been considered as one established by the Filipinos in insurrection or rebellion against the
parent state or the Unite States. And as such, it would have been a de facto government similar
to that organized by the confederate states during the war of secession and recognized as such by
the by the Supreme Court of the United States in numerous cases, notably those of Thorington
vs. Smith, Williams vs. Bruffy, and Badly vs. Hunter, above quoted; and similar to the shortlived government established by the Filipino insurgents in the Island of Cebu during the
Spanish-American war, recognized as a de facto government by the Supreme Court of the
United States in the case of McCleod vs. United States (299 U. S., 416). According to the facts
in the last-named case, the Spanish forces evacuated the Island of Cebu on December 25, 1898,
having first appointed a provisional government, and shortly afterwards, the Filipinos, formerly
in insurrection against Spain, took possession of the Islands and established a republic,
governing the Islands until possession thereof was surrendered to the United States on February
22, 1898. And the said Supreme Court held in that case that "such government was of the class
of de facto governments described in I Moore's International Law Digest, S 20, . . . 'called also
by publicists a government de facto, but which might, perhaps, be more aptly denominated a
government of paramount force . . '." That is to say, that the government of a country in
possession of belligerent forces in insurrection or rebellion against the parent state, rests upon
the same principles as that of a territory occupied by the hostile army of an enemy at regular war
with the legitimate power.
The governments by the Philippine Executive Commission and the Republic of the Philippines
during the Japanese military occupation being de facto governments, it necessarily follows that
the judicial acts and proceedings of the courts of justice of those governments, which are not of
a political complexion, were good and valid, and, by virtue of the well-known principle of
postliminy (postliminium) in international law, remained good and valid after the liberation or
reoccupation of the Philippines by the American and Filipino forces under the leadership of
General Douglas MacArthur. According to that well-known principle in international law, the
fact that a territory which has been occupied by an enemy comes again into the power of its
legitimate government of sovereignty, "does not, except in a very few cases, wipe out the effects
of acts done by an invader, which for one reason or another it is within his competence to do.
Thus judicial acts done under his control, when they are not of a political complexion,
administrative acts so done, to the extent that they take effect during the continuance of his
control, and the various acts done during the same time by private persons under the sanction of
municipal law, remain good. Were it otherwise, the whole social life of a community would be
paralyzed by an invasion; and as between the state and the individuals the evil would be scarcely
less, it would be hard for example that payment of taxes made under duress should be
ignored, and it would be contrary to the general interest that the sentences passed upon criminals
should be annulled by the disappearance of the intrusive government ." (Hall, International Law,
7th ed., p. 518.) And when the occupation and the abandonment have been each an incident of
the same war as in the present case, postliminy applies, even though the occupant has acted as
conqueror and for the time substituted his own sovereignty as the Japanese intended to do
apparently in granting independence to the Philippines and establishing the so-called Republic
of the Philippines. (Taylor, International Law, p. 615.)
That not only judicial but also legislative acts of de facto governments, which are not of a
political complexion, are and remain valid after reoccupation of a territory occupied by a
belligerent occupant, is confirmed by the Proclamation issued by General Douglas MacArthur
on October 23, 1944, which declares null and void all laws, regulations and processes of the
governments established in the Philippines during the Japanese occupation, for it would not have
been necessary for said proclamation to abrogate them if they were invalid ab initio.
2. The second question hinges upon the interpretation of the phrase "processes of any other
government" as used in the above-quoted proclamation of General Douglas MacArthur of
October 23, 1944 that is, whether it was the intention of the Commander in Chief of the
American Forces to annul and void thereby all judgments and judicial proceedings of the courts
established in the Philippines during the Japanese military occupation.
The phrase "processes of any other government" is broad and may refer not only to the judicial
processes, but also to administrative or legislative, as well as constitutional, processes of the
Republic of the Philippines or other governmental agencies established in the Islands during the
Japanese occupation. Taking into consideration the fact that, as above indicated, according to the
well-known principles of international law all judgements and judicial proceedings, which are
not of a political complexion, of the de facto governments during the Japanese military
occupation were good and valid before and remained so after the occupied territory had come
again into the power of the titular sovereign, it should be presumed that it was not, and could not
have been, the intention of General Douglas MacArthur, in using the phrase "processes of any
other government" in said proclamation, to refer to judicial processes, in violation of said
principles of international law. The only reasonable construction of the said phrase is that it
refers to governmental processes other than judicial processes of court proceedings, for
according to a well-known rule of statutory construction, set forth in 25 R. C. L., p. 1028, "a
statute ought never to be construed to violate the law of nations if any other possible
construction remains."
It is true that the commanding general of a belligerent army of occupation, as an agent of his
government, may not unlawfully suspend existing laws and promulgate new ones in the
occupied territory, if and when the exigencies of the military occupation demand such action.
But even assuming that, under the law of nations, the legislative power of a commander in chief
of military forces who liberates or reoccupies his own territory which has been occupied by an
enemy, during the military and before the restoration of the civil regime, is as broad as that of
the commander in chief of the military forces of invasion and occupation (although the
exigencies of military reoccupation are evidently less than those of occupation), it is to be
presumed that General Douglas MacArthur, who was acting as an agent or a representative of
the Government and the President of the United States, constitutional commander in chief of the
United States Army, did not intend to act against the principles of the law of nations asserted by
the Supreme Court of the United States from the early period of its existence, applied by the
Presidents of the United States, and later embodied in the Hague Conventions of 1907, as above
indicated. It is not to be presumed that General Douglas MacArthur, who enjoined in the same
proclamation of October 23, 1944, "upon the loyal citizens of the Philippines full respect and
obedience to the Constitution of the Commonwealth of the Philippines," should not only reverse
the international policy and practice of his own government, but also disregard in the same
breath the provisions of section 3, Article II, of our Constitution, which provides that "The
Philippines renounces war as an instrument of national policy, and adopts the generally accepted
principles of international law as part of the law of the Nation."
Moreover, from a contrary construction great inconvenience and public hardship would result,
and great public interests would be endangered and sacrificed, for disputes or suits already
adjudged would have to be again settled accrued or vested rights nullified, sentences passed on
criminals set aside, and criminals might easily become immune for evidence against them may
have already disappeared or be no longer available, especially now that almost all court records
in the Philippines have been destroyed by fire as a consequence of the war. And it is another
well-established rule of statutory construction that where great inconvenience will result from a
particular construction, or great public interests would be endangered or sacrificed, or great
mischief done, such construction is to be avoided, or the court ought to presume that such
construction was not intended by the makers of the law, unless required by clear and
unequivocal words. (25 R. C. L., pp. 1025, 1027.)
The mere conception or thought of possibility that the titular sovereign or his representatives
who reoccupies a territory occupied by an enemy, may set aside or annul all the judicial acts or
proceedings of the tribunals which the belligerent occupant had the right and duty to establish in
order to insure public order and safety during military occupation, would be sufficient to
paralyze the social life of the country or occupied territory, for it would have to be expected that
litigants would not willingly submit their litigation to courts whose judgements or decisions may
afterwards be annulled, and criminals would not be deterred from committing crimes or offenses
in the expectancy that they may escaped the penalty if judgments rendered against them may be
afterwards set aside.
That the proclamation has not invalidated all the judgements and proceedings of the courts of
justice during the Japanese regime, is impliedly confirmed by Executive Order No. 37, which
has the force of law, issued by the President of the Philippines on March 10, 1945, by virtue of
the emergency legislative power vested in him by the Constitution and the laws of the
Commonwealth of the Philippines. Said Executive order abolished the Court of Appeals, and
provided "that all case which have heretofore been duly appealed to the Court of Appeals shall
be transmitted to the Supreme Court final decision." This provision impliedly recognizes that the
judgments and proceedings of the courts during the Japanese military occupation have not been
invalidated by the proclamation of General MacArthur of October 23, because the said Order
does not say or refer to cases which have been duly appealed to said court prior to the Japanese
occupation, but to cases which had therefore, that is, up to March 10, 1945, been duly appealed
to the Court of Appeals; and it is to be presumed that almost all, if not all, appealed cases
pending in the Court of Appeals prior to the Japanese military occupation of Manila on January
2, 1942, had been disposed of by the latter before the restoration of the Commonwealth
Government in 1945; while almost all, if not all, appealed cases pending on March 10, 1945, in
the Court of Appeals were from judgments rendered by the Court of First Instance during the
Japanese regime.
The respondent judge quotes a portion of Wheaton's International Law which say: "Moreover
when it is said that an occupier's acts are valid and under international law should not be
abrogated by the subsequent conqueror, it must be remembered that no crucial instances exist to
show that if his acts should be reversed, any international wrong would be committed. What
does happen is that most matters are allowed to stand by the restored government, but the matter
can hardly be put further than this." (Wheaton, International Law, War, 7th English edition of
1944, p. 245.) And from this quotion the respondent judge "draws the conclusion that whether
the acts of the occupant should be considered valid or not, is a question that is up to the restored
government to decide; that there is no rule of international law that denies to the restored
government to decide; that there is no rule of international law that denies to the restored
government the right of exercise its discretion on the matter, imposing upon it in its stead the
obligation of recognizing and enforcing the acts of the overthrown government."
There is doubt that the subsequent conqueror has the right to abrogate most of the acts of the
occupier, such as the laws, regulations and processes other than judicial of the government
established by the belligerent occupant. But in view of the fact that the proclamation uses the
words "processes of any other government" and not "judicial processes" prisely, it is not
necessary to determine whether or not General Douglas MacArthur had power to annul and set
aside all judgments and proceedings of the courts during the Japanese occupation. The question
to be determined is whether or not it was his intention, as representative of the President of the
United States, to avoid or nullify them. If the proclamation had, expressly or by necessary
implication, declared null and void the judicial processes of any other government, it would be
necessary for this court to decide in the present case whether or not General Douglas MacArthur
had authority to declare them null and void. But the proclamation did not so provide,
undoubtedly because the author thereof was fully aware of the limitations of his powers as
Commander in Chief of Military Forces of liberation or subsequent conqueror.
Not only the Hague Regulations, but also the principles of international law, as they result from
the usages established between civilized nations, the laws of humanity and the requirements of
the public of conscience, constitute or from the law of nations. (Preamble of the Hague
Conventions; Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of the
Hague Regulations or Conventions which we have already quoted in discussing the first
question, imposes upon the occupant the obligation to establish courts; and Article 23 (h),
section II, of the same Conventions, which prohibits the belligerent occupant "to declare . . .
suspended . . . in a Court of Law the rights and action of the nationals of the hostile party,"
forbids him to make any declaration preventing the inhabitants from using their courts to assert
or enforce their civil rights. (Decision of the Court of Appeals of England in the case of Porter
vs. Fruedenburg, L.R. [1915], 1 K.B., 857.) If a belligerent occupant is required to establish
courts of justice in the territory occupied, and forbidden to prevent the nationals thereof from
asserting or enforcing therein their civil rights, by necessary implication, the military
commander of the forces of liberation or the restored government is restrained from nullifying or
setting aside the judgments rendered by said courts in their litigation during the period of
occupation. Otherwise, the purpose of these precepts of the Hague Conventions would be
thwarted, for to declare them null and void would be tantamount to suspending in said courts the
right and action of the nationals of the territory during the military occupation thereof by the
enemy. It goes without saying that a law that enjoins a person to do something will not at the
same time empower another to undo the same. Although the question whether the President or
commanding officer of the United States Army has violated restraints imposed by the
constitution and laws of his country is obviously of a domestic nature, yet, in construing and
applying limitations imposed on the executive authority, the Supreme Court of the United States,
in the case of Ochoa, vs. Hernandez (230 U.S., 139), has declared that they "arise from general
rules of international law and from fundamental principles known wherever the American flag
flies."
In the case of Raymond vs. Thomas (91 U.S., 712), a special order issued by the officer in
command of the forces of the United States in South Carolina after the end of the Civil War,
wholly annulling a decree rendered by a court of chancery in that state in a case within its
jurisdiction, was declared void, and not warranted by the acts approved respectively March 2,
1867 (14 Stat., 428), and July 19 of the same year (15 id., 14), which defined the powers and
duties of military officers in command of the several states then lately in rebellion. In the course
of its decision the court said; "We have looked carefully through the acts of March 2, 1867 and
July 19, 1867. They give very large governmental powers to the military commanders
designated, within the States committed respectively to their jurisdiction; but we have found
nothing to warrant the order here in question. . . . The clearest language would be necessary to
satisfy us that Congress intended that the power given by these acts should be so exercised. . . .
It was an arbitrary stretch of authority, needful to no good end that can be imagined. Whether
Congress could have conferred the power to do such an act is a question we are not called upon
to consider. It is an unbending rule of law that the exercise of military power, where the rights of
the citizen are concerned, shall never be pushed beyond what the exigency requires. (Mithell vs.
Harmony, 13 How., 115; Warden vs. Bailey, 4 Taunt., 67; Fabrigas vs. Moysten, 1 Cowp., 161;
s.c., 1 Smith's L.C., pt. 2, p. 934.) Viewing the subject before us from the standpoint indicated,
we hold that the order was void."
It is, therefore, evident that the proclamation of General MacArthur of October 23, 1944, which
declared that "all laws, regulations and processes of any other government in the Philippines
than that of the said Commonwealth are null and void without legal effect in areas of the
Philippines free of enemy occupation and control," has not invalidated the judicial acts and
proceedings, which are not a political complexion, of the courts of justice in the Philippines that
were continued by the Philippine Executive Commission and the Republic of the Philippines
during the Japanese military occupation, and that said judicial acts and proceedings were good
and valid before and now good and valid after the reoccupation of liberation of the Philippines
by the American and Filipino forces.
3. The third and last question is whether or not the courts of the Commonwealth, which are the
same as those existing prior to, and continued during, the Japanese military occupation by the
Philippine Executive Commission and by the so-called Republic of the Philippines, have
jurisdiction to continue now the proceedings in actions pending in said courts at the time the
Philippine Islands were reoccupied or liberated by the American and Filipino forces, and the
Commonwealth Government was restored.
Although in theory the authority the authority of the local civil and judicial administration is
suspended as a matter of course as soon as military occupation takes place, in practice the
invader does not usually take the administration of justice into his own hands, but continues the
ordinary courts or tribunals to administer the laws of the country which he is enjoined, unless
absolutely prevented, to respect. As stated in the above-quoted Executive Order of President
McKinley to the Secretary of War on May 19, 1898, "in practice, they (the municipal laws) are
not usually abrogated but are allowed to remain in force and to be administered by the ordinary
tribunals substantially as they were before the occupation. This enlightened practice is, so far as
possible, to be adhered to on the present occasion." And Taylor in this connection says: "From a
theoretical point of view it may be said that the conqueror is armed with the right to substitute
his arbitrary will for all preexisting forms of government, legislative, executive and judicial.
From the stand-point of actual practice such arbitrary will is restrained by the provision of the
law of nations which compels the conqueror to continue local laws and institution so far as
military necessity will permit." (Taylor, International Public Law, p.596.) Undoubtedly, this
practice has been adopted in order that the ordinary pursuits and business of society may not be
unnecessarily deranged, inasmuch as belligerent occupation is essentially provisional, and the
government established by the occupant of transient character.
Following these practice and precepts of the law of nations, Commander in Chief of the
Japanese Forces proclaimed on January 3, 1942, when Manila was occupied, the military
administration under martial law over the territory occupied by the army, and ordered that "all
the laws now in force in the Commonwealth, as well as executive and judicial institutions, shall
continue to be affective for the time being as in the past," and "all public officials shall remain in
their present post and carry on faithfully their duties as before." When the Philippine Executive
Commission was organized by Order No. 1 of the Japanese Commander in Chief, on January 23,
1942, the Chairman of the Executive Commission, by Executive Orders Nos. 1 and 4 of January
30 and February 5, respectively, continued the Supreme Court, Court of Appeals, Court of First
Instance, and justices of the peace of courts, with the same jurisdiction in conformity with the
instructions given by the Commander in Chief of the Imperial Japanese Army in Order No. 3 of
February 20, 1942. And on October 14, 1943 when the so-called Republic of the Philippines was
inaugurated, the same courts were continued with no substantial change in organization and
jurisdiction thereof.
If the proceedings pending in the different courts of the Islands prior to the Japanese military
occupation had been continued during the Japanese military administration, the Philippine
Executive Commission, and the so-called Republic of the Philippines, it stands to reason that the
same courts, which had become reestablished and conceived of as having in continued existence
upon the reoccupation and liberation of the Philippines by virtue of the principle of postliminy
(Hall, International Law, 7th ed., p. 516), may continue the proceedings in cases then pending in
said courts, without necessity of enacting a law conferring jurisdiction upon them to continue
said proceedings. As Taylor graphically points out in speaking of said principles "a state or other
governmental entity, upon the removal of a foreign military force, resumes its old place with its
right and duties substantially unimpaired. . . . Such political resurrection is the result of a law
analogous to that which enables elastic bodies to regain their original shape upon removal of the
external force, and subject to the same exception in case of absolute crushing of the whole
fibre and content." (Taylor, International Public Law, p. 615.)
The argument advanced by the respondent judge in his resolution in support in his conclusion
that the Court of First Instance of Manila presided over by him "has no authority to take
cognizance of, and continue said proceedings (of this case) to final judgment until and unless the
Government of the Commonwealth of the Philippines . . . shall have provided for the transfer of
the jurisdiction of the courts of the now defunct Republic of the Philippines, and the cases
commenced and the left pending therein," is "that said courts were a government alien to the
Commonwealth Government. The laws they enforced were, true enough, laws of the
Commonwealth prior to Japanese occupation, but they had become the laws and the courts
had become the institutions of Japan by adoption (U.S. vs. Reiter. 27 F. Cases, No. 16146), as
they became later on the laws and institutions of the Philippine Executive Commission and the
Republic of the Philippines."
The court in the said case of U.S. vs. Reiter did not and could not say that the laws and
institutions of the country occupied if continued by the conqueror or occupant, become the laws
and the courts, by adoption, of the sovereign nation that is militarily occupying the territory.
Because, as already shown, belligerent or military occupation is essentially provisional and does
not serve to transfer the sovereignty over the occupied territory to the occupant. What the court
said was that, if such laws and institutions are continued in use by the occupant, they become his
and derive their force from him, in the sense that he may continue or set them aside. The laws
and institution or courts so continued remain the laws and institutions or courts of the occupied
territory. The laws and the courts of the Philippines, therefore, did not become, by being
continued as required by the law of nations, laws and courts of Japan. The provision of Article
45, section III, of the Hague Conventions of 1907 which prohibits any compulsion of the
population of occupied territory to swear allegiance to the hostile power, "extends to prohibit
everything which would assert or imply a change made by the invader in the legitimate
sovereignty. This duty is neither to innovate in the political life of the occupied districts, nor
needlessly to break the continuity of their legal life. Hence, so far as the courts of justice are
allowed to continue administering the territorial laws, they must be allowed to give their
sentences in the name of the legitimate sovereign " (Westlake, Int. Law, Part II, second ed., p.
102). According to Wheaton, however, the victor need not allow the use of that of the legitimate
government. When in 1870, the Germans in France attempted to violate that rule by ordering,
after the fall of the Emperor Napoleon, the courts of Nancy to administer justice in the name of
the "High German Powers occupying Alsace and Lorraine," upon the ground that the exercise of
their powers in the name of French people and government was at least an implied recognition
of the Republic, the courts refused to obey and suspended their sitting. Germany originally
ordered the use of the name of "High German Powers occupying Alsace and Lorraine," but later
offered to allow use of the name of the Emperor or a compromise. (Wheaton, International Law,
War, 7th English ed. 1944, p. 244.)
Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established
continues until changed by the some competent legislative power. It is not change merely by
change of sovereignty." (Joseph H. Beale, Cases on Conflict of Laws, III, Summary Section 9,
citing Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his Treatise on the
Conflict on Laws (Cambridge, 1916, Section 131): "There can no break or interregnum in law.
From the time the law comes into existence with the first-felt corporateness of a primitive people
it must last until the final disappearance of human society. Once created, it persists until a
change take place, and when changed it continues in such changed condition until the next
change, and so forever. Conquest or colonization is impotent to bring law to an end; in spite of
change of constitution, the law continues unchanged until the new sovereign by legislative acts
creates a change."
As courts are creatures of statutes and their existence defends upon that of the laws which create
and confer upon them their jurisdiction, it is evident that such laws, not being a political nature,
are not abrogated by a change of sovereignty, and continue in force "ex proprio vigore" unless
and until repealed by legislative acts. A proclamation that said laws and courts are expressly
continued is not necessary in order that they may continue in force. Such proclamation, if made,
is but a declaration of the intention of respecting and not repealing those laws. Therefore, even
assuming that Japan had legally acquired sovereignty over these Islands, which she had
afterwards transferred to the so-called Republic of the Philippines, and that the laws and the
courts of these Islands had become the courts of Japan, as the said courts of the laws creating
and conferring jurisdiction upon them have continued in force until now, it necessarily follows
that the same courts may continue exercising the same jurisdiction over cases pending therein
before the restoration of the Commonwealth Government, unless and until they are abolished or
the laws creating and conferring jurisdiction upon them are repealed by the said government. As
a consequence, enabling laws or acts providing that proceedings pending in one court be
continued by or transferred to another court, are not required by the mere change of government
or sovereignty. They are necessary only in case the former courts are abolished or their
jurisdiction so change that they can no longer continue taking cognizance of the cases and
proceedings commenced therein, in order that the new courts or the courts having jurisdiction
over said cases may continue the proceedings. When the Spanish sovereignty in the Philippine
Islands ceased and the Islands came into the possession of the United States, the "Audiencia" or
Supreme Court was continued and did not cease to exist, and proceeded to take cognizance of
the actions pending therein upon the cessation of the Spanish sovereignty until the said
"Audiencia" or Supreme Court was abolished, and the Supreme Court created in Chapter II of
Act No. 136 was substituted in lieu thereof. And the Courts of First Instance of the Islands
during the Spanish regime continued taking cognizance of cases pending therein upon the
change of sovereignty, until section 65 of the same Act No. 136 abolished them and created in its
Chapter IV the present Courts of First Instance in substitution of the former. Similarly, no
enabling acts were enacted during the Japanese occupation, but a mere proclamation or order
that the courts in the Island were continued.
On the other hand, during the American regime, when section 78 of Act No. 136 was enacted
abolishing the civil jurisdiction of the provost courts created by the military government of
occupation in the Philippines during the Spanish-American War of 1898, the same section 78
provided for the transfer of all civil actions then pending in the provost courts to the proper
tribunals, that is, to the justices of the peace courts, Court of First Instance, or Supreme Court
having jurisdiction over them according to law. And later on, when the criminal jurisdiction of
provost courts in the City of Manila was abolished by section 3 of Act No. 186, the same section
provided that criminal cases pending therein within the jurisdiction of the municipal court
created by Act No. 183 were transferred to the latter.
That the present courts as the same courts which had been functioning during the Japanese
regime and, therefore, can continue the proceedings in cases pending therein prior to the
restoration of the Commonwealth of the Philippines, is confirmed by Executive Order No. 37
which we have already quoted in support of our conclusion in connection with the second
question. Said Executive Order provides"(1) that the Court of Appeals created and established
under Commonwealth Act No. 3 as amended, be abolished, as it is hereby abolished," and "(2)
that all cases which have heretofore been duly appealed to the Court of Appeals shall be
transmitted to the Supreme Court for final decision. . . ." In so providing, the said Order
considers that the Court of Appeals abolished was the same that existed prior to, and continued
after, the restoration of the Commonwealth Government; for, as we have stated in discussing the
previous question, almost all, if not all, of the cases pending therein, or which had theretofore
(that is, up to March 10, 1945) been duly appealed to said court, must have been cases coming
from the Courts of First Instance during the so-called Republic of the Philippines. If the Court of
Appeals abolished by the said Executive Order was not the same one which had been
functioning during the Republic, but that which had existed up to the time of the Japanese
occupation, it would have provided that all the cases which had, prior to and up to that
occupation on January 2, 1942, been dully appealed to the said Court of Appeals shall be
transmitted to the Supreme Court for final decision.
It is, therefore, obvious that the present courts have jurisdiction to continue, to final judgment,
the proceedings in cases, not of political complexion, pending therein at the time of the
restoration of the Commonwealth Government.
Having arrived at the above conclusions, it follows that the Court of First Instance of Manila has
jurisdiction to continue to final judgment the proceedings in civil case No. 3012, which involves
civil rights of the parties under the laws of the Commonwealth Government, pending in said
court at the time of the restoration of the said Government; and that the respondent judge of the
court, having refused to act and continue him does a duty resulting from his office as presiding
judge of that court, mandamus is the speedy and adequate remedy in the ordinary course of law,
especially taking into consideration the fact that the question of jurisdiction herein involved does
affect not only this particular case, but many other cases now pending in all the courts of these
Islands.
In view of all the foregoing it is adjudged and decreed that a writ of mandamus issue, directed to
the respondent judge of the Court of First Instance of Manila, ordering him to take cognizance of
and continue to final judgment the proceedings in civil case No. 3012 of said court. No
pronouncement as to costs. So ordered.
Moran, C.J., Ozaeta, Paras, Jaranilla and Pablo, JJ., concur.
Separate Opinions not included here.
G.R. No. L-36409 October 26, 1973

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
LORETA GOZO, defendant-appellant.
Office of the Solicitor General Felix Q. Antonio, Assistant Solicitor General Jaime M. Lantin
and Solicitor Norberto P. Eduardo for plaintiff-appellee.
Jose T. Nery for defendant-appellant.
FERNANDO, J.:
Appellant seeks to set aside a judgment of the Court of First Instance of Zambales, convicting
her of a violation of an ordinance of Olongapo, Zambales, requiring a permit from the municipal
mayor for the construction or erection of a building, as well as any modification, alteration,
repair or demolition thereof. She questions its validity, or at the very least, its applicability to
her, by invoking due process, 1 a contention she would premise on what for her is the teaching of
People v. Fajardo. 2 If such a ground were far from being impressed with solidity, she stands on
quicksand when she would deny the applicability of the ordinance to her, on the pretext that her
house was constructed within the naval base leased to the American armed forces. While
yielding to the well-settled doctrine that it does not thereby cease to be Philippine territory, she
would, in effect, seek to emasculate our sovereign rights by the assertion that we cannot exercise
therein administrative jurisdiction. To state the proposition is to make patent how much it is
tinged with unorthodoxy. Clearly then, the lower court decision must be affirmed with the sole
modification that she is given thirty days from the finality of a judgment to obtain a permit,
failing which, she is required to demolish the same.
The facts are undisputed. As set forth in the decision of the lower court: "The accused bought a
house and lot located inside the United States Naval Reservation within the territorial
jurisdiction of Olongapo City. She demolished the house and built another one in its place,
without a building permit from the City Mayor of Olongapo City, because she was told by one
Ernesto Evalle, an assistant in the City Mayor's office, as well as by her neighbors in the area,
that such building permit was not necessary for the construction of the house. On December 29,
1966, Juan Malones, a building and lot inspector of the City Engineer's Office, Olongapo City,
together with Patrolman Ramon Macahilas of the Olongapo City police force apprehended four
carpenters working on the house of the accused and they brought the carpenters to the Olongapo
City police headquarters for interrogation. ... After due investigation, Loreta Gozo was charged
with violation of Municipal Ordinance No. 14, S. of 1964 with the City Fiscal's Office." 3 The
City Court of Olongapo City found her guilty of violating Municipal Ordinance No. 14, Series
of 1964 and sentenced her to an imprisonment of one month as well as to pay the costs. The
Court of Instance of Zambales, on appeal, found her guilty on the above facts of violating such
municipal ordinance but would sentence her merely to pay a fine of P200.00 and to demolish the
house thus erected. She elevated the case to the Court of Appeals but in her brief, she would put
in issue the validity of such an ordinance on constitutional ground or at the very least its
applicability to her in view of the location of her dwelling within the naval base. Accordingly,
the Court of Appeals, in a resolution of January 29, 1973, noting the constitutional question
raised, certified the case to this Court.
There is, as mentioned in the opening paragraph of this petition, no support in law for the stand
taken by appellant.
1. It would be fruitless for her to assert that local government units are devoid of authority to
require building permits. This Court, from Switzer v. Municipality of
Cebu, 4 decided in 1911, has sanctioned the validity of such measures. It is much too late in the
day to contend that such a requirement cannot be validly imposed. Even appellant, justifiably
concerned about the unfavorable impression that could be created if she were to deny that such
competence is vested in municipal corporations and chartered cities, had to concede in her brief:
"If, at all; the questioned ordinance may be predicated under the general welfare clause ... ." 5 Its
scope is wide, well-nigh all embracing, covering every aspect of public health, public morals,
public safety, and the well being and good order of the community. 6
It goes without saying that such a power is subject to limitations. Certainly, if its exercise is
violative of any constitutional right, then its validity could be impugned, or at the very least, its
applicability to the person adversely affected could be questioned. So much is settled law.
Apparently, appellant has adopted the view that a due process question may indeed be raised in
view of what for her is its oppressive character. She is led to such a conclusion, relying on
People v. Fajardo. 7 A more careful scrutiny of such a decision would not have led her astray, for
that case is easily distinguishable. The facts as set forth in the opinion follow: "It appears that on
August 15, 1950, during the incumbency of defendant-appellant Juan F. Fajardo as mayor of the
municipality of Baao, Camarines Sur, the municipal council passed the ordinance in question
providing as follows: "... 1. Any person or persons who will construct or repair a building
should, before constructing or repairing, obtain a written permit from the Municipal Mayor. ... 2.
A fee of not less than P2.00 should be charged for each building permit and P1.00 for each repair
permit issued. ... 3. [Penalty]-Any violation of the provisions of the above, this ordinance, shall
make the violator liable to pay a fine of not less than P25 nor more than P50 or imprisonment of
not less than 12 days nor more than 24 days or both, at the discretion of the court. If said
building destroys the view of the Public Plaza or occupies any public property, it shall be
removed at the expense of the owner of the building or house. ... ." Four years later, after the
term of appellant Fajardo as mayor had expired, he and his son-in-law, appellant Babilonia, filed
a written request with the incumbent municipal mayor for a permit to construct a building
adjacent to their gasoline station on a parcel of land registered in Fajardo's name, located along
the national highway and separated from the public plaza by a creek ... . On January 16, 1954,
the request was denied, for the reason among others that the proposed building would destroy
the view or beauty of the public plaza ... . On January 18, 1954, defendants reiterated their
request for a building permit ..., but again the request was turned down by the mayor.
Whereupon, appellants proceeded with the construction of the building without a permit,
because they needed a place of residence very badly, their former house having been destroyed
by a typhoon and hitherto they had been living on leased property." 8
Clearly then, the application of such an ordinance to Fajardo was oppressive. A conviction
therefore for a violation thereof both in the justice of the peace court of Baao, Camarines Sur as
well as in the Court of First Instance could not be sustained. In this case, on the contrary,
appellant never bothered to comply with the ordinance. Perhaps aware of such a crucial
distinction, she would assert in her brief: "The evidence showed that even if the accused were to
secure a permit from the Mayor, the same would not have been granted. To require the accused
to obtain a permit before constructing her house would be an exercise in futility. The law will
not require anyone to perform an impossibility, neither in law or in fact: ... ." 9 It would be from
her own version, at the very least then, premature to anticipate such an adverse result, and thus
to condemn an ordinance which certainly lends itself to an interpretation that is neither
oppressive, unfair, or unreasonable. That kind of interpretation suffices to remove any possible
question of its validity, as was expressly announced in Primicias v. Fugoso. 10 So it appears from
this portion of the opinion of Justice Feria, speaking for the Court: "Said provision is susceptible
of two constructions: one is that the Mayor of the City of Manila is vested with unregulated
discretion to grant or refuse to grant permit for the holding of a lawful assembly or meeting,
parade, or procession in the streets and other public places of the City of Manila; and the other is
that the applicant has the right to a permit which shall be granted by the Mayor, subject only to
the latter's reasonable discretion to determine or specify the streets or public places to be used
for the purpose, with a view to prevent confusion by overlapping, to secure convenient use of
the streets and public places by others, and to provide adequate and proper policing to minimize
the risk of disorder. After a mature deliberation, we have arrived at the conclusion that we must
adopt the second construction, that is, construe the provisions of the said ordinance to mean that
it does not confer upon the Mayor the power to refuse to grant the permit, but only the
discretion, in issuing the permit, to determine or specify the streets or public places where the
parade or procession may pass or the meeting may be held." 11 If, in a case affecting such a
preferred freedom as the right to assembly, this Court could construe an ordinance of the City of
Manila so as to avoid offending against a constitutional provision, there is nothing to preclude it
from a similar mode of approach in order to show the lack of merit of an attack against an
ordinance requiring a permit. Appellant cannot therefore take comfort from any broad statement
in the Fajardo opinion, which incidentally is taken out of context, considering the admitted
oppressive application of the challenged measure in that litigation. So much then for the
contention that she could not have been validly convicted for a violation of such ordinance. Nor
should it be forgotten that she did suffer the same fate twice, once from the City Court and
thereafter from the Court of First Instance. The reason is obvious.Such ordinance applies to her.
2. Much less is a reversal indicated because of the alleged absence of the rather novel concept of
administrative jurisdiction on the part of Olongapo City. Nor is novelty the only thing that may
be said against it. Far worse is the assumption at war with controlling and authoritative doctrines
that the mere existence of military or naval bases of a foreign country cuts deeply into the power
to govern. Two leading cases may be cited to show how offensive is such thinking to the juristic
concept of sovereignty, People v. Acierto, 12 and Reagan v. Commissioner of Internal Revenue. 13
As was so emphatically set forth by Justice Tuason in Acierto: "By the Agreement, it should be
noted, the Philippine Government merely consents that the United States exercise jurisdiction in
certain cases. The consent was given purely as a matter of comity, courtesy, or expediency. The
Philippine Government has not abdicated its sovereignty over the bases as part of the Philippine
territory or divested itself completely of jurisdiction over offenses committed therein. Under the
terms of the treaty, the United States Government has prior or preferential but not exclusive
jurisdiction of such offenses. The Philippine Government retains not only jurisdictional rights
not granted, but also all such ceded rights as the United States Military authorities for reasons of
their own decline to make use of. The first proposition is implied from the fact of Philippine
sovereignty over the bases; the second from the express provisions of the treaty." 14 There was a
reiteration of such a view in Reagan. Thus: "Nothing is better settled than that the Philippines
being independent and sovereign, its authority may be exercised over its entire domain. There is
no portion thereof that is beyond its power. Within its limits, its decrees are supreme, its
commands paramount. Its laws govern therein, and everyone to whom it applies must submit to
its terms. That is the extent of its jurisdiction, both territorial and personal. Necessarily, likewise,
it has to be exclusive. If it were not thus, there is a diminution of sovereignty." 15 Then came this
paragraph dealing with the principle of auto-limitation: "It is to be admitted any state may, by its
consent, express or implied, submit to a restriction of its sovereign rights. There may thus be a
curtailment of what otherwise is a power plenary in character. That is the concept of sovereignty
as auto-limitation, which, in the succinct language of Jellinek, "is the property of a state-force
due to which it has the exclusive capacity of legal self-determination and self-restriction." A
state then, if it chooses to, may refrain from the exercise of what otherwise is illimitable
competence." 16 The opinion was at pains to point out though that even then, there is at the most
diminution of jurisdictional rights, not its disappearance. The words employed follow: "Its laws
may as to some persons found within its territory no longer control. Nor does the matter end
there. It is not precluded from allowing another power to participate in the exercise of
jurisdictional right over certain portions of its territory. If it does so, it by no means follows that
such areas become impressed with an alien character. They retain their status as native soil. They
are still subject to its authority. Its jurisdiction may be diminished, but it does not disappear. So
it is with the bases under lease to the American armed forces by virtue of the military bases
agreement of 1947. They are not and cannot be foreign territory." 17
Can there be anything clearer, therefore, than that only a turnabout, unwarranted and unjustified,
from what is settled and orthodox law can lend the slightest degree of plausibility to the
contention of absence of administrative jurisdiction. If it were otherwise, what was aptly referred
to by Justice Tuason "as a matter of comity, courtesy, or expediency" becomes one of obeisance
and submission. If on a concern purely domestic in its implications, devoid of any connection
with national security, the Military-Bases Agreement could be thus interpreted, then sovereignty
indeed becomes a mockery and an illusion. Nor does appellant's thesis rest on less shaky
foundation by the mere fact that Acierto and Reagan dealt with the competence of the national
government, while what is sought to be emasculated in this case is the so-called administrative
jurisdiction of a municipal corporation. Within the limits of its territory, whatever statutory
powers are vested upon it may be validly exercised. Any residual authority and therein
conferred, whether expressly or impliedly, belongs to the national government, not to an alien
country. What is even more to be deplored in this stand of appellant is that no such claim is
made by the American naval authorities, not that it would do them any good if it were so
asserted. To quote from Acierto anew: "The carrying out of the provisions of the Bases
Agreement is the concern of the contracting parties alone. Whether, therefore, a given case
which by the treaty comes within the United States jurisdiction should be transferred to the
Philippine authorities is a matter about which the accused has nothing to do or say. In other
words, the rights granted to the United States by the treaty insure solely to that country and can
not be raised by the offender." 18 If an accused would suffer from such disability, even if the
American armed forces were the beneficiary of a treaty privilege, what is there for appellant to
take hold of when there is absolutely no showing of any alleged grant of what is quaintly
referred to as administrative jurisdiction? That is all, and it is more than enough, to make
manifest the futility of seeking a reversal.
WHEREFORE, the appealed decision of November 11, 1969 is affirmed insofar as it found the
accused, Loreta Gozo, guilty beyond reasonable doubt of a violation of Municipal Ordinance
No. 14, series of 1964 and sentencing her to pay a fine of P200.00 with subsidiary imprisonment
in case of insolvency, and modified insofar as she is required to demolish the house that is the
subject matter of the case, she being given a period of thirty days from the finality of this
decision within which to obtain the required permit. Only upon her failure to do so will that
portion of the appealed decision requiringdemolition be enforced. Costs against the accused.
Makalintal, C.J., Zaldivar, Castro, Teehankee, Makasiar, Antonio and Esguerra, JJ., concur.
Barredo, J., took no part.
G.R. No. L-409
January 30, 1947
ANASTACIO LAUREL, petitioner,

vs.
ERIBERTO MISA, respondent.
Claro M. Recto and Querube C. Makalintal for petitioner.
First Assistant Solicitor General Reyes and Solicitor Hernandez, Jr., for respondent.
RESOLUTION
In G.R. No. L-409, Anastacio Laurel vs. Eriberto Misa, etc., the Court, acting on the
petition for habeas corpus filed by Anastacio Laurel and based on a theory that a Filipino
citizen who adhered to the enemy giving the latter aid and comfort during the Japanese
occupation cannot be prosecuted for the crime of treason defined and penalized by article
114 of the Revised Penal Code, for the reason (1) that the sovereignty of the legitimate
government in the Philippines and, consequently, the correlative allegiance of Filipino
citizens thereto was then suspended; and (2) that there was a change of sovereignty over
these Islands upon the proclamation of the Philippine Republic:
(1) Considering that a citizen or subject owes, not a qualified and temporary, but an
absolute and permanent allegiance, which consists in the obligation of fidelity and
obedience to his government or sovereign; and that this absolute and permanent
allegiance should not be confused with the qualified and temporary allegiance which a
foreigner owes to the government or sovereign of the territory wherein he resides, so
long as he remains there, in return for the protection he receives, and which consists in
the obedience to the laws of the government or sovereign. (Carlisle vs. Unite States, 21
Law. ed., 429; Secretary of State Webster Report to the President of the United States in
the case of Thraser, 6 Web. Works, 526);
Considering that the absolute and permanent allegiance of the inhabitants of a territory
occupied by the enemy of their legitimate government or sovereign is not abrogated or
severed by the enemy occupation, because the sovereignty of the government or
sovereign de jure is not transferred thereby to the occupier, as we have held in the cases
of Co Kim Cham vs. Valdez Tan Keh and Dizon (75 Phil., 113) and of Peralta vs.
Director of Prisons (75 Phil., 285), and if it is not transferred to the occupant it must
necessarily remain vested in the legitimate government; that the sovereignty vested in the
titular government (which is the supreme power which governs a body politic or society
which constitute the state) must be distinguished from the exercise of the rights inherent
thereto, and may be destroyed, or severed and transferred to another, but it cannot be
suspended because the existence of sovereignty cannot be suspended without putting it
out of existence or divesting the possessor thereof at least during the so-called period of
suspension; that what may be suspended is the exercise of the rights of sovereignty with
the control and government of the territory occupied by the enemy passes temporarily to
the occupant; that the subsistence of the sovereignty of the legitimate government in a
territory occupied by the military forces of the enemy during the war, "although the
former is in fact prevented from exercising the supremacy over them" is one of the "rules
of international law of our times"; (II Oppenheim, 6th Lauterpacht ed., 1944, p. 482),
recognized, by necessary implication, in articles 23, 44, 45, and 52 of Hague Regulation;
and that, as a corollary of the conclusion that the sovereignty itself is not suspended and
subsists during the enemy occupation, the allegiance of the inhabitants to their legitimate
government or sovereign subsists, and therefore there is no such thing as suspended

allegiance, the basic theory on which the whole fabric of the petitioner's contention rests;
Considering that the conclusion that the sovereignty of the United State was suspended
in Castine, set forth in the decision in the case of United States vs. Rice, 4 Wheaton, 246,
253, decided in 1819, and quoted in our decision in the cases of Co Kim Cham vs. Valdez
Tan Keh and Dizon and Peralta vs. Director of Prisons, supra, in connection with the
question, not of sovereignty, but of the existence of a government de facto therein and its
power to promulgate rules and laws in the occupied territory, must have been based,
either on the theory adopted subsequently in the Hague Convention of 1907, that the
military occupation of an enemy territory does not transfer the sovereignty to the
occupant; that, in the first case, the word "sovereignty" used therein should be construed
to mean the exercise of the rights of sovereignty, because as this remains vested in the
legitimate government and is not transferred to the occupier, it cannot be suspended
without putting it out of existence or divesting said government thereof; and that in the
second case, that is, if the said conclusion or doctrine refers to the suspension of the
sovereignty itself, it has become obsolete after the adoption of the Hague Regulations in
1907, and therefore it can not be applied to the present case;
Considering that even adopting the words "temporarily allegiance," repudiated by
Oppenheim and other publicists, as descriptive of the relations borne by the inhabitants
of the territory occupied by the enemy toward the military government established over
them, such allegiance may, at most, be considered similar to the temporary allegiance
which a foreigner owes to the government or sovereign of the territory wherein he
resides in return for the protection he receives as above described, and does not do away
with the absolute and permanent allegiance which the citizen residing in a foreign
country owes to his own government or sovereign; that just as a citizen or subject of a
government or sovereign may be prosecuted for and convicted of treason committed in a
foreign country, in the same way an inhabitant of a territory occupied by the military
forces of the enemy may commit treason against his own legitimate government or
sovereign if he adheres to the enemies of the latter by giving them aid and comfort; and
that if the allegiance of a citizen or subject to his government or sovereign is nothing
more than obedience to its laws in return for the protection he receives, it would
necessarily follow that a citizen who resides in a foreign country or state would, on one
hand, ipso facto acquire the citizenship thereof since he has enforce public order and
regulate the social and commercial life, in return for the protection he receives, and
would, on the other hand, lose his original citizenship, because he would not be bound to
obey most of the laws of his own government or sovereign, and would not receive, while
in a foreign country, the protection he is entitled to in his own;
Considering that, as a corollary of the suspension of the exercise of the rights of
sovereignty by the legitimate government in the territory occupied by the enemy military
forces, because the authority of the legitimate power to govern has passed into the hands
of the occupant (Article 43, Hague Regulations), the political laws which prescribe the
reciprocal rights, duties and obligation of government and citizens, are suspended or in
abeyance during military occupation (Co Kim cham vs. Valdez Tan Keh and dizon,
supra), for the only reason that as they exclusively bear relation to the ousted legitimate
government, they are inoperative or not applicable to the government established by the
occupant; that the crimes against national security, such as treason and espionage;
inciting to war, correspondence with hostile country, flight to enemy's country, as well as
those against public order, such as rebellion, sedition, and disloyalty, illegal possession
of firearms, which are of political complexion because they bear relation to, and are
penalized by our Revised Penal Code as crimes against the legitimate government, are
also suspended or become inapplicable as against the occupant, because they can not be
committed against the latter (Peralta vs. Director of Prisons, supra); and that, while the
offenses against public order to be preserved by the legitimate government were
inapplicable as offenses against the invader for the reason above stated, unless adopted
by him, were also inoperative as against the ousted government for the latter was not
responsible for the preservation of the public order in the occupied territory, yet article
114 of the said Revised Penal Code, was applicable to treason committed against the
national security of the legitimate government, because the inhabitants of the occupied
territory were still bound by their allegiance to the latter during the enemy occupation;
Considering that, although the military occupant is enjoined to respect or continue in
force, unless absolutely prevented by the circumstances, those laws that enforce public
order and regulate the social and commercial life of the country, he has, nevertheless, all
the powers of de facto government and may, at his pleasure, either change the existing
laws or make new ones when the exigencies of the military service demand such action,
that is, when it is necessary for the occupier to do so for the control of the country and
the protection of his army, subject to the restrictions or limitations imposed by the Hague
Regulations, the usages established by civilized nations, the laws of humanity and the
requirements of public conscience (Peralta vs. Director of Prisons, supra; 1940 United
States Rules of Land Warfare 76, 77); and that, consequently, all acts of the military
occupant dictated within these limitations are obligatory upon the inhabitants of the
territory, who are bound to obey them, and the laws of the legitimate government which
have not been adopted, as well and those which, though continued in force, are in
conflict with such laws and orders of the occupier, shall be considered as suspended or
not in force and binding upon said inhabitants;
Considering that, since the preservation of the allegiance or the obligation of fidelity and
obedience of a citizen or subject to his government or sovereign does not demand from
him a positive action, but only passive attitude or forbearance from adhering to the
enemy by giving the latter aid and comfort, the occupant has no power, as a corollary of
the preceding consideration, to repeal or suspend the operation of the law of treason,
essential for the preservation of the allegiance owed by the inhabitants to their legitimate
government, or compel them to adhere and give aid and comfort to him; because it is
evident that such action is not demanded by the exigencies of the military service or not
necessary for the control of the inhabitants and the safety and protection of his army, and
because it is tantamount to practically transfer temporarily to the occupant their
allegiance to the titular government or sovereign; and that, therefore, if an inhabitant of
the occupied territory were compelled illegally by the military occupant, through force,
threat or intimidation, to give him aid and comfort, the former may lawfully resist and
die if necessary as a hero, or submit thereto without becoming a traitor;
Considering that adoption of the petitioner's theory of suspended allegiance would lead
to disastrous consequences for small and weak nations or states, and would be repugnant
to the laws of humanity and requirements of public conscience, for it would allow
invaders to legally recruit or enlist the Quisling inhabitants of the occupied territory to
fight against their own government without the latter incurring the risk of being
prosecuted for treason, and even compel those who are not aid them in their military
operation against the resisting enemy forces in order to completely subdue and conquer
the whole nation, and thus deprive them all of their own independence or sovereignty
such theory would sanction the action of invaders in forcing the people of a free and
sovereign country to be a party in the nefarious task of depriving themselves of their own
freedom and independence and repressing the exercise by them of their own sovereignty;
in other words, to commit a political suicide;
(2) Considering that the crime of treason against the government of the Philippines
defined and penalized in article 114 of the Penal Code, though originally intended to be a
crime against said government as then organized by authority of the sovereign people of
the United States, exercised through their authorized representative, the Congress and the
President of the United States, was made, upon the establishment of the Commonwealth
Government in 1935, a crime against the Government of the Philippines established by
authority of the people of the Philippines, in whom the sovereignty resides according to
section 1, Article II, of the Constitution of the Philippines, by virtue of the provision of
section 2, Article XVI thereof, which provides that "All laws of the Philippine
Islands . . . shall remain operative, unless inconsistent with this Constitution . . . and all
references in such laws to the Government or officials of the Philippine Islands, shall be
construed, in so far as applicable, to refer to the Government and corresponding officials
under this constitution;
Considering that the Commonwealth of the Philippines was a sovereign government,
though not absolute but subject to certain limitations imposed in the Independence Act
and incorporated as Ordinance appended to our Constitution, was recognized not only by
the Legislative Department or Congress of the United States in approving the
Independence Law above quoted and the Constitution of the Philippines, which contains
the declaration that "Sovereignty resides in the people and all government authority
emanates from them" (section 1, Article II), but also by the Executive Department of the
United States; that the late President Roosevelt in one of his messages to Congress said,
among others, "As I stated on August 12, 1943, the United States in practice regards the
Philippines as having now the status as a government of other independent nations in
fact all the attributes of complete and respected nationhood" (Congressional Record, Vol.
29, part 6, page 8173); and that it is a principle upheld by the Supreme Court of the
United States in many cases, among them in the case of Jones vs. United States (137
U.S., 202; 34 Law. ed., 691, 696) that the question of sovereignty is "a purely political
question, the determination of which by the legislative and executive departments of any
government conclusively binds the judges, as well as all other officers, citizens and
subjects of the country.
Considering that section I (1) of the Ordinance appended to the Constitution which
provides that pending the final and complete withdrawal of the sovereignty of the United
States "All citizens of the Philippines shall owe allegiance to the United States", was one
of the few limitations of the sovereignty of the Filipino people retained by the United
States, but these limitations do not away or are not inconsistent with said sovereignty, in
the same way that the people of each State of the Union preserves its own sovereignty
although limited by that of the United States conferred upon the latter by the States; that
just as to reason may be committed against the Federal as well as against the State
Government, in the same way treason may have been committed during the Japanese
occupation against the sovereignty of the United States as well as against the sovereignty
of the Philippine Commonwealth; and that the change of our form of government from
Commonwealth to Republic does not affect the prosecution of those charged with the
crime of treason committed during the Commonwealth, because it is an offense against
the same government and the same sovereign people, for Article XVIII of our
Constitution provides that "The government established by this constitution shall be
known as the Commonwealth of the Philippines. Upon the final and complete
withdrawal of the sovereignty of the United States and the proclamation of Philippine
independence, the Commonwealth of the Philippines shall thenceforth be known as the

Republic of the Philippines";
This Court resolves, without prejudice to write later on a more extended opinion, to deny
the petitioner's petition, as it is hereby denied, for the reasons above set forth and for
others to be stated in the said opinion, without prejudice to concurring opinion therein, if
any. Messrs. Justices Paras and Hontiveros dissent in a separate opinion. Mr. justice
Perfecto concurs in a separate opinion.
G.R. No. L-533
August 20, 1946
RAMON RUFFY, ET AL., petitioners,

vs.
THE CHIEF OF STAFF, PHILIPPINE ARMY, ET AL., respondents.
Placido C. Ramos for petitioners.
Lt. Col. Fred Ruiz Castro and Capt. Ramon V. Diaz, JAGS, PA., for respondents.
TUASON, J.:
This was a petition for prohibition, praying that the respondents, the Chief of Staff and the
General Court Martial of the Philippine Army, be commanded to desist from further proceedings
in the trial of petitioners before that body. Preliminary injunction having been denied by us and
the General Court Martial having gone ahead with the trial, which eventually resulted in the
acquittal of one of the defendants, Ramon Ruffy, the dismissal of the case as to another,
Victoriano Dinglasan, and the conviction of Jose L. Garcia, Prudente M. Francisco, Dominador
Adeva and Andres Fortus, the last-named four petitioners now seek in their memorandum to
convert the petition into one for certiorari, with the prayer that the records of the proceedings
before the General Court Martial be ordered certified to this court for review.
The ground of the petition was that the petitioners were not subject to military law at the time
the offense for which they had been placed on trial was committed. In their memorandum they
have raised an additional question of law that the 93d Article of War is unconstitutional.
An outline of the petitioner's previous connection with the Philippine Army, the Philippine
Constabulary, and/or with guerrilla organizations will presently be made. This outline is based
on allegations in the petition and the answer, and on exhibits attached thereto and to the parties'
memoranda, exhibits which were offered in the course of the oral argument and admitted
without objection. The said exhibits are public documents certified by the officials who had
them in custody in their official capacity. They are presumed to be authentic, as we have no
doubt they are.
It appears that at the outbreak of war on December 8, 1941, Ramon Ruffy was the Provincial
Commander, Prudente M. Francisco, a junior officer, and Andres Fortus, a corporal, all of the
Philippine Constabulary garrison stationed in Mindoro. When, on February 27, 1942, the
Japanese forces landed in Mindoro, Major Ruffy retreated to the mountains instead of
surrendering to the enemy, disbanded his company, and organized and led a guerrilla outfit
known as Bolo Combat team of Bolo Area. Lieutenant Francisco, Corporal Fortus and Jose L.
Garcia, the last then a civilian joined Major Ruffy's organization towards the latter part of 1942,
while Dominador Adeva and Victoriano Dinglasan, then likewise civilians, became its members
some time in 1943..
Meanwhile, Brigadier General Macario Peralta, Jr., then a lieutenant colonel of the Philippine
Army, also took to the hills of Panay and led the operation of the 6th Military District, one of the
districts into which the Philippine Army had been divided before the war. About November,
1942, Colonel Peralta succeeded in contacting the General Headquarters of General MacArthur
in Australia as the result of which on February 13, 1943, the 6th Military District was recognized
by the Headquarters of the Southwest Pacific Area as a military unit and part of its command.
Even before General MacArthur's recognition of the 6th Military District Colonel Peralta had
extended its sphere of operation to comprise Mindoro and Marinduque, and had, on January 2,
1943, named Major Ruffy as Acting Commander for those two provinces and Commanding
Officer of the 3rd Battalion, 66 Infantry 61st Division, Philippine Corps. After the recognition,
2d Lieut. Prudente M. Francisco, by virtue of Special Orders No. 99, dated November 2, 1943,
and signed by Enrique L. Jurado, Major, OSE, Commanding, was assigned as S-3 in the Bolo
Area. Major, later Lieut. Col., Jurado, it should be noted, had been dispatched by the 6th
Military District to Mindoro to assume operational control supervision over the Bolo Area unit
and to make and direct the necessary report to the Headquarters, 6th Military District, in Panay.
On April 26, 1944, by General Orders No. 40 of the 6th Military District, 2d Lieutenant
Francisco was promoted to the rank of 1st Lieutenant (Brevet), effective April 15, 1944, subject
to approval by the President of the Philippines, and was re-assigned to the Bolo Area. As to
Andres Fortus he was assigned to the same Bolo Area as probationary 3d lieutenant for twomonth probationary training, by the Headquarters of the 6th Military District, as per Special
Orders No. 70, dated May 15, 1944.
According to a memorandum of the Chief of Staff, 6th Military District, dated January 1943, and
signed by L.R. Relunia, Lieut. Col., CE, Chief of Staff, Jose L. Garcia and Dominador Adeva
were appointed 3d lieutenants, infantry as of December 31, 1942. Garcia later was promoted to
the rank of captain, effective March 15, 1943, as per Special Orders No. 82, issued in the field,
6th Military District, and dated August 28, 1943. On May 24, 1943, Jose L. Garcia took his oath
before Captain Esteban P. Beloncio, then Acting Commanding Officer, 3d Battalion, 66th
Infantry Regiment, 61st Division, 6th Military District.
As has been said, the 6th Military District sent Lieut. Col. Enrique L. Jurado to be Commanding
Officer of the Bolo Combat Team in Mindoro and to undertake other missions of Military
character. Pursuant to instructions, Colonel Jurado on November 2, 1943, assigned Major Ruffy
as Commanding Officer of the Bolo Area with 3d Lieut. Dominador Adeva and 2d Lieut.
Prudente M. Francisco as members of his staff and Victoriano Dinglasan as Finance Officer, as
per Special Orders No. 99 dated November 2, 1943. In a memorandum of Colonel Jurado for
Major Ruffy bearing date 25 June, 1944, it was stated that Captain Garcia had been given
P5,000 for palay and Lieut. Francisco P9,000, P5,000 for palay and P4,000 for salary of the
personnel B. Company.
A change in the command of the Bolo Area was effected by Colonel Jurado on June 8, 1944:
Major Ruffy was relieved of his assignment as Commanding Officer, Bolo Battalion, and Capt.
Esteban P. Beloncio was put in Ruffy's place. On October 19, 1944, Lieut. Col. Jurado was slain
allegedly by the petitioners. After the commission of this crime, the petitioners, it is alleged,
seceded from the 6th Military District. It was this murder which gave rise to petitioner's trial, the
legality of which is now being contested.
On July 26, 1941, the President of the Untied States issued a military order the pertinent
paragraph of which stated: ". . . as Commander in Chief of the Army and Navy of the United
States, I hereby call and order into the service of the armed forces of the United States Army, for
the period of the existing emergency, and place under the command of the general officer,
United States Army, to be designated by the Secretary of War, from time to time, all of the
organized military forces of the Government of the Commonwealth." Following the issuance of
President Roosevelt's order General Douglas MacArthur was appointed Commanding General of
the United States Armed Forces in the Far East.
It is contended, in behalf of Captain Francisco and Lieutenant Fortus, that "by the enemy
occupation of the Philippines, the National Defense Act and all laws and regulations creating
and governing the existence of the Philippine Army including the Articles of War, were
suspended and in abeyance during such belligerent occupation."
The paragraph quoted in the petitioner's memorandum from Winthrop's Military Law and
Precedents and the subsequent paragraph which has been omitted furnish a complete answer to
petitioner's contention of the Philippines by Japanese forces, the officers and men of the
Philippine Army did not cease to be fully in the service, though in a measure,' only in a measure,
they were not subject to the military jurisdiction, if they were not active duty. In the latter case,
like officers and soldiers on leave of absence or held as prisoners of war, they could not be held
guilty of a breach of the discipline of the command or of a neglect of duty, or disobedience of
orders, or mutiny, or subject to a military trial therefor; but for an act unbecoming an officer and
a gentleman, or an act which constitutes an offense of the class specified in the 95th Article of
War, they may in general be legally held subject to military jurisdiction and trial. "So a prisoner
of war, though not subject, while held by the enemy, to the discipline of his own army, would,
when exchanged of paroled, be not exempt from liability for such offenses as criminal acts or
injuriuos conduct committed during his captivity against other officers or soldiers in the same
status." (Winthrop's Military Law and Precedents, 2d Edition, pp. 91, 92.)
The rule invoked by counsel, namely, that laws of political nature or affecting political relations
are considered superseded or in abeyance during the military occupation, is intended for the
governing of the civil inhabitants of the occupied territory. It is not intended for and does not
bind the enemies in arms. This is self-evident from the very nature of things. The paradox of a
contrary ruling should readily manifest itself. Under the petitioner's theory the forces of
resistance operating in an occupied territory would have to abide by the outlawing of their own
existence. They would be stripped of the very life-blood of an army, the right and the ability to
maintain order and discipline within the organization and to try the men guilty of breach thereof.
The surrender by General Wainright of the Fil-American Forces does not profit the petitioner's
who were former members of the Philippine Constabulary any more than does the rule of war or
international law they cite. The fall of Bataan and Corregidor did not end the war. It did not,
legally or otherwise, keep the United States and the Commonwealth of the Philippines from
organizing a new army, regular or irregular, out of new men and men in the old service who had
refused to surrender or who having surrendered, had decided to carry on the fight through other
diverse means and methods. The fall of Corregidor and Bataan just marked the beginning of the
gigantic preparation for the gigantic drive that was to fight its way to and beyond the Philippines
in fulfillment of General MacArthur's classic promise, "I shall return." The heroic role which the
guerrillas played in that preparation and in the subsequent liberation of the Philippines is now
history.
Independently of their previous connection with the Philippine Army and the Philippine
Constabulary, Captain Francisco and Lieutenant Fortus as well as Major Garcia and Lieutenant
Adeva were subject to military jurisdiction.
The 2d Article of War defines and enumerates the persons subject to military law as follows:
Art. 2. Persons Subject to Military Law. The following persons are subject to these
articles and shall be understood as included in the term "any person subject to military
law" or "persons subject to military law," whenever used in these articles:
(a) All officers, members of the Nurse Corps and soldiers belonging to the Regular Force
of the Philippine Army; all reservists, from the dates of their call to active duty and while
on such active duty; all trainees undergoing military instructions; and all other persons
lawfully called, drafted, or order to obey the same;
(b) Cadets, flying cadets, and probationary third lieutenants;
(c) All retainers to the camp and all persons accompanying or serving with the Army of
the Philippines in the field in time of war or when martial law is declared though not
otherwise subject to these articles;
(d) All persons under sentences adjudged by courts-martial.
It is our opinion that the petitioners come within the general application of the clause in subparagraph (a); "and all other persons lawfully called, drafted, or ordered into, or to duty for
training in, the said service, from the dates they are required by the terms of the call, draft, or
order to obey the same." By their acceptance of appointments as officers in the Bolo Area from
the General Headquarters of the 6th Military District, they became members of the Philippine
Army amendable to the Articles of War. The Bolo Area, as has been seen, was a contigent of the
6th Military District which, as has also been pointed out, had been recognized by and placed
under the operational control of the United States Army in the Southwest Pacific. The Bolo Area
received supplies and funds for the salaries of its officers and men from the Southwest Pacific
Command. As officers in the Bolo Area and the 6th Military District, the petitioners operated
under the orders of duly established and duly appointed commanders of the United States Army.
The attitude of the enemy toward underground movements did not affect the military status of
guerrillas who had been called into the service of the Philippine Army. If the invaders refused to
look upon guerrillas, without distinctions, as legitimate troops, that did not stop the guerillas
who had been inducted into the service of the Philippine Army from being component parts
thereof, bound to obey military status of guerrillas was to be judged not by the concept of the
army of the country for which they fought.
The constitutionality of the 93d Article of War is assailed. This article ordains "that any person
subject to military law who commits murder in time of was shall suffer death or imprisonment
for life, as the court martial may direct." It is argued that since "no review is provided by that
law to be made by the Supreme Court, irrespective of whether the punishment is for life
imprisonment or death", it violates Article VIII, section 2, paragraph 4, of the Constitution of the
Philippines which provides that "the National Assembly may not deprive the Supreme Court of
its original jurisdiction over all criminal cases in which the penalty imposed is death or life
imprisonment."
We think the petitioners are in error. This error arose from failure to perceive the nature of courts
martial and the sources of the authority for their creation.
Courts martial are agencies of executive character, and one of the authorities "for the ordering of
courts martial has been held to be attached to the constitutional functions of the President as
Commander in Chief, independently of legislation." (Winthrop's Military Law and Precedents,
2d Edition, p. 49.) Unlike courts of law, they are not a portion of the judiciary. "The Supreme
Court of the United States referring to the provisions of the Constitution authorizing Congress to
provide for the government of the army, excepting military offenses from the civil jurisdiction,
and making the President Commander in Chief, observes as follows: "These provisions show
that Congress has the power to provide for the trial and punishment of military and naval
offenses in the manner then and now practiced by civilized nations, and that the power to do so
is given without any connection between it and the 3d Article of the United States; indeed that
the two powers are entirely independent of each other."
"Not belonging to the judicial branch of the government, it follows that courts-martial must
pertain to the executive department; and they are in fact simply instrumentalities of the
executive power, provided by Congress for the President as Commander in Chief, to aid him in
properly commanding the army and navy and enforcing discipline therein, and utilized under his
orders or those of his authorized military representatives." (Winthrop's Military Law and
Precedents, 2d Edition, p. 49.) Of equal interest Clode, 2 M. F., 361, says of these courts in the
British law: "It must never be lost sight of that the only legitimate object of military tribunals is
to aid the Crown to maintain the discipline and government of the Army." (Footnote No. 24, p.
49, Winthrop's Military Law and Precedents, 2d Edition.)
Our conclusion, therefore, is that the petition has no merit and that it should be dismissed with
costs. It is so ordered.
Moran, C.J., Paras, Feria, Pablo, Hilado, Bengzon, Briones and Padilla, JJ., concur.
G.R. No. L-46930 June 10, 1988

DALE SANDERS, AND A.S. MOREAU, JR, petitioners,
vs.
HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First Instance
of Zambales, Olongapo City, ANTHONY M. ROSSI and RALPH L. WYERS, respondents.
CRUZ, J.:
The basic issue to be resolved in this case is whether or not the petitioners were performing their
official duties when they did the acts for which they have been sued for damages by the private
respondents. Once this question is decided, the other answers will fall into place and this petition
need not detain us any longer than it already has.
Petitioner Sanders was, at the time the incident in question occurred, the special services director
of the U.S. Naval Station (NAVSTA) in Olongapo City. 1 Petitioner Moreau was the
commanding officer of the Subic Naval Base, which includes the said station. 2 Private
respondent Rossi is an American citizen with permanent residence in the Philippines, 3 as so was
private respondent Wyer, who died two years ago. 4 They were both employed as gameroom
attendants in the special services department of the NAVSTA, the former having been hired in
1971 and the latter in 1969. 5
On October 3, 1975, the private respondents were advised that their employment had been
converted from permanent full-time to permanent part-time, effective October 18, 1975. 6 Their
reaction was to protest this conversion and to institute grievance proceedings conformably to the
pertinent rules and regulations of the U.S. Department of Defense. The result was a
recommendation from the hearing officer who conducted the proceedings for the reinstatement
of the private respondents to permanent full-time status plus backwages. The report on the
hearing contained the observation that "Special Services management practices an autocratic
form of supervision." 7
In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the complaint),
Sanders disagreed with the hearing officer's report and asked for the rejection of the abovestated
recommendation. The letter contained the statements that: a ) "Mr. Rossi tends to alienate most
co-workers and supervisors;" b) "Messrs. Rossi and Wyers have proven, according to their
immediate supervisors, to be difficult employees to supervise;" and c) "even though the
grievants were under oath not to discuss the case with anyone, (they) placed the records in
public places where others not involved in the case could hear."
On November 7, 1975, before the start of the grievance hearings, a-letter (Annex "B" of the
complaint) purportedly corning from petitioner Moreau as the commanding general of the U.S.
Naval Station in Subic Bay was sent to the Chief of Naval Personnel explaining the change of
the private respondent's employment status and requesting concurrence therewith. The letter did
not carry his signature but was signed by W.B. Moore, Jr. "by direction," presumably of Moreau.
On the basis of these antecedent facts, the private respondent filed in the Court of First Instance
of Olongapo City a for damages against the herein petitioners on November 8, 1976. 8 The
plaintiffs claimed that the letters contained libelous imputations that had exposed them to
ridicule and caused them mental anguish and that the prejudgment of the grievance proceedings
was an invasion of their personal and proprietary rights.
The private respondents made it clear that the petitioners were being sued in their private or
personal capacity. However, in a motion to dismiss filed under a special appearance, the
petitioners argued that the acts complained of were performed by them in the discharge of their
official duties and that, consequently, the court had no jurisdiction over them under the doctrine
of state immunity.
After extensive written arguments between the parties, the motion was denied in an order dated
March 8, 1977, 9 on the main ground that the petitioners had not presented any evidence that
their acts were official in nature and not personal torts, moreover, the allegation in the complaint
was that the defendants had acted maliciously and in bad faith. The same order issued a writ of
preliminary attachment, conditioned upon the filing of a P10,000.00 bond by the plaintiffs,
against the properties of petitioner Moreau, who allegedly was then about to leave the
Philippines. Subsequently, to make matters worse for the defendants, petitioner Moreau was
declared in a default by the trial court in its order dated August 9, 1977. The motion to lift the
default order on the ground that Moreau's failure to appear at the pre-trial conference was the
result of some misunderstanding, and the motion for reconsideration of the denial of the motion
to dismiss, which was filed by the petitioner's new lawyers, were denied by the respondent court
on September 7, 1977.
This petition for certiorari, prohibition and preliminary injunction was thereafter filed before
this Court, on the contention that the above-narrated acts of the respondent court are tainted with
grave abuse of discretion amounting to lack of jurisdiction.
We return now to the basic question of whether the petitioners were acting officially or only in
their private capacities when they did the acts for which the private respondents have sued them
for damages.
It is stressed at the outset that the mere allegation that a government functionary is being sued in
his personal capacity will not automatically remove him from the protection of the law of public
officers and, if appropriate, the doctrine of state immunity. By the same token, the mere
invocation of official character will not suffice to insulate him from suability and liability for an
act imputed to him as a personal tort committed without or in excess of his authority. These
well-settled principles are applicable not only to the officers of the local state but also where the
person sued in its courts pertains to the government of a foreign state, as in the present case.
The respondent judge, apparently finding that the complained acts were prima facie personal
and tortious, decided to proceed to trial to determine inter alia their precise character on the
strength of the evidence to be submitted by the parties. The petitioners have objected, arguing
that no such evidence was needed to substantiate their claim of jurisdictional immunity. Pending
resolution of this question, we issued a temporary restraining order on September 26, 1977, that
has since then suspended the proceedings in this case in the court a quo.
In past cases, this Court has held that where the character of the act complained of can be
determined from the pleadings exchanged between the parties before the trial, it is not necessary
for the court to require them to belabor the point at a trial still to be conducted. Such a
proceeding would be superfluous, not to say unfair to the defendant who is subjected to
unnecessary and avoidable inconvenience.
Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint against the commanding
general of the Olongapo Naval Base should not have been denied because it had been
sufficiently shown that the act for which he was being sued was done in his official capacity on
behalf of the American government. The United States had not given its consent to be sued. It
was the reverse situation in Syquia v. Almeda Lopez," where we sustained the order of the lower
court granting a where we motion to dismiss a complaint against certain officers of the U.S.
armed forces also shown to be acting officially in the name of the American government. The
United States had also not waived its immunity from suit. Only three years ago, in United States
of America v. Ruiz, 12 we set aside the denial by the lower court of a motion to dismiss a
complaint for damages filed against the United States and several of its officials, it appearing
that the act complained of was governmental rather than proprietary, and certainly not personal.
In these and several other cases 13 the Court found it redundant to prolong the other case
proceedings after it had become clear that the suit could not prosper because the acts complained
of were covered by the doctrine of state immunity.
It is abundantly clear in the present case that the acts for which the petitioners are being called to
account were performed by them in the discharge of their official duties. Sanders, as director of
the special services department of NAVSTA, undoubtedly had supervision over its personnel,
including the private respondents, and had a hand in their employment, work assignments,
discipline, dismissal and other related matters. It is not disputed that the letter he had written was
in fact a reply to a request from his superior, the other petitioner, for more information regarding
the case of the private respondents. 14 Moreover, even in the absence of such request, he still was
within his rights in reacting to the hearing officer's criticismin effect a direct attack against
him-that Special Services was practicing "an autocratic form of supervision."
As for Moreau,what he is claimed to have done was write the Chief of Naval Personnel for
concurrence with the conversion of the private respondents' type of employment even before the
grievance proceedings had even commenced. Disregarding for the nonce the question of its
timeliness, this act is clearly official in nature, performed by Moreau as the immediate superior
of Sanders and directly answerable to Naval Personnel in matters involving the special services
department of NAVSTA In fact, the letter dealt with the financial and budgetary problems of the
department and contained recommendations for their solution, including the re-designation of
the private respondents. There was nothing personal or private about it.
Given the official character of the above-described letters, we have to conclude that the
petitioners were, legally speaking, being sued as officers of the United States government. As
they have acted on behalf of that government, and within the scope of their authority, it is that
government, and not the petitioners personally, that is responsible for their acts. Assuming that
the trial can proceed and it is proved that the claimants have a right to the payment of damages,
such award will have to be satisfied not by the petitioners in their personal capacities but by the
United States government as their principal. This will require that government to perform an
affirmative act to satisfy the judgment, viz, the appropriation of the necessary amount to cover
the damages awarded, thus making the action a suit against that government without its consent.
There should be no question by now that such complaint cannot prosper unless the government
sought to be held ultimately liable has given its consent to' be sued. So we have ruled not only in
Baer but in many other decisions where we upheld the doctrine of state immunity as applicable
not only to our own government but also to foreign states sought to be subjected to the
jurisdiction of our courts. 15
The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right
against the authority which makes the law on which the right depends. 16 In the case of foreign
states, the rule is derived from the principle of the sovereign equality of states which wisely
admonishes that par in parem non habet imperium and that a contrary attitude would "unduly
vex the peace of nations." 17 Our adherence to this precept is formally expressed in Article II,
Section 2, of our Constitution, where we reiterate from our previous charters that the Philippines
"adopts the generally accepted principles of international law as part of the law of the land.
All this is not to say that in no case may a public officer be sued as such without the previous
consent of the state. To be sure, there are a number of well-recognized exceptions. It is clear that
a public officer may be sued as such to compel him to do an act required by law, as where, say, a
register of deeds refuses to record a deed of sale; 18 or to restrain a Cabinet member, for example,
from enforcing a law claimed to be unconstitutional; 19 or to compel the national treasurer to pay
damages from an already appropriated assurance fund; 20 or the commissioner of internal
revenue to refund tax over-payments from a fund already available for the purpose; 21 or, in
general, to secure a judgment that the officer impleaded may satisfy by himself without the
government itself having to do a positive act to assist him. We have also held that where the
government itself has violated its own laws, the aggrieved party may directly implead the
government even without first filing his claim with the Commission on Audit as normally
required, as the doctrine of state immunity "cannot be used as an instrument for perpetrating an
injustice." 22
This case must also be distinguished from such decisions as Festejo v. Fernando, 23 where the
Court held that a bureau director could be sued for damages on a personal tort committed by him
when he acted without or in excess of authority in forcibly taking private property without
paying just compensation therefor although he did convert it into a public irrigation canal. It was
not necessary to secure the previous consent of the state, nor could it be validly impleaded as a
party defendant, as it was not responsible for the defendant's unauthorized act.
The case at bar, to repeat, comes under the rule and not under any of the recognized exceptions.
The government of the United States has not given its consent to be sued for the official acts of
the petitioners, who cannot satisfy any judgment that may be rendered against them. As it is the
American government itself that will have to perform the affirmative act of appropriating the
amount that may be adjudged for the private respondents, the complaint must be dismissed for
lack of jurisdiction.
The Court finds that, even under the law of public officers, the acts of the petitioners are
protected by the presumption of good faith, which has not been overturned by the private
respondents. Even mistakes concededly committed by such public officers are not actionable as
long as it is not shown that they were motivated by malice or gross negligence amounting to bad
faith. 24 This, to, is well settled . 25 Furthermore, applying now our own penal laws, the letters
come under the concept of privileged communications and are not punishable, 26 let alone the
fact that the resented remarks are not defamatory by our standards. It seems the private
respondents have overstated their case.
A final consideration is that since the questioned acts were done in the Olongapo Naval Base by
the petitioners in the performance of their official duties and the private respondents are
themselves American citizens, it would seem only proper for the courts of this country to refrain
from taking cognizance of this matter and to treat it as coming under the internal administration
of the said base.
The petitioners' counsel have submitted a memorandum replete with citations of American cases,
as if they were arguing before a court of the United States. The Court is bemused by such
attitude. While these decisions do have persuasive effect upon us, they can at best be invoked
only to support our own jurisprudence, which we have developed and enriched on the basis of
our own persuasions as a people, particularly since we became independent in 1946.
We appreciate the assistance foreign decisions offer us, and not only from the United States but
also from Spain and other countries from which we have derived some if not most of our own
laws. But we should not place undue and fawning reliance upon them and regard them as
indispensable mental crutches without which we cannot come to our own decisions through the
employment of our own endowments We live in a different ambience and must decide our own
problems in the light of our own interests and needs, and of our qualities and even idiosyncrasies
as a people, and always with our own concept of law and justice.
The private respondents must, if they are still sominded, pursue their claim against the
petitioners in accordance with the laws of the United States, of which they are all citizens and
under whose jurisdiction the alleged offenses were committed. Even assuming that our own laws
are applicable, the United States government has not decided to give its consent to be sued in
our courts, which therefore has not acquired the competence to act on the said claim,.
WHEREFORE, the petition is GRANTED. The challenged orders dated March 8,1977, August
9,1977, and September 7, 1977, are SET ASIDE. The respondent court is directed to DISMISS
Civil Case No. 2077-O. Our Temporary restraining order of September 26,1977, is made
PERMANENT. No costs.
SO ORDERED.
Narvasa, Gancayco, Grino-Aquio and Medialdea, JJ., Concur.
G.R. No. 84607 March 19, 1993

REPUBLIC OF THE PHILIPPINES, GEN. RAMON MONTANO, GEN. ALFREDO LIM,
GEN. ALEXANDER AGUIRRE, COL. EDGAR DULA TORRES, COL. CEZAR
NAZARENO, MAJ. FILEMON GASMEN, PAT. NICANOR ABANDO, PFC SERAFIN
CEBU, JR., GEN. BRIGIDO PAREDES, COL. ROGELIO MONFORTE, PFC ANTONIO
LUCERO, PAT. JOSE MENDIOLA, PAT. NELSON TUASON, POLICE CORPORAL
PANFILO ROGOS, POLICE LT. JUAN B. BELTRAN, PAT. NOEL MANAGBAO, MARINE
THIRD CLASS TRAINEE (3CT) NOLITO NOGATO, 3CT ALEJANDRO B. NAGUIO, JR.,
EFREN ARCILLAS, 3CT AGERICO LUNA, 3CT BASILIO BORJA, 3CT MANOLITO
LUSPO, 3CT CRISTITUTO GERVACIO, 3CT MANUEL DELA CRUZ, JR., MARINE (CDC)
BN., (CIVIL DISTURBANCE CONTROL), MOBILE DISPERSAL TEAM (MDT), LT.
ROMEO PAQUINTO, LT. LAONGLAANG GOCE, MAJ. DEMETRIO DE LA CRUZ,
POLICE CAPTAIN RODOLFO NAVAL, JOHN DOE, RICHARD DOE, ROBERTO DOE
AND OTHER DOES, petitioners,
vs.
HON. EDILBERTO G. SANDOVAL, Regional Trial Court of Manila, Branch IX, ERLINDA C.
CAYLAO, ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO,
ELMA GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM, PURITA YUMUL,
MIGUEL ARABE, TERESITA ARJONA, RONALDO CAMPOMANES AND CARMENCITA
ARDONI VDA. DE CAMPOMANES, ROGELIO DOMUNICO, in their capacity as heirs of
the deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ, DIONESIO BAUTISTA,
DANTE EVANGELIO, ADELFA ARIBE, DANILO ARJONA, VICENTE CAMPOMANES,
RONILO DOMUNICO) respectively; and (names of sixty-two injured victims) EDDIE
AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE
MENSOLA, ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ,
HONORIO LABAMBA, JR., EFREN MACARAIG, SOLOMON MANALOTO, ROMEO
DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY CLEMENTE, GERARDO COYOCA,
LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR FONTANILLA, WILSON GARCIA,
CARLOS SIRAY, JOSE PERRAS, TOMAS VALLOS, ARNOLD ENAJE, MARIANITA
DIMAPILIS, FRANCISCO ANGELES, MARCELO ESGUERRA, JOSE FERRER, RODEL
DE GUIA, ELVIS MENDOZA, VICTORIANO QUIJANO, JOEY ADIME, RESIENO ADUL,
ALBERTO TARSONA, CARLOS ALCANTARA, MAMERTO ALIAS, EMELITO
ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO CABALLES, JR.,
JAIME CALDETO, FABIAN CANTELEJO, RODRIGO CARABARA, ENRIQUE
DELGADO, JUN DELOS SANTOS, MARIO DEMASACA, FRANCISCO GONZALES,
ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA, PERLITO SALAYSAY,
JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI, REMIGIO
MAHALIN, BONG MANLULO, ARMANDO MATIENZO, CARLO MEDINA, LITO
NOVENARIO, and ROSELLA ROBALE, respondents.
G.R. No. 84645 March 19, 1993
ERLINDA C. CAYLAO, ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA
EVANGELIO, ELMA GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM,
PURITA YUMUL, MIGUEL ARABE, TERESITA ARJONA, RONALDO CAMPOMANES
AND CARMENCITA ARDONI VDA. DE CAMPOMANES, ROGELIO DOMUNICO, in their
capacity as heirs of the deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ,
DIONESIO GRAMPA, ANGELITO GUTIERREZ, BERNABE LAKINDANUM, ROBERTO
YUMUL, LEOPOLDO ALONZO, ADELFA ARIBE, DANILO ARJONA, VICENTE
CAMPOMANES, RONILO DOMUNICO) respectively; and (names of sixty-two injured
victims) EDDIE AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO

CRUZ, EDDIE MENSOLA, ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO,
JOY CRUZ, HONORIO LABAMBA, JR. EFREN MACARAIG, SOLOMON MANALOTO,
ROMEO DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY CLEMENTE, GERARDO
COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR FONTANILLA, WILSON
GARCIA, CARLOS SIRAY, JOSE PERRAS TOMAS VALLOS, ARNOLD ENAJE,
MARIANITA DIMAPILIS, FRANCISCO ANGELES, MARCELO ESGUERRA, JOSE
FERRER, RODEL DE GUIA, ELVIS MENDOZA, VICTORINO QUIJANO, JOEY ADIME,
RESIENO ADUL, ALBERTO TARSONA, CARLOS ALCANTARA, MAMERTO ALIAS,
EMELITO ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO
CABALLES, JR., JAIME CALDETO, FABIAN CANTELEJO, RODRIGO CARABARA,
ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO DEMASACA, FRANCISCO
GONZALES, ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA, PERLITO
SALAYSAY, JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI,
REMIGIO MAHALIN, BONG MANLULO, ARMANDO MATIENZO, CARLO MEDINA,
LITO NOVENARIO, ROSELLA ROBALE, petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, and HONORABLE EDILBERTO G. SANDOVAL,
Regional Trial Court of Manila, Branch 9, respondents.
The Solicitor General for the Republic of the Philippines.
Structural Alternative Legal Assistance for Grassroots for petitioners in 84645 & private
respondents in 84607.
CAMPOS, JR., J.:

People may have already forgotten the tragedy that transpired on January 22, 1987. It is quite
ironic that then, some journalists called it a Black Thursday, as a grim reminder to the nation of
the misfortune that befell twelve (12) rallyists. But for most Filipinos now, the Mendiola
massacre may now just as well be a chapter in our history books. For those however, who have
become widows and orphans, certainly they would not settle for just that. They seek retribution
for the lives taken that will never be brought back to life again.
Hence, the heirs of the deceased, together with those injured (Caylao group), instituted this
petition, docketed as G.R. No. 84645, under Section 1 of Rule 65 of the Rules of Court, seeking
the reversal and setting aside of the Orders of respondent Judge Sandoval, 1 dated May 31 and
August 8, 1988, dismissing the complaint for damages of herein petitioners against the Republic
of the Philippines in Civil Case No. 88-43351.
Petitioner, the Republic of the Philippines, through a similar remedy, docketed as G.R. No.
84607, seeks to set aside the Order of respondent Judge dated May 31, 1988, in Civil Case No.
88-43351 entitled "Erlinda Caylao, et al. vs. Republic of the Philippines, et al."
The pertinent portion of the questioned Order 2 dated May 31, 1988, reads as follows:
With respect however to the other defendants, the impleaded Military Officers,
since they are being charged in their personal and official capacity, and holding
them liable, if at all, would not result in financial responsibility of the
government, the principle of immunity from suit can not conveniently and
correspondingly be applied to them.
WHEREFORE, the case as against the defendant Republic of the Philippines is
hereby dismissed. As against the rest of the defendants the motion to dismiss is
denied. They are given a period of ten (10) days from receipt of this order within
which to file their respective pleadings.
On the other hand, the Order 3, dated August 8, 1988, denied the motions filed by both parties,
for a reconsideration of the abovecited Order, respondent Judge finding no cogent reason to
disturb the said order.
The massacre was the culmination of eight days and seven nights of encampment by members of
the militant Kilusang Magbubukid sa Pilipinas (KMP) at the then Ministry (now Department) of
Agrarian Reform (MAR) at the Philippine Tobacco Administration Building along Elliptical
Road in Diliman, Quezon City.
The farmers and their sympathizers presented their demands for what they called "genuine
agrarian reform". The KMP, led by its national president, Jaime Tadeo, presented their problems
and demands, among which were: (a) giving lands for free to farmers; (b) zero retention of lands
by landlords; and (c) stop amortizations of land payments.
The dialogue between the farmers and the MAR officials began on January 15, 1987. The two
days that followed saw a marked increase in people at the encampment. It was only on January
19, 1987 that Jaime Tadeo arrived to meet with then Minister Heherson Alvarez, only to be
informed that the Minister can only meet with him the following day. On January 20, 1987, the
meeting was held at the MAR conference room. Tadeo demanded that the minimum
comprehensive land reform program be granted immediately. Minister Alvarez, for his part, can
only promise to do his best to bring the matter to the attention of then President Aquino, during
the cabinet meeting on January 21, 1987.
Tension mounted the following day. The farmers, now on their seventh day of encampment,
barricaded the MAR premises and prevented the employees from going inside their offices.
They hoisted the KMP flag together with the Philippine flag.
At around 6:30 p.m. of the same day, Minister Alvarez, in a meeting with Tadeo and his leaders,
advised the latter to instead wait for the ratification of the 1987 Constitution and just allow the
government to implement its comprehensive land reform program. Tadeo, however, countered
by saying that he did not believe in the Constitution and that a genuine land reform cannot be
realized under a landlord-controlled Congress. A heated discussion ensued between Tadeo and
Minister Alvarez. This notwithstanding, Minister Alvarez suggested a negotiating panel from
each side to meet again the following day.
On January 22, 1987, Tadeo's group instead decided to march to Malacaang to air their
demands. Before the march started, Tadeo talked to the press and TV media. He uttered fiery
words, the most telling of which were:
". . . inalis namin ang barikada bilang kahilingan ng ating Presidente, pero kinakailangan alisin
din niya ang barikada sa Mendiola sapagkat bubutasin din namin iyon at dadanak ang
dugo . . . ." 4
The farmers then proceeded to march to Malacaang, from Quezon Memorial Circle, at 10:00
a.m. They were later joined by members of other sectoral organizations such as the Kilusang
Mayo Uno (KMU), Bagong Alyansang Makabayan (BAYAN), League of Filipino Students
(LFS) and Kongreso ng Pagkakaisa ng Maralitang Lungsod (KPML).
At around 1:00 p.m., the marchers reached Liwasang Bonifacio where they held a brief program.
It was at this point that some of the marchers entered the eastern side of the Post Office
Building, and removed the steel bars surrounding the garden. Thereafter, they joined the march
to Malacaang. At about 4:30 p.m., they reached C.M. Recto Avenue.
In anticipation of a civil disturbance, and acting upon reports received by the Capital Regional
Command (CAPCOM) that the rallyists would proceed to Mendiola to break through the police
lines and rush towards Malacaang, CAPCOM Commander General Ramon E. Montao
inspected the preparations and adequacy of the government forces to quell impending attacks.
OPLAN YELLOW (Revised) was put into effect. Task Force Nazareno under the command of
Col. Cesar Nazareno was deployed at the vicinity of Malacaang. The civil disturbance control
units of the Western Police District under Police Brigadier General Alfredo S. Lim were also
activated.
Intelligence reports were also received that the KMP was heavily infiltrated by CPP/NPA
elements and that an insurrection was impending. The threat seemed grave as there were also
reports that San Beda College and Centro Escolar University would be forcibly occupied.
In its report, the Citizens' Mendiola Commission (a body specifically tasked to investigate the
facts surrounding the incident, Commission for short) stated that the government anti-riot forces
were assembled at Mendiola in a formation of three phalanges, in the following manner:
(1) The first line was composed of policemen from police stations Nos. 3, 4, 6, 7,
8, 9 and 10 and the Chinatown detachment of the Western Police District. Police
Colonel Edgar Dula Torres, Deputy Superintendent of the Western Police
District, was designated as ground commander of the CDC first line of defense.
The WPD CDC elements were positioned at the intersection of Mendiola and
Legarda Streets after they were ordered to move forward from the top of
Mendiola bridge. The WPD forces were in khaki uniform and carried the
standard CDC equipment aluminum shields, truncheons and gas masks.
(2) At the second line of defense about ten (10) yards behind the WPD policemen
were the elements of the Integrated National Police (INP) Field Force stationed at
Fort Bonifacio from the 61st and 62nd INP Field Force, who carried also the
standard CDC equipment truncheons, shields and gas masks. The INP Field
Force was under the command of Police Major Demetrio dela Cruz.
(3) Forming the third line was the Marine Civil Disturbance Control Battalion
composed of the first and second companies of the Philippine Marines stationed
at Fort Bonifacio. The marines were all equipped with shields, truncheons and M16 rifles (armalites) slung at their backs, under the command of Major Felimon
B. Gasmin. The Marine CDC Battalion was positioned in line formation ten (10)
yards farther behind the INP Field Force.
At the back of the marines were four (4) 6 x 6 army trucks, occupying the entire
width of Mendiola street, followed immediately by two water cannons, one on
each side of the street and eight fire trucks, four trucks on each side of the street.
The eight fire trucks from Fire District I of Manila under Fire Superintendent
Mario C. Tanchanco, were to supply water to the two water cannons.
Stationed farther behind the CDC forces were the two Mobile Dispersal Teams
(MDT) each composed of two tear gas grenadiers, two spotters, an assistant
grenadier, a driver and the team leader.
In front of the College of the Holy Spirit near Gate 4 of Malacaang stood the
VOLVO Mobile Communications Van of the Commanding General of
CAPCOM/INP, General Ramon E. Montao. At this command post, after General
Montao had conferred with TF Nazareno Commander, Colonel Cezar Nazareno,
about the adequacy and readiness of his forces, it was agreed that Police General
Alfredo S. Lim would designate Police Colonel Edgar Dula Torres and Police
Major Conrado Francisco as negotiators with the marchers. Police General Lim
then proceeded to the WPD CDC elements already positioned at the foot of
Mendiola bridge to relay to Police Colonel Torres and Police Major Francisco the
instructions that the latter would negotiate with the marchers. 5 (Emphasis
supplied)
The marchers, at around 4:30 p.m., numbered about 10,000 to 15,000. From C.M. Recto Avenue,
they proceeded toward the police lines. No dialogue took place between the marchers and the
anti-riot squad. It was at this moment that a clash occurred and, borrowing the words of the
Commission "pandemonium broke loose". The Commission stated in its findings, to wit:
. . . There was an explosion followed by throwing of pillboxes, stones and bottles.
Steel bars, wooden clubs and lead pipes were used against the police. The police
fought back with their shields and truncheons. The police line was breached.
Suddenly shots were heard. The demonstrators disengaged from the government
forces and retreated towards C.M. Recto Avenue. But sporadic firing continued
from the government forces.
After the firing ceased, two MDTs headed by Lt. Romeo Paquinto and Lt.
Laonglaan Goce sped towards Legarda Street and lobbed tear gas at the
remaining rallyist still grouped in the vicinity of Mendiola. After dispersing the
crowd, the two MDTs, together with the two WPD MDTs, proceeded to Liwasang
Bonifacio upon order of General Montao to disperse the rallyists assembled
thereat. Assisting the MDTs were a number of policemen from the WPD, attired
in civilian clothes with white head bands, who were armed with long firearms. 6
(Emphasis ours)
After the clash, twelve (12) marchers were officially confirmed dead, although according to
Tadeo, there were thirteen (13) dead, but he was not able to give the name and address of said
victim. Thirty-nine (39) were wounded by gunshots and twelve (12) sustained minor injuries, all
belonging to the group of the marchers.
Of the police and military personnel, three (3) sustained gunshot wounds and twenty (20)
suffered minor physical injuries such as abrasions, contusions and the like.
In the aftermath of the confrontation, then President Corazon C. Aquino issued Administrative
Order No. 11, 7 (A.O. 11, for brevity) dated January 22, 1987, which created the Citizens'
Mendiola Commission. The body was composed of retired Supreme Court Justice Vicente Abad
Santos as Chairman, retired Supreme Court Justice Jose Y. Feria and Mr. Antonio U. Miranda,
both as members. A.O. 11 stated that the Commission was created precisely for the "purpose of
conducting an investigation of the disorder, deaths, and casualties that took place in the vicinity
of Mendiola Bridge and Mendiola Street and Claro M. Recto Avenue, Manila, in the afternoon
of January 22, 1987". The Commission was expected to have submitted its findings not later
than February 6, 1987. But it failed to do so. Consequently, the deadline was moved to February
16, 1987 by Administrative Order No. 13. Again, the Commission was unable to meet this
deadline. Finally, on February 27, 1987, it submitted its report, in accordance with
Administrative Order No. 17, issued on February 11, 1987.
In its report, the Commission recapitulated its findings, to wit:
(1) The march to Mendiola of the KMP led by Jaime Tadeo, together with the
other sectoral groups, was not covered by any permit as required under Batas
Pambansa Blg. 880, the Public Assembly Act of 1985, in violation of paragraph
(a) Section 13, punishable under paragraph (a), Section 14 of said law.
(2) The crowd dispersal control units of the police and the military were armed
with .38 and .45 caliber handguns, and M-16 armalites, which is a prohibited act
under paragraph 4(g), Section 13, and punishable under paragraph (b), Section 14
of Batas Pambansa Blg. 880.
(3) The security men assigned to protect the WPD, INP Field Force, the Marines
and supporting military units, as well as the security officers of the police and
military commanders were in civilian attire in violation of paragraph (a), Section
10, Batas Pambansa 880.
(4) There was unnecessary firing by the police and military crowd dispersal
control units in dispersing the marchers, a prohibited act under paragraph (e),
Section 13, and punishable under paragraph (b), Section 14, Batas Pambansa Blg.
880.
(5) The carrying and use of steel bars, pillboxes, darts, lead pipe, wooden clubs
with spikes, and guns by the marchers as offensive weapons are prohibited acts
punishable under paragraph (g), Section 13, and punishable under paragraph (e),
Section 14 of Batas Pambansa Blg. 880.
(6) The KMP farmers broke off further negotiations with the MAR officials and
were determined to march to Malacaang, emboldened as they are, by the
inflammatory and incendiary utterances of their leader, Jaime Tadeo
"bubutasin namin ang barikada . . Dadanak and dugo . . . Ang nagugutom na
magsasaka ay gagawa ng sariling butas. . .
(7) There was no dialogue between the rallyists and the government forces. Upon
approaching the intersections of Legarda and Mendiola, the marchers began
pushing the police lines and penetrated and broke through the first line of the
CDC contingent.
(8) The police fought back with their truncheons and shields. They stood their
ground but the CDC line was breached. There ensued gunfire from both sides. It
is not clear who started the firing.
(9) At the onset of the disturbance and violence, the water cannons and tear gas
were not put into effective use to disperse the rioting crowd.
(10) The water cannons and fire trucks were not put into operation because (a)
there was no order to use them; (b) they were incorrectly prepositioned; and (c)
they were out of range of the marchers.
(11) Tear gas was not used at the start of the disturbance to disperse the rioters.
After the crowd had dispersed and the wounded and dead were being carried
away, the MDTs of the police and the military with their tear gas equipment and
components conducted dispersal operations in the Mendiola area and proceeded
to Liwasang Bonifacio to disperse the remnants of the marchers.
(12) No barbed wire barricade was used in Mendiola but no official reason was
given for its absence. 8
From the results of the probe, the Commission recommended 9 the criminal prosecution of four
unidentified, uniformed individuals, shown either on tape or in pictures, firing at the direction of
the marchers. In connection with this, it was the Commission's recommendation that the
National Bureau of Investigation (NBI) be tasked to undertake investigations regarding the
identities of those who actually fired their guns that resulted in the death of or injury to the
victims of the incident. The Commission also suggested that all the commissioned officers of
both the Western Police District and the INP Field Force, who were armed during the incident,
be prosecuted for violation of paragraph 4(g) of Section 13, Batas Pambansa Blg. 880, the
Public Assembly Act of 1985. The Commission's recommendation also included the prosecution
of the marchers, for carrying deadly or offensive weapons, but whose identities have yet to be
established. As for Jaime Tadeo, the Commission said that he should be prosecuted both for
violation of paragraph (a), Section 13, Batas Pambansa Blg. 880 for holding the rally without a
permit and for violation of Article 142, as amended, of the Revised Penal Code for inciting to
sedition. As for the following officers, namely: (1) Gen. Ramon E. Montao; (2) Police Gen.
Alfredo S. Lim; (3) Police Gen. Edgar Dula Torres; (4) Police Maj. Demetrio dela Cruz; (5) Col.
Cezar Nazareno; and (5) Maj. Felimon Gasmin, for their failure to make effective use of their
skill and experience in directing the dispersal operations in Mendiola, administrative sanctions
were recommended to be imposed.
The last and the most significant recommendation of the Commission was for the deceased and
wounded victims of the Mendiola incident to be compensated by the government. It was this
portion that petitioners (Caylao group) invoke in their claim for damages from the government.
Notwithstanding such recommendation, no concrete form of compensation was received by the
victims. Thus, on July 27, 1987, herein petitioners, (Caylao group) filed a formal letter of
demand for compensation from the Government. 10 This formal demand was indorsed by the
office of the Executive Secretary to the Department of Budget and Management (DBM) on
August 13, 1987. The House Committee on Human Rights, on February 10, 1988, recommended
the expeditious payment of compensation to the Mendiola victims. 11
After almost a year, on January 20, 1988, petitioners (Caylao group) were constrained to
institute an action for damages against the Republic of the Philippines, together with the military
officers, and personnel involved in the Mendiola incident, before the trial court. The complaint
was docketed as Civil Case No. 88-43351.
On February 23, 1988, the Solicitor General filed a Motion to Dismiss on the ground that the
State cannot be sued without its consent. Petitioners opposed said motion on March 16, 1988,
maintaining that the State has waived its immunity from suit and that the dismissal of the instant
action is contrary to both the Constitution and the International Law on Human Rights.
Respondent Judge Sandoval, in his first questioned Order, dismissed the complaint as against the
Republic of the Philippines on the ground that there was no waiver by the State. Petitioners
(Caylao group) filed a Motion for Reconsideration therefrom, but the same was denied by
respondent judge in his Order dated August 8, 1988. Consequently, Caylao and her copetitioners filed the instant petition.
On the other hand, the Republic of the Philippines, together with the military officers and
personnel impleaded as defendants in the court below, filed its petition for certiorari.
Having arisen from the same factual beginnings and raising practically identical issues, the two
(2) petitions were consolidated and will therefore be jointly dealt with and resolved in this
Decision.
The resolution of both petitions revolves around the main issue of whether or not the State has
waived its immunity from suit.
Petitioners (Caylao group) advance the argument that the State has impliedly waived its
sovereign immunity from suit. It is their considered view that by the recommendation made by
the Commission for the government to indemnify the heirs and victims of the Mendiola incident
and by the public addresses made by then President Aquino in the aftermath of the killings, the
State has consented to be sued.
Under our Constitution the principle of immunity of the government from suit is expressly
provided in Article XVI, Section 3. The principle is based on the very essence of sovereignty,
and on the practical ground that there can be no legal right as against the authority that makes
the law on which the right depends. 12 It also rests on reasons of public policy that public
service would be hindered, and the public endangered, if the sovereign authority could be
subjected to law suits at the instance of every citizen and consequently controlled in the uses and
dispositions of the means required for the proper administration of the government. 13
This is not a suit against the State with its consent.
Firstly, the recommendation made by the Commission regarding indemnification of the heirs of
the deceased and the victims of the incident by the government does not in any way mean that
liability automatically attaches to the State. It is important to note that A.O. 11 expressly states
that the purpose of creating the Commission was to have a body that will conduct an
"investigation of the disorder, deaths and casualties that took place." 14 In the exercise of its
functions, A.O. 11 provides guidelines, and what is relevant to Our discussion reads:
1 Its conclusions regarding the existence of probable cause for the commission of
any offense and of the persons probably guilty of the same shall be sufficient
compliance with the rules on preliminary investigation and the charges arising
therefrom may be filed directly with the proper court. 15
In effect, whatever may be the findings of the Commission, the same shall only serve as the
cause of action in the event that any party decides to litigate his/her claim. Therefore, the
Commission is merely a preliminary venue. The Commission is not the end in itself. Whatever
recommendation it makes cannot in any way bind the State immediately, such recommendation
not having become final and, executory. This is precisely the essence of it being a fact-finding
body.
Secondly, whatever acts or utterances that then President Aquino may have done or said, the
same are not tantamount to the State having waived its immunity from suit. The President's act
of joining the marchers, days after the incident, does not mean that there was an admission by
the State of any liability. In fact to borrow the words of petitioners (Caylao group), "it was an act
of solidarity by the government with the people". Moreover, petitioners rely on President
Aquino's speech promising that the government would address the grievances of the rallyists. By
this alone, it cannot be inferred that the State has admitted any liability, much less can it be
inferred that it has consented to the suit.
Although consent to be sued may be given impliedly, still it cannot be maintained that such
consent was given considering the circumstances obtaining in the instant case.
Thirdly, the case does not qualify as a suit against the State.
Some instances when a suit against the State is proper are: 16
(1) When the Republic is sued by name;
(2) When the suit is against an unincorporated government agency;
(3) When the, suit is on its face against a government officer but the case is such that ultimate
liability will belong not to the officer but to the government.
While the Republic in this case is sued by name, the ultimate liability does not pertain to the
government. Although the military officers and personnel, then party defendants, were
discharging their official functions when the incident occurred, their functions ceased to be
official the moment they exceeded their authority. Based on the Commission findings, there was
lack of justification by the government forces in the use of firearms. 17 Moreover, the members
of the police and military crowd dispersal units committed a prohibited act under B.P. Blg. 880 18
as there was unnecessary firing by them in dispersing the marchers. 19
As early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea
that he is a public agent acting under the color of his office when his acts are wholly without
authority. 20 Until recently in 1991, 21 this doctrine still found application, this Court saying that
immunity from suit cannot institutionalize irresponsibility and non-accountability nor grant a
privileged status not claimed by any other official of the Republic. The military and police
forces were deployed to ensure that the rally would be peaceful and orderly as well as to
guarantee the safety of the very people that they are duty-bound to protect. However, the facts as
found by the trial court showed that they fired at the unruly crowd to disperse the latter.
While it is true that nothing is better settled than the general rule that a sovereign state and its
political subdivisions cannot be sued in the courts except when it has given its consent, it cannot
be invoked by both the military officers to release them from any liability, and by the heirs and
victims to demand indemnification from the government. The principle of state immunity from
suit does not apply, as in this case, when the relief demanded by the suit requires no affirmative
official action on the part of the State nor the affirmative discharge of any obligation which
belongs to the State in its political capacity, even though the officers or agents who are made
defendants claim to hold or act only by virtue of a title of the state and as its agents and
servants. 22 This Court has made it quite clear that even a "high position in the government does
not confer a license to persecute or recklessly injure another." 23
The inescapable conclusion is that the State cannot be held civilly liable for the deaths that
followed the incident. Instead, the liability should fall on the named defendants in the lower
court. In line with the ruling of this court in Shauf vs. Court of Appeals, 24 herein public officials,
having been found to have acted beyond the scope of their authority, may be held liable for
damages.
WHEREFORE, finding no reversible error and no grave abuse of discretion committed by
respondent Judge in issuing the questioned orders, the instant petitions are hereby DISMISSED.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero,
Nocon, Bellosillo, Melo and Quiason, JJ., concur. Gutierrez, Jr., J., is on leave.
G.R. No. L-5156
March 11, 1954
CARMEN FESTEJO, demandante-apelante,

vs.
ISAIAS FERNANDO, Director de Obras Publicas, 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
representacion del apelado.
DIOKNO, J.:
Carmen Festejo, duea de unos terrenos azucareros, de un total de unas 9 hectareas y media de
superfice, demando a "Isaias Fernando Director, Bureau of public Works, que como tal Director
de Obras Publicas tiene a su cargo los sistemas y proyectos de irrigacion y es el funcionario
responsable de la construccion de los sistemas de irrigacion en el pais," alegando que
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 ella variados daos y perjuicios. Pidio, en su consecuencia, sentencia condenando 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 las costas R. on
A., pp. 5-6.
El demandado, por medio del Procurador General, presento mocion de sobreseimiento de la
demanda por el fundamento de que el Juzgado no tiene jurisdiccion para dictar sentencia valida
contra el, toda vez que judicialmente la reclamacion es contra la Republica de Filipinas, y esta
no ha presentado su consentimiento a la demanda. El Juzgado inferior estimo la mocion y
sobreseyo la demanda sin perjuicio y sin costas.
En apelacion, la demandante sostiene que fue un error considerar la demanda como una contra la
Republica y sobreseer en su virtud la demanda.
La mocion contra "Isaias Fernando, Director de Obras Publicas, encargado y responsable de la
construccion de los sistemas de irrigacion en Filipinas" es una dirigida personalmente contra el,
por actos que asumio ejecutar en su concepto oficial. La ley no le exime de responsabilidad por
las extralimitaciones que cometa o haga cometer en el desempeo de sus funciones oficiales. Un
caso semejante es el de Nelson vs. Bobcock (1933) 18 minn. 584, NW 49, 90 ALR 1472. Alli el
Comisionado de Carreteras, al mejorar un trozo de la carretera ocupo o se apropio de terrenos
contiguos al derecho de paso. El Tribunal Supremo del Estado declaro que es personalmente
responsable al dueo de los daos causados. Declaro ademas que la ratificacion de lo que
hicieron sus subordinados era equivalente a una orden 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 an dusefulness, 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 doctrina sobre la responsabilidad civil de los funcionarios en casos parecidos se resume como
sigue:
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 del Codigo Civil dice a su vez:
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:
xxx
xxx
xxx
(6) The right against deprivation of property without due process of law;
xxx
xxx
xxx
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.
Veanse tambien 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 orden apelada y se ordena la continuacion de la tramitacion de la demanda
conforme proveen los reglamentos. Sin especial pronunciamiento en cuanto a las costas. Asi se
ordena.
Padilla, Reyes, Jugo, Bautista Angelo and Labrador, MM., estan conformes.
G.R. No. 76607 February 26, 1990

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE REEVES,
petitioners,
vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial Court,
Angeles City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO
C. DEL PILAR, respondents.
G.R. No. 79470 February 26, 1990
UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF, WILFREDO
BELSA, PETER ORASCION AND ROSE CARTALLA, petitioners,
vs.
HON. RODOLFO D. RODRIGO, as Presiding Judge of Branch 7, Regional Trial Court
(BAGUIO CITY), La Trinidad, Benguet and FABIAN GENOVE, respondents.
G.R. No. 80018 February 26, 1990
UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F.
BOSTICK, petitioners,
vs.
HON. JOSEFINA D. CEBALLOS, As Presiding Judge, Regional Trial Court, Branch 66,
Capas, Tarlac, and LUIS BAUTISTA, respondents.
G.R. No. 80258 February 26, 1990
UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC
ERNEST E. RIVENBURGH, AIC ROBIN BLEVINS, SGT. NOEL A. GONZALES, SGT.
THOMAS MITCHELL, SGT. WAYNE L. BENJAMIN, ET AL., petitioners,
vs.
HON. CONCEPCION S. ALARCON VERGARA, as Presiding Judge, Branch 62
REGIONAL TRIAL COURT, Angeles City, and RICKY SANCHEZ, FREDDIE
SANCHEZ AKA FREDDIE RIVERA, EDWIN MARIANO, AKA JESSIE DOLORES
SANGALANG, ET AL., respondents.
Luna, Sison & Manas Law Office for petitioners.
CRUZ, J.:
These cases have been consolidated because they all involve the doctrine of state immunity. The
United States of America was not impleaded in the complaints below but has moved to dismiss
on the ground that they are in effect suits against it to which it has not consented. It is now
contesting the denial of its motions by the respondent judges.
In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force
stationed in Clark Air Base in connection with the bidding conducted by them for contracts for
barber services in the said base.
On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S.
Air Force, solicited bids for such contracts through its contracting officer, James F. Shaw.
Among those who submitted their bids were private respondents Roberto T. Valencia,
Emerenciana C. Tanglao, and Pablo C. del Pilar. Valencia had been a concessionaire inside Clark
for 34 years; del Pilar for 12 years; and Tanglao for 50 years.
The bidding was won by Ramon Dizon, over the objection of the private respondents, who
claimed that he had made a bid for four facilities, including the Civil Engineering Area, which
was not included in the invitation to bid.
The private respondents complained to the Philippine Area Exchange (PHAX). The latter,
through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse explained that
the Civil Engineering concession had not been awarded to Dizon as a result of the February 24,
1986 solicitation. Dizon was already operating this concession, then known as the NCO club
concession, and the expiration of the contract had been extended from June 30, 1986 to August
31, 1986. They further explained that the solicitation of the CE barbershop would be available
only by the end of June and the private respondents would be notified.
On June 30, 1986, the private respondents filed a complaint in the court below to compel PHAX
and the individual petitioners to cancel the award to defendant Dizon, to conduct a rebidding for
the barbershop concessions and to allow the private respondents by a writ of preliminary
injunction to continue operating the concessions pending litigation. 1
Upon the filing of the complaint, the respondent court issued an ex parte order directing the
individual petitioners to maintain the status quo.
On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for
preliminary injunction on the ground that the action was in effect a suit against the United States
of America, which had not waived its non-suability. The individual defendants, as official
employees of the U.S. Air Force, were also immune from suit.
On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary
injunction.
On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part as
follows:
From the pleadings thus far presented to this Court by the parties, the Court's
attention is called by the relationship between the plaintiffs as well as the
defendants, including the US Government, in that prior to the bidding or
solicitation in question, there was a binding contract between the plaintiffs as
well as the defendants, including the US Government. By virtue of said contract
of concession it is the Court's understanding that neither the US Government nor
the herein principal defendants would become the employer/s of the plaintiffs but
that the latter are the employers themselves of the barbers, etc. with the employer,
the plaintiffs herein, remitting the stipulated percentage of commissions to the
Philippine Area Exchange. The same circumstance would become in effect when
the Philippine Area Exchange opened for bidding or solicitation the questioned
barber shop concessions. To this extent, therefore, indeed a commercial
transaction has been entered, and for purposes of the said solicitation, would
necessarily be entered between the plaintiffs as well as the defendants.
The Court, further, is of the view that Article XVIII of the RP-US Bases
Agreement does not cover such kind of services falling under the
concessionaireship, such as a barber shop concession. 2
On December 11, 1986, following the filing of the herein petition for certiorari and prohibition
with preliminary injunction, we issued a temporary restraining order against further proceedings
in the court below. 3
In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony
Lamachia, Wilfredo Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the
U.S. Air Force Recreation Center at the John Hay Air Station in Baguio City. It had been
ascertained after investigation, from the testimony of Belsa Cartalla and Orascion, that Genove
had poured urine into the soup stock used in cooking the vegetables served to the club
customers. Lamachia, as club manager, suspended him and thereafter referred the case to a board
of arbitrators conformably to the collective bargaining agreement between the Center and its
employees. The board unanimously found him guilty and recommended his dismissal. This was
effected on March 5, 1986, by Col. David C. Kimball, Commander of the 3rd Combat Support
Group, PACAF Clark Air Force Base. Genove's reaction was to file Ms complaint in the
Regional Trial Court of Baguio City against the individual petitioners. 4
On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss
the complaint, alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay
Air Station, was immune from suit for the acts done by him in his official capacity. They argued
that the suit was in effect against the United States, which had not given its consent to be sued.
This motion was denied by the respondent judge on June 4, 1987, in an order which read in part:
It is the understanding of the Court, based on the allegations of the complaint
which have been hypothetically admitted by defendants upon the filing of their
motion to dismiss that although defendants acted initially in their official
capacities, their going beyond what their functions called for brought them out of
the protective mantle of whatever immunities they may have had in the
beginning. Thus, the allegation that the acts complained of were illegal, done.
with extreme bad faith and with pre-conceived sinister plan to harass and finally
dismiss the plaintiff, gains significance. 5
The petitioners then came to this Court seeking certiorari and prohibition with preliminary
injunction.
In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O' Donnell, an
extension of Clark Air Base, was arrested following a buy-bust operation conducted by the
individual petitioners herein, namely, Tomi J. King, Darrel D. Dye and Stephen F. Bostick,
officers of the U.S. Air Force and special agents of the Air Force Office of Special Investigators
(AFOSI). On the basis of the sworn statements made by them, an information for violation of
R.A. 6425, otherwise known as the Dangerous Drugs Act, was filed against Bautista in the
Regional Trial Court of Tarlac. The above-named officers testified against him at his trial. As a
result of the filing of the charge, Bautista was dismissed from his employment. He then filed a
complaint for damages against the individual petitioners herein claiming that it was because of
their acts that he was removed. 6
During the period for filing of the answer, Mariano Y. Navarro a special counsel assigned to the
International Law Division, Office of the Staff Judge Advocate of Clark Air Base, entered a
special appearance for the defendants and moved for an extension within which to file an
"answer and/or other pleadings." His reason was that the Attorney General of the United States
had not yet designated counsel to represent the defendants, who were being sued for their
official acts. Within the extended period, the defendants, without the assistance of counsel or
authority from the U.S. Department of Justice, filed their answer. They alleged therein as
affirmative defenses that they had only done their duty in the enforcement of the laws of the
Philippines inside the American bases pursuant to the RP-US Military Bases Agreement.
On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the
defendants, filed with leave of court a motion to withdraw the answer and dismiss the complaint.
The ground invoked was that the defendants were acting in their official capacity when they did
the acts complained of and that the complaint against them was in effect a suit against the United
States without its consent.
The motion was denied by the respondent judge in his order dated September 11, 1987, which
held that the claimed immunity under the Military Bases Agreement covered only criminal and
not civil cases. Moreover, the defendants had come under the jurisdiction of the court when they
submitted their answer. 7
Following the filing of the herein petition for certiorari and prohibition with preliminary
injunction, we issued on October 14, 1987, a temporary restraining order. 8
In G.R. No. 80258, a complaint for damages was filed by the private respondents against the
herein petitioners (except the United States of America), for injuries allegedly sustained by the
plaintiffs as a result of the acts of the defendants. 9 There is a conflict of factual allegations here.
According to the plaintiffs, the defendants beat them up, handcuffed them and unleashed dogs
on them which bit them in several parts of their bodies and caused extensive injuries to them.
The defendants deny this and claim the plaintiffs were arrested for theft and were bitten by the
dogs because they were struggling and resisting arrest, The defendants stress that the dogs were
called off and the plaintiffs were immediately taken to the medical center for treatment of their
wounds.
In a motion to dismiss the complaint, the United States of America and the individually named
defendants argued that the suit was in effect a suit against the United States, which had not given
its consent to be sued. The defendants were also immune from suit under the RP-US Bases
Treaty for acts done by them in the performance of their official functions.
The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading
in part as follows:
The defendants certainly cannot correctly argue that they are immune from suit.
The allegations, of the complaint which is sought to be dismissed, had to be
hypothetically admitted and whatever ground the defendants may have, had to be
ventilated during the trial of the case on the merits. The complaint alleged
criminal acts against the individually-named defendants and from the nature of
said acts it could not be said that they are Acts of State, for which immunity
should be invoked. If the Filipinos themselves are duty bound to respect, obey
and submit themselves to the laws of the country, with more reason, the members
of the United States Armed Forces who are being treated as guests of this country
should respect, obey and submit themselves to its laws. 10
and so was the motion for reconsideration. The defendants submitted their answer as required
but subsequently filed their petition for certiorari and prohibition with preliminary injunction
with this Court. We issued a temporary restraining order on October 27, 1987. 11
II
The rule that a state may not be sued without its consent, now expressed in Article XVI, Section
3, of the 1987 Constitution, is one of the generally accepted principles of international law that
we have adopted as part of the law of our land under Article II, Section 2. This latter provision
merely reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and also intended
to manifest our resolve to abide by the rules of the international community.
Even without such affirmation, we would still be bound by the generally accepted principles of
international law under the doctrine of incorporation. Under this doctrine, as accepted by the
majority of states, such principles are deemed incorporated in the law of every civilized state as
a condition and consequence of its membership in the society of nations. Upon its admission to
such society, the state is automatically obligated to comply with these principles in its relations
with other states.
As applied to the local state, the doctrine of state immunity is based on the justification given by
Justice Holmes that "there can be no legal right against the authority which makes the law on
which the right depends." 12 There are other practical reasons for the enforcement of the
doctrine. In the case of the foreign state sought to be impleaded in the local jurisdiction, the
added inhibition is expressed in the maxim par in parem, non habet imperium. All states are
sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would,
in the language of a celebrated case, "unduly vex the peace of nations." 13
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 although it has not been formally impleaded. 14 In such a situation, the state may
move to dismiss the complaint on the ground that it has been filed without its consent.
The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the
privilege it grants the state to defeat any legitimate claim against it by simply invoking its nonsuability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling
tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does
not say the state may not be sued under any circumstance. On the contrary, the rule says that the
state may not be sued without its consent, which clearly imports that it may be sued if it
consents.
The consent of the state to be sued may be manifested expressly or impliedly. Express consent
may be embodied in a general law or a special law. Consent is implied when the state enters into
a contract or it itself commences litigation.
The general law waiving the immunity of the state from suit is found in Act No. 3083, under
which the Philippine government "consents and submits to be sued upon any moneyed claim
involving liability arising from contract, express or implied, which could serve as a basis of civil
action between private parties." In Merritt v. Government of the Philippine Islands, 15 a special
law was passed to enable a person to sue the government for an alleged tort. When the
government enters into a contract, it is deemed to have descended to the level of the other
contracting party and divested of its sovereign immunity from suit with its implied consent. 16
Waiver is also implied when the government files a complaint, thus opening itself to a
counterclaim. 17
The above rules are subject to qualification. Express consent is effected only by the will of the
legislature through the medium of a duly enacted statute. 18 We have held that not all contracts
entered into by the government will operate as a waiver of its non-suability; distinction must be
made between its sovereign and proprietary acts. 19 As for the filing of a complaint by the
government, suability will result only where the government is claiming affirmative relief from
the defendant. 20
In the case of the United States of America, the customary rule of international law on state
immunity is expressed with more specificity in the RP-US Bases Treaty. Article III thereof
provides as follows:
It is mutually agreed that the United States shall have the rights, power and
authority within the bases which are necessary for the establishment, use,
operation and defense thereof or appropriate for the control thereof and all the
rights, power and authority within the limits of the territorial waters and air space
adjacent to, or in the vicinity of, the bases which are necessary to provide access
to them or appropriate for their control.
The petitioners also rely heavily on Baer v. Tizon, 21 along with several other decisions, to
support their position that they are not suable in the cases below, the United States not having
waived its sovereign immunity from suit. It is emphasized that in Baer, the Court held:
The invocation of the doctrine of immunity from suit of a foreign state without its
consent is appropriate. More specifically, insofar as alien armed forces is
concerned, the starting point is Raquiza v. Bradford, a 1945 decision. In
dismissing a habeas corpus petition for the release of petitioners confined by
American army authorities, Justice Hilado speaking for the Court, cited Coleman
v. Tennessee, where it was explicitly declared: 'It is well settled that a foreign
army, permitted to march through a friendly country or to be stationed in it, by
permission of its government or sovereign, is exempt from the civil and criminal
jurisdiction of the place.' Two years later, in Tubb and Tedrow v. Griess, this
Court relied on the ruling in Raquiza v. Bradford and cited in support thereof
excerpts from the works of the following authoritative writers: Vattel, Wheaton,
Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair and Lauterpacht.
Accuracy demands the clarification that after the conclusion of the PhilippineAmerican Military Bases Agreement, the treaty provisions should control on such
matter, the assumption being that there was a manifestation of the submission to
jurisdiction on the part of the foreign power whenever appropriate. More to the
point is Syquia v. Almeda Lopez, where plaintiffs as lessors sued the
Commanding General of the United States Army in the Philippines, seeking the
restoration to them of the apartment buildings they owned leased to the United
States armed forces stationed in the Manila area. A motion to dismiss on the
ground of non-suability was filed and upheld by respondent Judge. The matter
was taken to this Court in a mandamus proceeding. It failed. It was the ruling that
respondent Judge acted correctly considering that the 4 action must be considered
as one against the U.S. Government. The opinion of Justice Montemayor
continued: 'It is clear that the courts of the Philippines including the Municipal
Court of Manila have no jurisdiction over the present case for unlawful detainer.
The question of lack of jurisdiction was raised and interposed at the very
beginning of the action. The U.S. Government has not given its consent to the
filing of this suit which is essentially against her, though not in name. Moreover,
this is not only a case of a citizen filing a suit against his own Government
without the latter's consent but it is of a citizen firing an action against a foreign
government without said government's consent, which renders more obvious the
lack of jurisdiction of the courts of his country. The principles of law behind this
rule are so elementary and of such general acceptance that we deem it
unnecessary to cite authorities in support thereof then came Marvel Building
Corporation v. Philippine War Damage Commission, where respondent, a United
States Agency established to compensate damages suffered by the Philippines
during World War II was held as falling within the above doctrine as the suit
against it would eventually be a charge against or financial liability of the United
States Government because ... , the Commission has no funds of its own for the
purpose of paying money judgments.' The Syquia ruling was again explicitly
relied upon in Marquez Lim v. Nelson, involving a complaint for the recovery of a
motor launch, plus damages, the special defense interposed being 'that the vessel
belonged to the United States Government, that the defendants merely acted as
agents of said Government, and that the United States Government is therefore
the real party in interest.' So it was in Philippine Alien Property Administration v.
Castelo, where it was held that a suit against Alien Property Custodian and the
Attorney General of the United States involving vested property under the
Trading with the Enemy Act is in substance a suit against the United States. To
the same effect is Parreno v. McGranery, as the following excerpt from the
opinion of justice Tuazon clearly shows: 'It is a widely accepted principle of
international law, which is made a part of the law of the land (Article II, Section 3
of the Constitution), that a foreign state may not be brought to suit before the
courts of another state or its own courts without its consent.' Finally, there is
Johnson v. Turner, an appeal by the defendant, then Commanding General,
Philippine Command (Air Force, with office at Clark Field) from a decision
ordering the return to plaintiff of the confiscated military payment certificates
known as scrip money. In reversing the lower court decision, this Tribunal,
through Justice Montemayor, relied on Syquia v. Almeda Lopez, explaining why it
could not be sustained.
It bears stressing at this point that the above observations do not confer on the United States of
America a blanket immunity for all acts done by it or its agents in the Philippines. Neither may
the other petitioners claim that they are also insulated from suit in this country merely because
they have acted as agents of the United States in the discharge of their official functions.
There is no question that the United States of America, like any other state, will be deemed to
have impliedly waived its non-suability if it has entered into a contract in its proprietary or
private capacity. It is only when the contract involves its sovereign or governmental capacity
that no such waiver may be implied. This was our ruling in United States of America v. Ruiz, 22
where the transaction in question dealt with the improvement of the wharves in the naval
installation at Subic Bay. As this was a clearly governmental function, we held that the contract
did not operate to divest the United States of its sovereign immunity from suit. In the words of
Justice Vicente Abad Santos:
The traditional rule of immunity exempts a State from being sued in the courts of
another State without its consent or waiver. This rule is a necessary consequence
of the principles of independence and equality of States. However, the rules of

International Law are not petrified; they are constantly developing and evolving.
And because the activities of states have multiplied, it has been necessary to
distinguish them between sovereign and governmental acts (jure imperii) and
private, commercial and proprietary acts (jure gestionis). The result is that State
immunity now extends only to acts jure imperii The restrictive application of
State immunity is now the rule in the United States, the United kingdom and
other states in Western Europe.
xxx xxx xxx
The restrictive application of State immunity is proper only when the proceedings
arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State may be said to have
descended to the level of an individual and can thus be deemed to have tacitly
given its consent to be sued only when it enters into business contracts. It does
not apply where the contract relates to the exercise of its sovereign functions. In
this case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of
the government of the highest order; they are not utilized for nor dedicated to
commercial or business purposes.
The other petitioners in the cases before us all aver they have acted in the discharge of their
official functions as officers or agents of the United States. However, this is a matter of
evidence. The charges against them may not be summarily dismissed on their mere assertion that
their acts are imputable to the United States of America, which has not given its consent to be
sued. In fact, the defendants are sought to be held answerable for personal torts in which the
United States itself is not involved. If found liable, they and they alone must satisfy the
judgment.
In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever,
appropriated private land and converted it into public irrigation ditches. Sued for the value of the
lots invalidly taken by him, he moved to dismiss the complaint on the ground that the suit was in
effect against the Philippine government, which had not given its consent to be sued. This Court
sustained the denial of the motion and held that the doctrine of state immunity was not
applicable. The director was being sued in his private capacity for a personal tort.
With these considerations in mind, we now proceed to resolve the cases at hand.
III
It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners
therein were acting in the exercise of their official functions when they conducted the buy-bust
operation against the complainant and thereafter testified against him at his trial. The said
petitioners were in fact connected with the Air Force Office of Special Investigators and were
charged precisely with the function of preventing the distribution, possession and use of
prohibited drugs and prosecuting those guilty of such acts. It cannot for a moment be imagined
that they were acting in their private or unofficial capacity when they apprehended and later
testified against the complainant. It follows that for discharging their duties as agents of the
United States, they cannot be directly impleaded for acts imputable to their principal, which has
not given its consent to be sued. As we observed in Sanders v. Veridiano: 24
Given the official character of the above-described letters, we have to conclude

that the petitioners were, legally speaking, being sued as officers of the United
States government. As they have acted on behalf of that government, and within
the scope of their authority, it is that government, and not the petitioners
personally, that is responsible for their acts.
The private respondent invokes Article 2180 of the Civil Code which holds the government
liable if it acts through a special agent. The argument, it would seem, is premised on the ground
that since the officers are designated "special agents," the United States government should be
liable for their torts.
There seems to be a failure to distinguish between suability and liability and a misconception
that the two terms are synonymous. Suability depends on the consent of the state to be sued,
liability on the applicable law and the established facts. The circumstance that a state is suable
does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does
not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed
itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff
the chance to prove, if it can, that the defendant is liable.
The said article establishes a rule of liability, not suability. The government may be held liable
under this rule only if it first allows itself to be sued through any of the accepted forms of
consent.
Moreover, the agent performing his regular functions is not a special agent even if he is so
denominated, as in the case at bar. No less important, the said provision appears to regulate only
the relations of the local state with its inhabitants and, hence, applies only to the Philippine
government and not to foreign governments impleaded in our courts.
We reject the conclusion of the trial court that the answer filed by the special counsel of the
Office of the Sheriff Judge Advocate of Clark Air Base was a submission by the United States
government to its jurisdiction. As we noted in Republic v. Purisima, 25 express waiver of
immunity cannot be made by a mere counsel of the government but must be effected through a
duly-enacted statute. Neither does such answer come under the implied forms of consent as
earlier discussed.
But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the
discharge of their official functions, we hesitate to make the same conclusion in G.R. No. 80258.
The contradictory factual allegations in this case deserve in our view a closer study of what
actually happened to the plaintiffs. The record is too meager to indicate if the defendants were
really discharging their official duties or had actually exceeded their authority when the incident
in question occurred. Lacking this information, this Court cannot directly decide this case. The
needed inquiry must first be made by the lower court so it may assess and resolve the conflicting
claims of the parties on the basis of the evidence that has yet to be presented at the trial. Only
after it shall have determined in what capacity the petitioners were acting at the time of the
incident in question will this Court determine, if still necessary, if the doctrine of state immunity
is applicable.
In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club
located at the U.S. Air Force Recreation Center, also known as the Open Mess Complex, at John
Hay Air Station. As manager of this complex, petitioner Lamachia is responsible for eleven
diversified activities generating an annual income of $2 million. Under his executive
management are three service restaurants, a cafeteria, a bakery, a Class VI store, a coffee and
pantry shop, a main cashier cage, an administrative office, and a decentralized warehouse which
maintains a stock level of $200,000.00 per month in resale items. He supervises 167 employees,
one of whom was Genove, with whom the United States government has concluded a collective
bargaining agreement.
From these circumstances, the Court can assume that the restaurant services offered at the John
Hay Air Station partake of the nature of a business enterprise undertaken by the United States
government in its proprietary capacity. Such services are not extended to the American
servicemen for free as a perquisite of membership in the Armed Forces of the United States.
Neither does it appear that they are exclusively offered to these servicemen; on the contrary, it is
well known that they are available to the general public as well, including the tourists in Baguio
City, many of whom make it a point to visit John Hay for this reason. All persons availing
themselves of this facility pay for the privilege like all other customers as in ordinary
restaurants. Although the prices are concededly reasonable and relatively low, such services are
undoubtedly operated for profit, as a commercial and not a governmental activity.
The consequence of this finding is that the petitioners cannot invoke the doctrine of state
immunity to justify the dismissal of the damage suit against them by Genove. Such defense will
not prosper even if it be established that they were acting as agents of the United States when
they investigated and later dismissed Genove. For that matter, not even the United States
government itself can claim such immunity. The reason is that by entering into the employment
contract with Genove in the discharge of its proprietary functions, it impliedly divested itself of
its sovereign immunity from suit.
But these considerations notwithstanding, we hold that the complaint against the petitioners in
the court below must still be dismissed. While suable, the petitioners are nevertheless not liable.
It is obvious that the claim for damages cannot be allowed on the strength of the evidence before
us, which we have carefully examined.
The dismissal of the private respondent was decided upon only after a thorough investigation
where it was established beyond doubt that he had polluted the soup stock with urine. The
investigation, in fact, did not stop there. Despite the definitive finding of Genove's guilt, the case
was still referred to the board of arbitrators provided for in the collective bargaining agreement.
This board unanimously affirmed the findings of the investigators and recommended Genove's
dismissal. There was nothing arbitrary about the proceedings. The petitioners acted quite
properly in terminating the private respondent's employment for his unbelievably nauseating act.
It is surprising that he should still have the temerity to file his complaint for damages after
committing his utterly disgusting offense.
Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions
granted by the United States government are commercial enterprises operated by private
person's. They are not agencies of the United States Armed Forces nor are their facilities
demandable as a matter of right by the American servicemen. These establishments provide for
the grooming needs of their customers and offer not only the basic haircut and shave (as required
in most military organizations) but such other amenities as shampoo, massage, manicure and
other similar indulgences. And all for a fee. Interestingly, one of the concessionaires, private
respondent Valencia, was even sent abroad to improve his tonsorial business, presumably for the
benefit of his customers. No less significantly, if not more so, all the barbershop concessionaires
are under the terms of their contracts, required to remit to the United States government fixed
commissions in consideration of the exclusive concessions granted to them in their respective
areas.
This being the case, the petitioners cannot plead any immunity from the complaint filed by the
private respondents in the court below. The contracts in question being decidedly commercial,
the conclusion reached in the United States of America v. Ruiz case cannot be applied here.
The Court would have directly resolved the claims against the defendants as we have done in
G.R. No. 79470, except for the paucity of the record in the case at hand. The evidence of the
alleged irregularity in the grant of the barbershop concessions is not before us. This means that,
as in G.R. No. 80258, the respondent court will have to receive that evidence first, so it can later
determine on the basis thereof if the plaintiffs are entitled to the relief they seek. Accordingly,
this case must also be remanded to the court below for further proceedings.
IV
There are a number of other cases now pending before us which also involve the question of the
immunity of the United States from the jurisdiction of the Philippines. This is cause for regret,
indeed, as they mar the traditional friendship between two countries long allied in the cause of
democracy. It is hoped that the so-called "irritants" in their relations will be resolved in a spirit
of mutual accommodation and respect, without the inconvenience and asperity of litigation and
always with justice to both parties.
WHEREFORE, after considering all the above premises, the Court hereby renders judgment as
follows:
1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is
directed to proceed with the hearing and decision of Civil Case No. 4772. The
temporary restraining order dated December 11, 1986, is LIFTED.
2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298)
is DISMISSED.
3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is
DISMISSED. The temporary restraining order dated October 14, 1987, is made
permanent.
4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is
directed to proceed with the hearing and decision of Civil Case No. 4996. The
temporary restraining order dated October 27, 1987, is LIFTED.
All without any pronouncement as to costs.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla,
Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.
[G.R. No. 91359. September 25, 1992.]

VETERANS MANPOWER AND PROTECTIVE SERVICES, INC., Petitioner, v. THE
COURT OF APPEALS, THE CHIEF OF PHILIPPINE CONSTABULARY and
PHILIPPINE CONSTABULARY SUPERVISORY UNIT FOR SECURITY AND
INVESTIGATION AGENCIES (PC-SUSIA), Respondents.
Franciso A. Lava, Jr. and Andresito X. Fornier for Petitioner.
SYLLABUS
1. POLITICAL LAW; IMMUNITY FROM SUIT; THE PHILIPPINE CONSTABULARY
CHIEF AND THE PC-SUSIA MAY NOT BE SUED WITHOUT THE CONSENT OF THE
STATE. 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.
2. ID.; ID.; PUBLIC OFFICIAL MAY BE SUED IN HIS PERSONAL CAPACITY IF HE
ACTS, AMONG OTHERS BEYOND THE SCOPE OF HIS AUTHORITY; CASE AT BAR.
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 v. 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.
3. ID.; ID.; CONSENT TO BE SUED MUST EMANATE FROM A LEGISLATIVE ACT.
Waiver of the States immunity from suit, being a derogation of sovereignty, will not be lightly
inferred, but must be construed strictissimi juris (Republic v. 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.
4. ID.; ID.; REASONS BEHIND. 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 v. U.S. Wall, 152, 19 L. ed. 129, as cited in 78 SCRA 477).
DECISION
GRIO-AQUINO, J.:
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 Supervisor Unit for Security and Investigation Agencies (PC-SUSIA) v.
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-SUSIA
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.
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On March 28, 1988, VMPSI filed a complaint in the Regional Trial Court at Makati, Metro
Manila, praying the court to:
jgc:chanrobl es.com.ph
"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 prerequisite 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:
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"SECTION 4. Who may Organize a Security or Watchman Agency. 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, That no person shall organize or have an interest in, more than
one such agency except those which are already existing at the promulgation of this Decree: . . ."
(As amended by P.D. Nos. 11 and 100.)
"SECTION 17. Rules and Regulations by Chief, Philippine Constabulary. The Chief of the
Philippine Constabulary, in consultation with the Philippine Association of Detective and
Protective Agency Operators, 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."
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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.
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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, . . ." (p. 140,
Rollo.).
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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, 1998, 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.
chanrobl esvirtualawlibrary
Thus did we hold in Shauf v. Court of Appeals, 191 SCRA 713:

jgc:chanrobles.com.ph
"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 although it has not been formally impleaded." (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 v. 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:
"The Memorandum of Agreement dated May 12, 1986 was entered into by the PC Chief in
relation to the exercise of a function sovereign in nature. The correct test for the application of
state immunity is not the conclusion of a contract by the State but the legal nature of the act.
This was clearly enunciated in the case of United States of America v. Ruiz where the Hon.
Supreme Court held:
"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 business
contract. It does not apply where the contract relates to the exercise of its functions. (136 SCRA
487, 492.)
"In the instant case, the Memorandum of Agreement entered into by the PC Chief and PADPAO
was intended to professionalize the industry and to standardize the salaries of security guards as
well as the current rates of security services, clearly, a governmental function. The execution of
the said agreement is incidental to the purpose of R.A. 5487, as amended, which is to regulate
the organization and operation of private detective, watchmen or security guard agencies.
(Emphasis 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 strictissimi juris (Republic v. 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 v. U.S. Wall, 152, 19 L.
ed. 129, as cited in 78 SCRA 477). In the same vein, this Court in Republic v. Purisima (78
SCRA 470, 473) rationalized:
"Nonetheless, a continued adherence to the doctrine of nonsuability is not to be deplored for as

against the inconvenience that may be cause [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 obstacles, could very well be imagined."
(citing Providence Washington Insurance Co. v. Republic, 29 SCRA 598.)
cral awnad
WHEREFORE, the petition for review is DENIED and the judgment appealed from is
AFFIRMED in toto. No costs.
SO ORDERED.
Medialdea and Bellosillo, JJ., concur. Cruz, J., is on leave.
G.R. No. L-11154
March 21, 1916
E. MERRITT, plaintiff-appellant,
vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.
Crossfield and O'Brien for plaintiff.
Attorney-General Avancea for defendant..
TRENT, J.:
This is an appeal by both parties from a judgment of the Court of First Instance of the city of
Manila in favor of the plaintiff for the sum of P14,741, together with the costs of the cause.
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages
which the plaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and (2)
"in limiting the time when plaintiff was entirely disabled to two months and twenty-one days
and fixing the damage accordingly in the sum of P2,666, instead of P6,000 as claimed by
plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding
that the collision between the plaintiff's motorcycle and the ambulance of the General Hospital
was due to the negligence of the chauffeur; (b) in holding that the Government of the Philippine
Islands is liable for the damages sustained by the plaintiff as a result of the collision, even if it be
true that the collision was due to the negligence of the chauffeur; and (c) in rendering judgment
against the defendant for the sum of P14,741.
The trial court's findings of fact, which are fully supported by the record, are as follows:
It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a
motorcycle, was going toward the western part of Calle Padre Faura, passing along the
west side thereof at a speed of ten to twelve miles an hour, upon crossing Taft Avenue
and when he was ten feet from the southwestern intersection of said streets, the General
Hospital ambulance, upon reaching said avenue, instead of turning toward the south,
after passing the center thereof, so that it would be on the left side of said avenue, as is
prescribed by the ordinance and the Motor Vehicle Act, turned suddenly and
unexpectedly and long before reaching the center of the street, into the right side of Taft
Avenue, without having sounded any whistle or horn, by which movement it struck the
plaintiff, who was already six feet from the southwestern point or from the post place
there.
By reason of the resulting collision, the plaintiff was so severely injured that, according
to Dr. Saleeby, who examined him on the very same day that he was taken to the General
Hospital, he was suffering from a depression in the left parietal region, a would in the
same place and in the back part of his head, while blood issued from his nose and he was
entirely unconscious.
The marks revealed that he had one or more fractures of the skull and that the grey
matter and brain was had suffered material injury. At ten o'clock of the night in question,
which was the time set for performing the operation, his pulse was so weak and so
irregular that, in his opinion, there was little hope that he would live. His right leg was
broken in such a way that the fracture extended to the outer skin in such manner that it
might be regarded as double and the would be exposed to infection, for which reason it
was of the most serious nature.
At another examination six days before the day of the trial, Dr. Saleeby noticed that the
plaintiff's leg showed a contraction of an inch and a half and a curvature that made his
leg very weak and painful at the point of the fracture. Examination of his head revealed a
notable readjustment of the functions of the brain and nerves. The patient apparently was
slightly deaf, had a light weakness in his eyes and in his mental condition. This latter
weakness was always noticed when the plaintiff had to do any difficult mental labor,
especially when he attempted to use his money for mathematical calculations.
According to the various merchants who testified as witnesses, the plaintiff's mental and
physical condition prior to the accident was excellent, and that after having received the
injuries that have been discussed, his physical condition had undergone a noticeable
depreciation, for he had lost the agility, energy, and ability that he had constantly
displayed before the accident as one of the best constructors of wooden buildings and he
could not now earn even a half of the income that he had secured for his work because he
had lost 50 per cent of his efficiency. As a contractor, he could no longer, as he had
before done, climb up ladders and scaffoldings to reach the highest parts of the building.
As a consequence of the loss the plaintiff suffered in the efficiency of his work as a
contractor, he had to dissolved the partnership he had formed with the engineer. Wilson,
because he was incapacitated from making mathematical calculations on account of the
condition of his leg and of his mental faculties, and he had to give up a contract he had
for the construction of the Uy Chaco building."
We may say at the outset that we are in full accord with the trial court to the effect that the
collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due
solely to the negligence of the chauffeur.
The two items which constitute a part of the P14,741 and which are drawn in question by the
plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666, the
amount allowed for the loss of wages during the time the plaintiff was incapacitated from
pursuing his occupation. We find nothing in the record which would justify us in increasing the
amount of the first. As to the second, the record shows, and the trial court so found, that the
plaintiff's services as a contractor were worth P1,000 per month. The court, however, limited the
time to two months and twenty-one days, which the plaintiff was actually confined in the
hospital. In this we think there was error, because it was clearly established that the plaintiff was
wholly incapacitated for a period of six months. The mere fact that he remained in the hospital
only two months and twenty-one days while the remainder of the six months was spent in his
home, would not prevent recovery for the whole time. We, therefore, find that the amount of
damages sustained by the plaintiff, without any fault on his part, is P18,075.
As the negligence which caused the collision is a tort committed by an agent or employee of the
Government, the inquiry at once arises whether the Government is legally-liable for the damages
resulting therefrom.
Act No. 2457, effective February 3, 1915, reads:
An Act authorizing E. Merritt to bring suit against the Government of the Philippine
Islands and authorizing the Attorney-General of said Islands to appear in said suit.
Whereas a claim has been filed against the Government of the Philippine Islands by Mr.
E. Merritt, of Manila, for damages resulting from a collision between his motorcycle and
the ambulance of the General Hospital on March twenty-fifth, nineteen hundred and
thirteen;
Whereas it is not known who is responsible for the accident nor is it possible to
determine the amount of damages, if any, to which the claimant is entitled; and
Whereas the Director of Public Works and the Attorney-General recommended that an
Act be passed by the Legislature authorizing Mr. E. Merritt to bring suit in the courts
against the Government, in order that said questions may be decided: Now, therefore,
By authority of the United States, be it enacted by the Philippine Legislature, that:
SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of
the city of Manila against the Government of the Philippine Islands in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General
Hospital, and to determine the amount of the damages, if any, to which Mr. E. Merritt is
entitled on account of said collision, and the Attorney-General of the Philippine Islands
is hereby authorized and directed to appear at the trial on the behalf of the Government
of said Islands, to defendant said Government at the same.
SEC. 2. This Act shall take effect on its passage.
Enacted, February 3, 1915.
Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did
it also concede its liability to the plaintiff? If only the former, then it cannot be held that the Act
created any new cause of action in favor of the plaintiff or extended the defendant's liability to
any case not previously recognized.
All admit that the Insular Government (the defendant) cannot be sued by an individual without
its consent. It is also admitted that the instant case is one against the Government. As the consent
of the Government to be sued by the plaintiff was entirely voluntary on its part, it is our duty to
look carefully into the terms of the consent, and render judgment accordingly.
The plaintiff was authorized to bring this action against the Government "in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General
Hospital and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled
on account of said collision, . . . ." These were the two questions submitted to the court for
determination. The Act was passed "in order that said questions may be decided." We have
"decided" that the accident was due solely to the negligence of the chauffeur, who was at the
time an employee of the defendant, and we have also fixed the amount of damages sustained by
the plaintiff as a result of the collision. Does the Act authorize us to hold that the Government is
legally liable for that amount? If not, we must look elsewhere for such authority, if it exists.
The Government of the Philippine Islands having been "modeled after the Federal and State
Governments in the United States," we may look to the decisions of the high courts of that
country for aid in determining the purpose and scope of Act No. 2457.
In the United States the rule that the state is not liable for the torts committed by its officers or
agents whom it employs, except when expressly made so by legislative enactment, is well
settled. "The Government," says Justice Story, "does not undertake to guarantee to any person
the fidelity of the officers or agents whom it employs, since that would involve it in all its
operations in endless embarrassments, difficulties and losses, which would be subversive of the
public interest." (Claussen vs. City of Luverne, 103 Minn., 491, citing U. S. vs. Kirkpatrick, 9
Wheat, 720; 6 L. Ed., 199; and Beers vs. States, 20 How., 527; 15 L. Ed., 991.)
In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from the
state for personal injuries received on account of the negligence of the state officers at the state
fair, a state institution created by the legislature for the purpose of improving agricultural and
kindred industries; to disseminate information calculated to educate and benefit the industrial
classes; and to advance by such means the material interests of the state, being objects similar to
those sought by the public school system. In passing upon the question of the state's liability for
the negligent acts of its officers or agents, the court said:
No claim arises against any government is favor of an individual, by reason of the
misfeasance, laches, or unauthorized exercise of powers by its officers or agents. (Citing
Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86 N. C., 51, 53; 41 Am. Rep., 440;
Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Green vs. State, 73 Cal., 29;
Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency, sec. 319.)
As to the scope of legislative enactments permitting individuals to sue the state where the cause
of action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:
By consenting to be sued a state simply waives its immunity from suit. It does not
thereby concede its liability to plaintiff, or create any cause of action in his favor, or
extend its liability to any cause not previously recognized. It merely gives a remedy to
enforce a preexisting liability and submits itself to the jurisdiction of the court, subject to
its right to interpose any lawful defense.
In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of
1913, which authorized the bringing of this suit, read:
SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit,
Waukesha County, Wisconsin, to bring suit in such court or courts and in such form or
forms as he may be advised for the purpose of settling and determining all controversies
which he may now have with the State of Wisconsin, or its duly authorized officers and
agents, relative to the mill property of said George Apfelbacher, the fish hatchery of the
State of Wisconsin on the Bark River, and the mill property of Evan Humphrey at the
lower end of Nagawicka Lake, and relative to the use of the waters of said Bark River
and Nagawicka Lake, all in the county of Waukesha, Wisconsin.
In determining the scope of this act, the court said:
Plaintiff claims that by the enactment of this law the legislature admitted liability on the
part of the state for the acts of its officers, and that the suit now stands just as it would
stand between private parties. It is difficult to see how the act does, or was intended to
do, more than remove the state's immunity from suit. It simply gives authority to
commence suit for the purpose of settling plaintiff's controversies with the estate.
Nowhere in the act is there a whisper or suggestion that the court or courts in the
disposition of the suit shall depart from well established principles of law, or that the
amount of damages is the only question to be settled. The act opened the door of the
court to the plaintiff. It did not pass upon the question of liability, but left the suit just
where it would be in the absence of the state's immunity from suit. If the Legislature had
intended to change the rule that obtained in this state so long and to declare liability on
the part of the state, it would not have left so important a matter to mere inference, but
would have done so in express terms. (Murdock Grate Co. vs. Commonwealth, 152
Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)
In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and
considered, are as follows:
All persons who have, or shall hereafter have, claims on contract or for negligence
against the state not allowed by the state board of examiners, are hereby authorized, on
the terms and conditions herein contained, to bring suit thereon against the state in any of
the courts of this state of competent jurisdiction, and prosecute the same to final
judgment. The rules of practice in civil cases shall apply to such suits, except as herein
otherwise provided.
And the court said:
This statute has been considered by this court in at least two cases, arising under different
facts, and in both it was held that said statute did not create any liability or cause of
action against the state where none existed before, but merely gave an additional remedy
to enforce such liability as would have existed if the statute had not been enacted.
(Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs. State, 121 Cal., 16.)
A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims
against the commonwealth, whether at law or in equity," with an exception not necessary to be
here mentioned. In construing this statute the court, in Murdock Grate Co. vs. Commonwealth
(152 Mass., 28), said:
The statute we are discussing disclose no intention to create against the state a new and
heretofore unrecognized class of liabilities, but only an intention to provide a judicial
tribunal where well recognized existing liabilities can be adjudicated.
In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the
statute of New York, jurisdiction of claims for damages for injuries in the management of the
canals such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be conceded
that the state can be made liable for injuries arising from the negligence of its agents or servants,
only by force of some positive statute assuming such liability."
It being quite clear that Act No. 2457 does not operate to extend the Government's liability to
any cause not previously recognized, we will now examine the substantive law touching the
defendant's liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of
article 1903 of the Civil Code reads:
The state is liable in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it pertained to do the
act performed, in which case the provisions of the preceding article shall be applicable.
The supreme court of Spain in defining the scope of this paragraph said:
That the obligation to indemnify for damages which a third person causes to another by
his fault or negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7,
on that the person obligated, by his own fault or negligence, takes part in the act or
omission of the third party who caused the damage. It follows therefrom that the state, by
virtue of such provisions of law, is not responsible for the damages suffered by private
individuals in consequence of acts performed by its employees in the discharge of the
functions pertaining to their office, because neither fault nor even negligence can be
presumed on the part of the state in the organization of branches of public service and in
the appointment of its agents; on the contrary, we must presuppose all foresight humanly
possible on its part in order that each branch of service serves the general weal an that of
private persons interested in its operation. Between these latter and the state, therefore,
no relations of a private nature governed by the civil law can arise except in a case where
the state acts as a judicial person capable of acquiring rights and contracting obligations.
(Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)
That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise
out of fault or negligence; and whereas in the first article thereof. No. 1902, where the
general principle is laid down that where a person who by an act or omission causes
damage to another through fault or negligence, shall be obliged to repair the damage so
done, reference is made to acts or omissions of the persons who directly or indirectly
cause the damage, the following articles refers to this persons and imposes an identical
obligation upon those who maintain fixed relations of authority and superiority over the
authors of the damage, because the law presumes that in consequence of such relations
the evil caused by their own fault or negligence is imputable to them. This legal
presumption gives way to proof, however, because, as held in the last paragraph of article
1903, responsibility for acts of third persons ceases when the persons mentioned in said
article prove that they employed all the diligence of a good father of a family to avoid the
damage, and among these persons, called upon to answer in a direct and not a subsidiary
manner, are found, in addition to the mother or the father in a proper case, guardians and
owners or directors of an establishment or enterprise, the state, but not always, except
when it acts through the agency of a special agent, doubtless because and only in this
case, the fault or negligence, which is the original basis of this kind of objections, must
be presumed to lie with the state.
That although in some cases the state might by virtue of the general principle set forth in
article 1902 respond for all the damage that is occasioned to private parties by orders or
resolutions which by fault or negligence are made by branches of the central
administration acting in the name and representation of the state itself and as an external
expression of its sovereignty in the exercise of its executive powers, yet said article is not
applicable in the case of damages said to have been occasioned to the petitioners by an
executive official, acting in the exercise of his powers, in proceedings to enforce the
collections of certain property taxes owing by the owner of the property which they hold
in sublease.
That the responsibility of the state is limited by article 1903 to the case wherein it acts
through a special agent (and a special agent, in the sense in which these words are
employed, is one who receives a definite and fixed order or commission, foreign to the
exercise of the duties of his office if he is a special official) so that in representation of
the state and being bound to act as an agent thereof, he executes the trust confided to
him. This concept does not apply to any executive agent who is an employee of the
acting administration and who on his own responsibility performs the functions which
are inherent in and naturally pertain to his office and which are regulated by law and the
regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)
That according to paragraph 5 of article 1903 of the Civil Code and the principle laid
down in a decision, among others, of the 18th of May, 1904, in a damage case, the
responsibility of the state is limited to that which it contracts through a special agent,
duly empowered by a definite order or commission to perform some act or charged with
some definite purpose which gives rise to the claim, and not where the claim is based on
acts or omissions imputable to a public official charged with some administrative or
technical office who can be held to the proper responsibility in the manner laid down by
the law of civil responsibility. Consequently, the trial court in not so deciding and in
sentencing the said entity to the payment of damages, caused by an official of the second
class referred to, has by erroneous interpretation infringed the provisions of articles 1902
and 1903 of the Civil Code. (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)
It is, therefore, evidence that the State (the Government of the Philippine Islands) is only liable,
according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents,
officers and employees when they act as special agents within the meaning of paragraph 5 of
article 1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such
an agent.
For the foregoing reasons, the judgment appealed from must be reversed, without costs in this
instance. Whether the Government intends to make itself legally liable for the amount of
damages above set forth, which the plaintiff has sustained by reason of the negligent acts of one
of its employees, by legislative enactment and by appropriating sufficient funds therefor, we are
not called upon to determine. This matter rests solely with the Legislature and not with the
courts.
Arellano, C. J., Torres, Johnson, and Moreland, JJ., concur.
G.R. No. L-26400 February 29, 1972

VICTORIA AMIGABLE, plaintiff-appellant,
vs.
NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE
PHILIPPINES, defendants-appellees.
MAKALINTAL, J.:p
This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No.
R-5977, dismissing the plaintiff's complaint.
Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad
Estate in Cebu City as shown by Transfer Certificate of Title No. T-18060, which superseded
Transfer Certificate of Title No. RT-3272 (T-3435) issued to her by the Register of Deeds of
Cebu on February 1, 1924. No annotation in favor of the government of any right or interest in
the property appears at the back of the certificate. Without prior expropriation or negotiated sale,
the government used a portion of said lot, with an area of 6,167 square meters, for the
construction of the Mango and Gorordo Avenues.
It appears that said avenues were already existing in 1921 although "they were in bad condition
and very narrow, unlike the wide and beautiful avenues that they are now," and "that the tracing
of said roads was begun in 1924, and the formal construction in
1925." *
On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting
payment of the portion of her lot which had been appropriated by the government. The claim
was indorsed to the Auditor General, who disallowed it in his 9th Indorsement dated December
9, 1958. A copy of said indorsement was transmitted to Amigable's counsel by the Office of the
President on January 7, 1959.
On February 6, 1959 Amigable filed in the court a quo a complaint, which was later amended on
April 17, 1959 upon motion of the defendants, against the Republic of the Philippines and
Nicolas Cuenca, in his capacity as Commissioner of Public Highways for the recovery of
ownership and possession of the 6,167 square meters of land traversed by the Mango and
Gorordo Avenues. She also sought the payment of compensatory damages in the sum of
P50,000.00 for the illegal occupation of her land, moral damages in the sum of P25,000.00,
attorney's fees in the sum of P5,000.00 and the costs of the suit.
Within the reglementary period the defendants filed a joint answer denying the material
allegations of the complaint and interposing the following affirmative defenses, to wit: (1) that
the action was premature, the claim not having been filed first with the Office of the Auditor
General; (2) that the right of action for the recovery of any amount which might be due the
plaintiff, if any, had already prescribed; (3) that the action being a suit against the Government,
the claim for moral damages, attorney's fees and costs had no valid basis since as to these items
the Government had not given its consent to be sued; and (4) that inasmuch as it was the
province of Cebu that appropriated and used the area involved in the construction of Mango
Avenue, plaintiff had no cause of action against the defendants.
During the scheduled hearings nobody appeared for the defendants notwithstanding due notice,
so the trial court proceeded to receive the plaintiff's evidence ex parte. On July 29, 1959 said
court rendered its decision holding that it had no jurisdiction over the plaintiff's cause of action
for the recovery of possession and ownership of the portion of her lot in question on the ground
that the government cannot be sued without its consent; that it had neither original nor appellate
jurisdiction to hear, try and decide plaintiff's claim for compensatory damages in the sum of
P50,000.00, the same being a money claim against the government; and that the claim for moral
damages had long prescribed, nor did it have jurisdiction over said claim because the
government had not given its consent to be sued. Accordingly, the complaint was dismissed.
Unable to secure a reconsideration, the plaintiff appealed to the Court of Appeals, which
subsequently certified the case to Us, there being no question of fact involved.
The issue here is whether or not the appellant may properly sue the government under the facts
of the case.
In the case of Ministerio vs. Court of First Instance of Cebu, 1 involving a claim for payment of
the value of a portion of land used for the widening of the Gorordo Avenue in Cebu City, this
Court, through Mr. Justice Enrique M. Fernando, held that where the government takes away
property from a private landowner for public use without going through the legal process of
expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the
government without thereby violating the doctrine of governmental immunity from suit without
its consent. We there said: .
... . If the constitutional mandate that the owner be compensated for 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 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 still be
appropriately invoked.
Considering that no annotation in favor of the government appears at the back of her certificate
of title and that she has not executed any deed of conveyance of any portion of her lot to the
government, the appellant remains the owner of the whole lot. As registered owner, she could
bring an action to recover possession of the portion of land in question at anytime because
possession is one of the attributes of ownership. However, since restoration of possession of said
portion by the government is neither convenient nor feasible at this time because it is now and
has been used for road purposes, the only relief available is for the government to make due
compensation which it could and should have done years ago. To determine the due
compensation for the land, the basis should be the price or value thereof at the time of the
taking. 2
As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on
the price of the land from the time it was taken up to the time that payment is made by the
government. 3 In addition, the government should pay for attorney's fees, the amount of which
should be fixed by the trial court after hearing.
WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the
court a quo for the determination of compensation, including attorney's fees, to which the
appellant is entitled as above indicated. No pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo, Villamor and
Makasiar JJ., concur.
G.R. No. 70853 March 12, 1987

REPUBLIC OF THE PHILIPPINES, petitioner-appellee,
vs.
PABLO FELICIANO and INTERMEDIATE APPELLATE COURT, respondentsappellants.
YAP, J.:
Petitioner seeks the review of the decision of the Intermediate Appellate Court dated April 30,
1985 reversing the order of the Court of First Instance of Camarines Sur, Branch VI, dated
August 21, 1980, which dismissed the complaint of respondent Pablo Feliciano for recovery of
ownership and possession of a parcel of land on the ground of non-suability of the State.
The background of the present controversy may be briefly summarized as follows:
On January 22, 1970, respondent Feliciano filed a complaint with the then Court of First
Instance of Camarines Sur against the Republic of the Philippines, represented by the Land
Authority, for the recovery of ownership and possession of a parcel of land, consisting of four
(4) lots with an aggregate area of 1,364.4177 hectares, situated in the Barrio of Salvacion,
Municipality of Tinambac, Camarines Sur. Plaintiff alleged that he bought the property in
question from Victor Gardiola by virtue of a Contract of Sale dated May 31, 1952, followed by a
Deed of Absolute Sale on October 30, 1954; that Gardiola had acquired the property by purchase
from the heirs of Francisco Abrazado whose title to the said property was evidenced by an
informacion posesoria that upon plaintiff's purchase of the property, he took actual possession of
the same, introduced various improvements therein and caused it to be surveyed in July 1952,
which survey was approved by the Director of Lands on October 24, 1954; that on November 1,
1954, President Ramon Magsaysay issued Proclamation No. 90 reserving for settlement
purposes, under the administration of the National Resettlement and Rehabilitation
Administration (NARRA), a tract of land situated in the Municipalities of Tinambac and Siruma,
Camarines Sur, after which the NARRA and its successor agency, the Land Authority, started
sub-dividing and distributing the land to the settlers; that the property in question, while located
within the reservation established under Proclamation No. 90, was the private property of
plaintiff and should therefore be excluded therefrom. Plaintiff prayed that he be declared the
rightful and true owner of the property in question consisting of 1,364.4177 hectares; that his
title of ownership based on informacion posesoria of his predecessor-in-interest be declared
legal valid and subsisting and that defendant be ordered to cancel and nullify all awards to the
settlers.
The defendant, represented by the Land Authority, filed an answer, raising by way of affirmative
defenses lack of sufficient cause of action and prescription.
On August 29, 1970, the trial court, through Judge Rafael S. Sison, rendered a decision declaring
Lot No. 1, with an area of 701.9064 hectares, to be the private property of the plaintiff, "being
covered by a possessory information title in the name of his predecessor-in-interest" and
declaring said lot excluded from the NARRA settlement reservation. The court declared the rest
of the property claimed by plaintiff, i.e. Lots 2, 3 and 4, reverted to the public domain.
A motion to intervene and to set aside the decision of August 29, 1970 was filed by eighty-six
(86) settlers, together with the barrio council of Pag-asay, alleging among other things that
intervenors had been in possession of the land in question for more than twenty (20) years under
claim of ownership.
On January 25, 1971, the court a quo reconsidered its decision, reopened the case and directed
the intervenors to file their corresponding pleadings and present their evidence; all evidence
already presented were to remain but plaintiff, as well as the Republic of the Philippines, could
present additional evidence if they so desire. The plaintiff presented additional evidence on July
30, 1971, and the case was set for hearing for the reception of intervenors' evidence on August
30 and August 31, 1971.
On August 30, 1971, the date set for the presentation of the evidence for intervenors, the latter
did not appear but submitted a motion for postponement and resetting of the hearing on the next
day, August 31, 1971. The trial court denied the motion for postponement and allowed plaintiff
to offer his evidence "en ausencia," after which the case would be deemed submitted for
decision. On the following day, August 31, 1971, Judge Sison rendered a decision reiterating his
decision of August 29, 1970.
A motion for reconsideration was immediately filed by the intervenors. But before this motion
was acted upon, plaintiff filed a motion for execution, dated November 18, 1971. On December
10, 1971, the lower court, this time through Judge Miguel Navarro, issued an order denying the
motion for execution and setting aside the order denying intervenors' motion for postponement.
The case was reopened to allow intervenors to present their evidence. Unable to secure a
reconsideration of Judge Navarro's order, the plaintiff went to the Intermediate Appellate Court
on a petition for certiorari. Said petition was, however, denied by the Intermediate Appellate
Court, and petitioners brought the matter to this Court in G.R. No. 36163, which was denied on
May 3, 1973 Consequently, the case was remanded to the court a quo for further proceedings.
On August 31, 1970, intervenors filed a motion to dismiss, principally on the ground that the
Republic of the Philippines cannot be sued without its consent and hence the action cannot
prosper. The motion was opposed by the plaintiff.
On August 21, 1980, the trial court, through Judge Esteban Lising, issued the questioned order
dismissing the case for lack of jurisdiction. Respondent moved for reconsideration, while the
Solicitor General, on behalf of the Republic of the Philippines filed its opposition thereto,
maintaining that the dismissal was proper on the ground of non-suability of the State and also on
the ground that the existence and/or authenticity of the purported possessory information title of
the respondents' predecessor-in-interest had not been demonstrated and that at any rate, the same
is not evidence of title, or if it is, its efficacy has been lost by prescription and laches.
Upon denial of the motion for reconsideration, plaintiff again went to the Intermediate Appellate
Court on petition for certiorari. On April 30, 1985, the respondent appellate court rendered its
decision reversing the order of Judge Lising and remanding the case to the court a quo for
further proceedings. Hence this petition.
We find the petition meritorious. The doctrine of non-suability of the State has proper
application in this case. The plaintiff has impleaded the Republic of the Philippines as defendant
in an action for recovery of ownership and possession of a parcel of land, bringing the State to
court just like any private person who is claimed to be usurping a piece of property. A suit for
the recovery of property is not an action in rem, but an action in personam. 1 It is an action
directed against a specific party or parties, and any judgment therein binds only such party or
parties. The complaint filed by plaintiff, the private respondent herein, is directed against the
Republic of the Philippines, represented by the Land Authority, a governmental agency created
by Republic Act No. 3844.
By its caption and its allegation and prayer, the complaint is clearly a suit against the State,
which under settled jurisprudence is not permitted, except upon a showing that the State has
consented to be sued, either expressly or by implication through the use of statutory language
too plain to be misinterpreted. 2 There is no such showing in the instant case. Worse, the
complaint itself fails to allege the existence of such consent. This is a fatal defect, 3 and on this
basis alone, the complaint should have been dismissed.
The failure of the petitioner to assert the defense of immunity from suit when the case was tried
before the court a quo, as alleged by private respondent, is not fatal. It is now settled that such
defense "may be invoked by the courts sua sponte at any stage of the proceedings." 4
Private respondent contends that the consent of petitioner may be read from the Proclamation
itself, when it established the reservation " subject to private rights, if any there be. " We do not
agree. No such consent can be drawn from the language of the Proclamation. The exclusion of
existing private rights from the reservation established by Proclamation No. 90 can not be
construed as a waiver of the immunity of the State from suit. Waiver of immunity, being a
derogation of sovereignty, will not be inferred lightly. but must be construed in strictissimi juris.
5
Moreover, the Proclamation is not a legislative act. The consent of the State to be sued must
emanate from statutory authority. Waiver of State immunity can only be made by an act of the
legislative body.
Neither is there merit in respondent's submission, which the respondent appellate court
sustained, on the basis of our decision in the Begosa case, 6 that the present action is not a suit
against the State within the rule of State immunity from suit, because plaintiff does not seek to
divest the Government of any of its lands or its funds. It is contended that the complaint involves
land not owned by the State, but private land belonging to the plaintiff, hence the Government is
not being divested of any of its properties. There is some sophistry involved in this argument,
since the character of the land sought to be recovered still remains to be established, and the
plaintiff's action is directed against the State precisely to compel the latter to litigate the
ownership and possession of the property. In other words, the plaintiff is out to establish that he
is the owner of the land in question based, incidentally, on an informacion posesoria of dubious
value, and he seeks to establish his claim of ownership by suing the Republic of the Philippines
in an action in personam.
The inscription in the property registry of an informacion posesoria under the Spanish Mortgage
Law was a means provided by the law then in force in the Philippines prior to the transfer of
sovereignty from Spain to the United States of America, to record a claimant's actual possession
of a piece of land, established through an ex parte proceeding conducted in accordance with
prescribed rules. 7 Such inscription merely furnishes, at best, prima facie evidence of the fact
that at the time the proceeding was held, the claimant was in possession of the land under a
claim of right as set forth in his application. 8 The possessory information could ripen into a
record of ownership after the lapse of 20 years (later reduced to 10 years), upon the fulfillment
of the requisites prescribed in Article 393 of the Spanish Mortgage Law.
There is no showing in the case at bar that the informacion posesoria held by the respondent had
been converted into a record of ownership. Such possessory information, therefore, remained at
best mere prima facie evidence of possession. Using this possessory information, the respondent
could have applied for judicial confirmation of imperfect title under the Public Land Act, which
is an action in rem. However, having failed to do so, it is rather late for him to pursue this
avenue at this time. Respondent must also contend, as the records disclose, with the fact
admitted by him and stated in the decision of the Court a quo that settlers have been occupying
and cultivating the land in question since even before the outbreak of the war, which puts in
grave doubt his own claim of possession.
Worthy of note is the fact, as pointed out by the Solicitor General, that the informacion
posesoria registered in the Office of the Register of Deed of Camarines Sur on September 23,
1952 was a "reconstituted" possessory information; it was "reconstituted from the duplicate
presented to this office (Register of Deeds) by Dr. Pablo Feliciano," without the submission of
proof that the alleged duplicate was authentic or that the original thereof was lost. Reconstitution
can be validly made only in case of loss of the original. 10 These circumstances raise grave
doubts as to the authenticity and validity of the "informacion posesoria" relied upon by
respondent Feliciano. Adding to the dubiousness of said document is the fact that "possessory
information calls for an area of only 100 hectares," 11 whereas the land claimed by respondent
Feliciano comprises 1,364.4177 hectares, later reduced to 701-9064 hectares. Courts should be
wary in accepting "possessory information documents, as well as other purportedly old Spanish
titles, as proof of alleged ownership of lands.
WHEREFORE, judgment is hereby rendered reversing and setting aside the appealed decision
of the Intermediate Appellate Court, dated April 30, 1985, and affirming the order of the court a
quo, dated August 21, 1980, dismissing the complaint filed by respondent Pablo Feliciano
against the Republic of the Philippines. No costs.
SO ORDERED.
Narvasa, Cruz, Feliciano, Gancayco and Sarmiento, JJ., concur. Melencio-Herrera, J., is on
leave.
G.R. No. L-35645 May 22, 1985

UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I.
COLLINS and ROBERT GOHIER, petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and
ELIGIO DE GUZMAN & CO., INC., respondents.
Sycip, Salazar, Luna & Manalo & Feliciano Law for petitioners.
Albert, Vergara, Benares, Perias & Dominguez Law Office for respondents.
ABAD SANTOS, J.:

This is a petition to review, set aside certain orders and restrain the respondent judge from trying
Civil Case No. 779M of the defunct Court of First Instance of Rizal.
The factual background is as follows:
At times material to this case, the United States of America had a naval base in Subic, Zambales.
The base was one of those provided in the Military Bases Agreement between the Philippines
and the United States.
Sometime in May, 1972, the United States invited the submission of bids for the following
projects
1. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to shoreline
revetment, NAVBASE Subic; and repair to Leyte Wharf approach, NAVBASE Subic Bay,
Philippines.
Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequent
thereto, the company received from the United States two telegrams requesting it to confirm its
price proposals and for the name of its bonding company. The company complied with the
requests. [In its complaint, the company alleges that the United States had accepted its bids
because "A request to confirm a price proposal confirms the acceptance of a bid pursuant to
defendant United States' bidding practices." (Rollo, p. 30.) The truth of this allegation has not
been tested because the case has not reached the trial stage.]
In June, 1972, the company received a letter which was signed by Wilham I. Collins, Director,
Contracts Division, Naval Facilities Engineering Command, Southwest Pacific, Department of
the Navy of the United States, who is one of the petitioners herein. The letter said that the
company did not qualify to receive an award for the projects because of its previous
unsatisfactory performance rating on a repair contract for the sea wall at the boat landings of the
U.S. Naval Station in Subic Bay. The letter further said that the projects had been awarded to
third parties. In the abovementioned Civil Case No. 779-M, the company sued the United States
of America and Messrs. James E. Galloway, William I. Collins and Robert Gohier all members
of the Engineering Command of the U.S. Navy. The complaint is to order the defendants to
allow the plaintiff to perform the work on the projects and, in the event that specific
performance was no longer possible, to order the defendants to pay damages. The company also
asked for the issuance of a writ of preliminary injunction to restrain the defendants from entering
into contracts with third parties for work on the projects.
The defendants entered their special appearance for the purpose only of questioning the
jurisdiction of this court over the subject matter of the complaint and the persons of defendants,
the subject matter of the complaint being acts and omissions of the individual defendants as
agents of defendant United States of America, a foreign sovereign which has not given her
consent to this suit or any other suit for the causes of action asserted in the complaint." (Rollo, p.
50.)
Subsequently the defendants filed a motion to dismiss the complaint which included an
opposition to the issuance of the writ of preliminary injunction. The company opposed the
motion. The trial court denied the motion and issued the writ. The defendants moved twice to
reconsider but to no avail. Hence the instant petition which seeks to restrain perpetually the
proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the trial court.
The petition is highly impressed with merit.
The traditional rule of State immunity exempts a State from being sued in the courts of another
State without its consent or waiver. This rule is a necessary consequence of the principles of
independence and equality of States. However, the rules of International Law are not petrified;
they are constantly developing and evolving. And because the activities of states have
multiplied, it has been necessary to distinguish them-between sovereign and governmental acts
(jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that
State immunity now extends only to acts jure imperil The restrictive application of State
immunity is now the rule in the United States, the United Kingdom and other states in western
Europe. (See Coquia and Defensor Santiago, Public International Law, pp. 207-209 [1984].)
The respondent judge recognized the restrictive doctrine of State immunity when he said in his
Order denying the defendants' (now petitioners) motion: " A distinction should be made between
a strictly governmental function of the sovereign state from its private, proprietary or nongovernmental acts (Rollo, p. 20.) However, the respondent judge also said: "It is the Court's
considered opinion that entering into a contract for the repair of wharves or shoreline is certainly
not a governmental function altho it may partake of a public nature or character. As aptly pointed
out by plaintiff's counsel in his reply citing the ruling in the case of Lyons, Inc., [104 Phil. 594
(1958)], and which this Court quotes with approval, viz.:
It is however contended that when a sovereign state enters into a contract with a
private person, the state can be sued upon the theory that it has descended to the
level of an individual from which it can be implied that it has given its consent to
be sued under the contract. ...
xxx xxx xxx
We agree to the above contention, and considering that the United States
government, through its agency at Subic Bay, entered into a contract with
appellant for stevedoring and miscellaneous labor services within the Subic Bay
Area, a U.S. Naval Reservation, it is evident that it can bring an action before our
courts for any contractual liability that that political entity may assume under the
contract. The trial court, therefore, has jurisdiction to entertain this case ... (Rollo,
pp. 20-21.)
The reliance placed on Lyons by the respondent judge is misplaced for the following reasons:
In Harry Lyons, Inc. vs. The United States of America, supra, plaintiff brought suit in the Court
of First Instance of Manila to collect several sums of money on account of a contract between
plaintiff and defendant. The defendant filed a motion to dismiss on the ground that the court had
no jurisdiction over defendant and over the subject matter of the action. The court granted the
motion on the grounds that: (a) it had no jurisdiction over the defendant who did not give its
consent to the suit; and (b) plaintiff failed to exhaust the administrative remedies provided in the
contract. The order of dismissal was elevated to this Court for review.
In sustaining the action of the lower court, this Court said:
It appearing in the complaint that appellant has not complied with the procedure
laid down in Article XXI of the contract regarding the prosecution of its claim
against the United States Government, or, stated differently, it has failed to first
exhaust its administrative remedies against said Government, the lower court
acted properly in dismissing this case.(At p. 598.)
It can thus be seen that the statement in respect of the waiver of State immunity from suit was
purely gratuitous and, therefore, obiter so that it has no value as an imperative authority.
The restrictive application of State immunity is proper only when the proceedings arise out of
commercial transactions of the foreign sovereign, its commercial activities or economic affairs.
Stated differently, a State may be said to have descended to the level of an individual and can
thus be deemed to have tacitly given its consent to be sued only when it enters into business
contracts. It does not apply where the contract relates to the exercise of its sovereign functions.
In this case the projects are an integral part of the naval base which is devoted to the defense of
both the United States and the Philippines, indisputably a function of the government of the
highest order; they are not utilized for nor dedicated to commercial or business purposes.
That the correct test for the application of State immunity is not the conclusion of a contract by a
State but the legal nature of the act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that
case the plaintiffs leased three apartment buildings to the United States of America for the use of
its military officials. The plaintiffs sued to recover possession of the premises on the ground that
the term of the leases had expired. They also asked for increased rentals until the apartments
shall have been vacated.
The defendants who were armed forces officers of the United States moved to dismiss the suit
for lack of jurisdiction in the part of the court. The Municipal Court of Manila granted the
motion to dismiss; sustained by the Court of First Instance, the plaintiffs went to this Court for
review on certiorari. In denying the petition, this Court said:
On the basis of the foregoing considerations we are of the belief and we hold that
the real party defendant in interest is the Government of the United States of
America; that any judgment for back or Increased rentals or damages will have to
be paid not by defendants Moore and Tillman and their 64 co-defendants but by
the said U.S. Government. On the basis of the ruling in the case of Land vs.
Dollar already cited, and on what we have already stated, the present action must
be considered as one against the U.S. Government. It is clear hat the courts of the
Philippines including the Municipal Court of Manila have no jurisdiction over the
present case for unlawful detainer. The question of lack of jurisdiction was raised
and interposed at the very beginning of the action. The U.S. Government has not ,
given its consent to the filing of this suit which is essentially against her, though
not in name. Moreover, this is not only a case of a citizen filing a suit against his
own Government without the latter's consent but it is of a citizen filing an action
against a foreign government without said government's consent, which renders
more obvious the lack of jurisdiction of the courts of his country. The principles
of law behind this rule are so elementary and of such general acceptance that we
deem it unnecessary to cite authorities in support thereof. (At p. 323.)
In Syquia,the United States concluded contracts with private individuals but the contracts
notwithstanding the States was not deemed to have given or waived its consent to be sued for the
reason that the contracts were for jure imperii and not for jure gestionis.
WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set
aside and Civil Case No. is dismissed. Costs against the private respondent.
Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana, * Escolin, Relova, Gutierrez, Jr.,
De la Fuente, Cuevas and Alampay, JJ., concur.
Fernando, C.J., took no part.
G.R. No. 101949 December 1, 1994

THE HOLY SEE, petitioner,
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court
of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC., respondents.
Padilla Law Office for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.
QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set
aside the Orders dated June 20, 1991 and September 19, 1991 of the Regional Trial Court,
Branch 61, Makati, Metro Manila in Civil Case No. 90-183.
The Order dated June 20, 1991 denied the motion of petitioner to dismiss the complaint in Civil
Case No. 90-183, while the Order dated September 19, 1991 denied the motion for
reconsideration of the June 20,1991 Order.
Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is
represented in the Philippines by the Papal Nuncio.
Private respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged in the
real estate business.
This petition arose from a controversy over a parcel of land consisting of 6,000 square meters
(Lot 5-A, Transfer Certificate of Title No. 390440) located in the Municipality of Paraaque,
Metro Manila and registered in the name of petitioner.
Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of
Title Nos. 271108 and 265388 respectively and registered in the name of the Philippine Realty
Corporation (PRC).
The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent
to the sellers. Later, Licup assigned his rights to the sale to private respondent.
In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute
arose as to who of the parties has the responsibility of evicting and clearing the land of squatters.
Complicating the relations of the parties was the sale by petitioner of Lot 5-A to Tropicana
Properties and Development Corporation (Tropicana).
I
On January 23, 1990, private respondent filed a complaint with the Regional Trial Court, Branch
61, Makati, Metro Manila for annulment of the sale of the three parcels of land, and specific
performance and damages against petitioner, represented by the Papal Nuncio, and three other
defendants: namely, Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana (Civil Case No.
90-183).
The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner and
the PRC, agreed to sell to Ramon Licup Lots 5-A, 5-B and 5-D at the price of P1,240.00 per
square meters; (2) the agreement to sell was made on the condition that earnest money of
P100,000.00 be paid by Licup to the sellers, and that the sellers clear the said lots of squatters
who were then occupying the same; (3) Licup paid the earnest money to Msgr. Cirilos; (4) in the
same month, Licup assigned his rights over the property to private respondent and informed the
sellers of the said assignment; (5) thereafter, private respondent demanded from Msgr. Cirilos
that the sellers fulfill their undertaking and clear the property of squatters; however, Msgr.
Cirilos informed private respondent of the squatters' refusal to vacate the lots, proposing instead
either that private respondent undertake the eviction or that the earnest money be returned to the
latter; (6) private respondent counterproposed that if it would undertake the eviction of the
squatters, the purchase price of the lots should be reduced from P1,240.00 to P1,150.00 per
square meter; (7) Msgr. Cirilos returned the earnest money of P100,000.00 and wrote private
respondent giving it seven days from receipt of the letter to pay the original purchase price in
cash; (8) private respondent sent the earnest money back to the sellers, but later discovered that
on March 30, 1989, petitioner and the PRC, without notice to private respondent, sold the lots to
Tropicana, as evidenced by two separate Deeds of Sale, one over Lot 5-A, and another over Lots
5-B and 5-D; and that the sellers' transfer certificate of title over the lots were cancelled,
transferred and registered in the name of Tropicana; (9) Tropicana induced petitioner and the
PRC to sell the lots to it and thus enriched itself at the expense of private respondent; (10)
private respondent demanded the rescission of the sale to Tropicana and the reconveyance of the
lots, to no avail; and (11) private respondent is willing and able to comply with the terms of the
contract to sell and has actually made plans to develop the lots into a townhouse project, but in
view of the sellers' breach, it lost profits of not less than P30,000.000.00.
Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner
and the PRC on the one hand, and Tropicana on the other; (2) the reconveyance of the lots in
question; (3) specific performance of the agreement to sell between it and the owners of the lots;
and (4) damages.
On June 8, 1990, petitioner and Msgr. Cirilos separately moved to dismiss the complaint
petitioner for lack of jurisdiction based on sovereign immunity from suit, and Msgr. Cirilos for
being an improper party. An opposition to the motion was filed by private respondent.
On June 20, 1991, the trial court issued an order denying, among others, petitioner's motion to
dismiss after finding that petitioner "shed off [its] sovereign immunity by entering into the
business contract in question" (Rollo, pp. 20-21).
On July 12, 1991, petitioner moved for reconsideration of the order. On August 30, 1991,
petitioner filed a "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation
for claim of Immunity as a Jurisdictional Defense." So as to facilitate the determination of its
defense of sovereign immunity, petitioner prayed that a hearing be conducted to allow it to
establish certain facts upon which the said defense is based. Private respondent opposed this
motion as well as the motion for reconsideration.
On October 1, 1991, the trial court issued an order deferring the resolution on the motion for
reconsideration until after trial on the merits and directing petitioner to file its answer (Rollo, p.
22).
Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of
sovereign immunity only on its own behalf and on behalf of its official representative, the Papal
Nuncio.
On December 9, 1991, a Motion for Intervention was filed before us by the Department of
Foreign Affairs, claiming that it has a legal interest in the outcome of the case as regards the
diplomatic immunity of petitioner, and that it "adopts by reference, the allegations contained in
the petition of the Holy See insofar as they refer to arguments relative to its claim of sovereign
immunity from suit" (Rollo, p. 87).
Private respondent opposed the intervention of the Department of Foreign Affairs. In compliance
with the resolution of this Court, both parties and the Department of Foreign Affairs submitted
their respective memoranda.
II
A preliminary matter to be threshed out is the procedural issue of whether the petition for
certiorari under Rule 65 of the Revised Rules of Court can be availed of to question the order
denying petitioner's motion to dismiss. The general rule is that an order denying a motion to
dismiss is not reviewable by the appellate courts, the remedy of the movant being to file his
answer and to proceed with the hearing before the trial court. But the general rule admits of
exceptions, and one of these is when it is very clear in the records that the trial court has no
alternative but to dismiss the complaint (Philippine National Bank v. Florendo, 206 SCRA 582
[1992]; Zagada v. Civil Service Commission, 216 SCRA 114 [1992]. In such a case, it would be
a sheer waste of time and energy to require the parties to undergo the rigors of a trial.
The other procedural question raised by private respondent is the personality or legal interest of
the Department of Foreign Affairs to intervene in the case in behalf of the Holy See (Rollo, pp.
186-190).
In Public International Law, when a state or international agency wishes to plead sovereign or
diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is
sued to convey to the court that said defendant is entitled to immunity.
In the United States, the procedure followed is the process of "suggestion," where the foreign
state or the international organization sued in an American court requests the Secretary of State
to make a determination as to whether it is entitled to immunity. If the Secretary of State finds
that the defendant is immune from suit, he, in turn, asks the Attorney General to submit to the
court a "suggestion" that the defendant is entitled to immunity. In England, a similar procedure
is followed, only the Foreign Office issues a certification to that effect instead of submitting a
"suggestion" (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign
Sovereign Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).
In the Philippines, the practice is for the foreign government or the international organization to
first secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how
the Philippine Foreign Office conveys its endorsement to the courts varies. In International
Catholic Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign
Affairs just sent a letter directly to the Secretary of Labor and Employment, informing the latter
that the respondent-employer could not be sued because it enjoyed diplomatic immunity. In
World Health Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs
sent the trial court a telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S.
Embassy asked the Secretary of Foreign Affairs to request the Solicitor General to make, in
behalf of the Commander of the United States Naval Base at Olongapo City, Zambales, a
"suggestion" to respondent Judge. The Solicitor General embodied the "suggestion" in a
Manifestation and Memorandum as amicus curiae.
In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs
moved with this Court to be allowed to intervene on the side of petitioner. The Court allowed the
said Department to file its memorandum in support of petitioner's claim of sovereign immunity.
In some cases, the defense of sovereign immunity was submitted directly to the local courts by
the respondents through their private counsels (Raquiza v. Bradford, 75 Phil. 50 [1945];
Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America v.
Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign states bypass
the Foreign Office, the courts can inquire into the facts and make their own determination as to
the nature of the acts and transactions involved.
III
The burden of the petition is that respondent trial court has no jurisdiction over petitioner, being
a foreign state enjoying sovereign immunity. On the other hand, private respondent insists that
the doctrine of non-suability is not anymore absolute and that petitioner has divested itself of
such a cloak when, of its own free will, it entered into a commercial transaction for the sale of a
parcel of land located in the Philippines.
A. The Holy See
Before we determine the issue of petitioner's non-suability, a brief look into its status as a
sovereign state is in order.
Before the annexation of the Papal States by Italy in 1870, the Pope was the monarch and he, as
the Holy See, was considered a subject of International Law. With the loss of the Papal States
and the limitation of the territory under the Holy See to an area of 108.7 acres, the position of
the Holy See in International Law became controversial (Salonga and Yap, Public International
Law 36-37 [1992]).
In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy recognized the
exclusive dominion and sovereign jurisdiction of the Holy See over the Vatican City. It also
recognized the right of the Holy See to receive foreign diplomats, to send its own diplomats to
foreign countries, and to enter into treaties according to International Law (Garcia, Questions
and Problems In International Law, Public and Private 81 [1948]).
The Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to
the Holy See absolute and visible independence and of guaranteeing to it indisputable
sovereignty also in the field of international relations" (O'Connell, I International Law 311
[1965]).
In view of the wordings of the Lateran Treaty, it is difficult to determine whether the statehood is
vested in the Holy See or in the Vatican City. Some writers even suggested that the treaty created
two international persons the Holy See and Vatican City (Salonga and Yap, supra, 37).
The Vatican City fits into none of the established categories of states, and the attribution to it of
"sovereignty" must be made in a sense different from that in which it is applied to other states
(Fenwick, International Law 124-125 [1948]; Cruz, International Law 37 [1991]). In a
community of national states, the Vatican City represents an entity organized not for political but
for ecclesiastical purposes and international objects. Despite its size and object, the Vatican City
has an independent government of its own, with the Pope, who is also head of the Roman
Catholic Church, as the Holy See or Head of State, in conformity with its traditions, and the
demands of its mission in the world. Indeed, the world-wide interests and activities of the
Vatican City are such as to make it in a sense an "international state" (Fenwick, supra., 125;
Kelsen, Principles of International Law 160 [1956]).
One authority wrote that the recognition of the Vatican City as a state has significant implication
that it is possible for any entity pursuing objects essentially different from those pursued by
states to be invested with international personality (Kunz, The Status of the Holy See in
International Law, 46 The American Journal of International Law 308 [1952]).
Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the Holy
See and not in the name of the Vatican City, one can conclude that in the Pope's own view, it is
the Holy See that is the international person.
The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The
Holy See, through its Ambassador, the Papal Nuncio, has had diplomatic representations with
the Philippine government since 1957 (Rollo, p. 87). This appears to be the universal practice in
international relations.
B. Sovereign Immunity
As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally
accepted principles of International Law. Even without this affirmation, such principles of
International Law are deemed incorporated as part of the law of the land as a condition and
consequence of our admission in the society of nations (United States of America v. Guinto, 182
SCRA 644 [1990]).
There are two conflicting concepts of sovereign immunity, each widely held and firmly
established. According to the classical or absolute theory, a sovereign cannot, without its
consent, be made a respondent in the courts of another sovereign. According to the newer or
restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or
acts jure imperii of a state, but not with regard to private acts or acts jure gestionis
(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago,
Public International Law 194 [1984]).
Some states passed legislation to serve as guidelines for the executive or judicial determination
when an act may be considered as jure gestionis. The United States passed the Foreign
Sovereign Immunities Act of 1976, which defines a commercial activity as "either a regular
course of commercial conduct or a particular commercial transaction or act." Furthermore, the
law declared that the "commercial character of the activity shall be determined by reference to
the nature of the course of conduct or particular transaction or act, rather than by reference to its
purpose." The Canadian Parliament enacted in 1982 an Act to Provide For State Immunity in
Canadian Courts. The Act defines a "commercial activity" as any particular transaction, act or
conduct or any regular course of conduct that by reason of its nature, is of a "commercial
character."
The restrictive theory, which is intended to be a solution to the host of problems involving the
issue of sovereign immunity, has created problems of its own. Legal treatises and the decisions
in countries which follow the restrictive theory have difficulty in characterizing whether a
contract of a sovereign state with a private party is an act jure gestionis or an act jure imperii.
The restrictive theory came about because of the entry of sovereign states into purely
commercial activities remotely connected with the discharge of governmental functions. This is
particularly true with respect to the Communist states which took control of nationalized
business activities and international trading.
This Court has considered the following transactions by a foreign state with private parties as
acts jure imperii: (1) the lease by a foreign government of apartment buildings for use of its
military officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of public bidding for the
repair of a wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and
(3) the change of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88
[1988]).
On the other hand, this Court has considered the following transactions by a foreign state with
private parties as acts jure gestionis: (1) the hiring of a cook in the recreation center, consisting
of three restaurants, a cafeteria, a bakery, a store, and a coffee and pastry shop at the John Hay
Air Station in Baguio City, to cater to American servicemen and the general public (United
States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for the operation of
barber shops in Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA
644 [1990]). The operation of the restaurants and other facilities open to the general public is
undoubtedly for profit as a commercial and not a governmental activity. By entering into the
employment contract with the cook in the discharge of its proprietary function, the United States
government impliedly divested itself of its sovereign immunity from suit.
In the absence of legislation defining what activities and transactions shall be considered
"commercial" and as constituting acts jure gestionis, we have to come out with our own
guidelines, tentative they may be.
Certainly, the mere entering into a contract by a foreign state with a private party cannot be the
ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the
foreign state is engaged in the activity in the regular course of business. If the foreign state is not
engaged regularly in a business or trade, the particular act or transaction must then be tested by
its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act
jure imperii, especially when it is not undertaken for gain or profit.
As held in United States of America v. Guinto, (supra):
There is no question that the United States of America, like any other state, will
be deemed to have impliedly waived its non-suability if it has entered into a
contract in its proprietary or private capacity. It is only when the contract
involves its sovereign or governmental capacity that no such waiver may be
implied.
In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate
business, surely the said transaction can be categorized as an act jure gestionis. However,
petitioner has denied that the acquisition and subsequent disposal of Lot 5-A were made for
profit but claimed that it acquired said property for the site of its mission or the Apostolic
Nunciature in the Philippines. Private respondent failed to dispute said claim.
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation
was made not for commercial purpose, but for the use of petitioner to construct thereon the
official place of residence of the Papal Nuncio. The right of a foreign sovereign to acquire
property, real or personal, in a receiving state, necessary for the creation and maintenance of its
diplomatic mission, is recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts.
20-22). This treaty was concurred in by the Philippine Senate and entered into force in the
Philippines on November 15, 1965.
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and
administrative jurisdiction of the receiving state over any real action relating to private
immovable property situated in the territory of the receiving state which the envoy holds on
behalf of the sending state for the purposes of the mission. If this immunity is provided for a
diplomatic envoy, with all the more reason should immunity be recognized as regards the
sovereign itself, which in this case is the Holy See.
The decision to transfer the property and the subsequent disposal thereof are likewise clothed
with a governmental character. Petitioner did not sell Lot
5-A for profit or gain. It merely wanted to dispose off the same because the squatters living
thereon made it almost impossible for petitioner to use it for the purpose of the donation. The
fact that squatters have occupied and are still occupying the lot, and that they stubbornly refuse
to leave the premises, has been admitted by private respondent in its complaint (Rollo, pp. 26,
27).
The issue of petitioner's non-suability can be determined by the trial court without going to trial
in the light of the pleadings, particularly the admission of private respondent. Besides, the
privilege of sovereign immunity in this case was sufficiently established by the Memorandum
and Certification of the Department of Foreign Affairs. As the department tasked with the
conduct of the Philippines' foreign relations (Administrative Code of 1987, Book IV, Title I, Sec.
3), the Department of Foreign Affairs has formally intervened in this case and officially certified
that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the
Philippines exempt from local jurisdiction and entitled to all the rights, privileges and
immunities of a diplomatic mission or embassy in this country (Rollo, pp. 156-157). The
determination of the executive arm of government that a state or instrumentality is entitled to
sovereign or diplomatic immunity is a political question that is conclusive upon the courts
(International Catholic Migration Commission v. Calleja, 190 SCRA 130 [1990]). Where the
plea of immunity is recognized and affirmed by the executive branch, it is the duty of the courts
to accept this claim so as not to embarrass the executive arm of the government in conducting
the country's foreign relations (World Health Organization v. Aquino, 48 SCRA 242 [1972]). As
in International Catholic Migration Commission and in World Health Organization, we abide by
the certification of the Department of Foreign Affairs.
Ordinarily, the procedure would be to remand the case and order the trial court to conduct a
hearing to establish the facts alleged by petitioner in its motion. In view of said certification,
such procedure would however be pointless and unduly circuitous (Ortigas & Co. Ltd.
Partnership v. Judge Tirso Velasco, G.R. No. 109645, July 25, 1994).
IV
Private respondent is not left without any legal remedy for the redress of its grievances. Under
both Public International Law and Transnational Law, a person who feels aggrieved by the acts
of a foreign sovereign can ask his own government to espouse his cause through diplomatic
channels.
Private respondent can ask the Philippine government, through the Foreign Office, to espouse its
claims against the Holy See. Its first task is to persuade the Philippine government to take up
with the Holy See the validity of its claims. Of course, the Foreign Office shall first make a
determination of the impact of its espousal on the relations between the Philippine government
and the Holy See (Young, Remedies of Private Claimants Against Foreign States, Selected
Readings on Protection by Law of Private Foreign Investments 905, 919 [1964]). Once the
Philippine government decides to espouse the claim, the latter ceases to be a private cause.
According to the Permanent Court of International Justice, the forerunner of the International
Court of Justice:
By taking up the case of one of its subjects and by reporting to diplomatic action
or international judicial proceedings on his behalf, a State is in reality asserting
its own rights its right to ensure, in the person of its subjects, respect for the
rules of international law (The Mavrommatis Palestine Concessions, 1 Hudson,
World Court Reports 293, 302 [1924]).
WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No.
90-183 against petitioner is DISMISSED.
SO ORDERED.
Narvasa, C.J., Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan
and Mendoza, JJ., concur. Padilla, J., took no part. Feliciano, J., is on leave.
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., Gavino Unchuan, 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
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
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.
Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur. Barredo, J, took no part.
G.R. No. 104269 November 11, 1993

DEPARTMENT OF AGRICULTURE, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.
Roy Lago Salcedo for private respondents.
VITUG, J.:
For consideration are the incidents that flow from the familiar doctrine of non-suability of the
state.
In this petition for certiorari, the Department of Agriculture seeks to nullify the Resolution, 1
dated 27 November 1991, of the National Labor Relations Commission (NLRC), Fifth Division,
Cagayan de Oro City, denying the petition for injunction, prohibition and mandamus that prays
to enjoin permanently the NLRC's Regional Arbitration Branch X and Cagayan de Oro City
Sheriff from enforcing the decision 2 of 31 May 1991 of the Executive Labor Arbiter and from
attaching and executing on petitioner's property.
The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into a
contract 3 on 01 April 1989 for security services to be provided by the latter to the said
governmental entity. Save for the increase in the monthly rate of the guards, the same terms and
conditions were also made to apply to another contract, dated 01 May 1990, between the same
parties. Pursuant to their arrangements, guards were deployed by Sultan Agency in the various
premises of the petitioner.
On 13 September 1990, several guards of the Sultan Security Agency filed a complaint for
underpayment of wages, non-payment of 13th month pay, uniform allowances, night shift
differential pay, holiday pay and overtime pay, as well as for damages, 4 before the Regional
Arbitration Branch X of Cagayan de Oro City, docketed as NLRC Case No. 10-09-00455-90 (or
10-10-00519-90, its original docket number), against the Department of Agriculture and Sultan
Security Agency.
The Executive Labor Arbiter rendered a decision on 31 May finding herein petitioner and jointly
and severally liable with Sultan Security Agency for the payment of money claims, aggregating
P266,483.91, of the complainant security guards. The petitioner and Sultan Security Agency did
not appeal the decision of the Labor Arbiter. Thus, the decision became final and executory.
On 18 July 1991, the Labor Arbiter issued a writ of execution. 5 commanding the City Sheriff to
enforce and execute the judgment against the property of the two respondents. Forthwith, or on
19 July 1991, the City Sheriff levied on execution the motor vehicles of the petitioner, i.e. one
(1) unit Toyota Hi-Ace, one (1) unit Toyota Mini Cruiser, and one (1) unit Toyota Crown. 6
These units were put under the custody of Zacharias Roa, the property custodian of the
petitioner, pending their sale at public auction or the final settlement of the case, whichever
would come first.
A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of
injunction was filed by the petitioner with the National Labor Relations Commission (NLRC),
Cagayan de Oro, alleging, inter alia, that the writ issued was effected without the Labor Arbiter
having duly acquired jurisdiction over the petitioner, and that, therefore, the decision of the
Labor Arbiter was null and void and all actions pursuant thereto should be deemed equally
invalid and of no legal, effect. The petitioner also pointed out that the attachment or seizure of
its property would hamper and jeopardize petitioner's governmental functions to the prejudice of
the public good.
On 27 November 1991, the NLRC promulgated its assailed resolution; viz:
WHEREFORE, premises considered, the following orders are issued:
1. The enforcement and execution of the judgments against petitioner in NLRC
RABX Cases Nos. 10-10-00455-90; 10-10-0481-90 and 10-10-00519-90 are
temporarily suspended for a period of two (2) months, more or less, but not
extending beyond the last quarter of calendar year 1991 to enable petitioner to
source and raise funds to satisfy the judgment awards against it;
2. Meantime, petitioner is ordered and directed to source for funds within the
period above-stated and to deposit the sums of money equivalent to the aggregate
amount. it has been adjudged to pay jointly and severally with respondent Sultan
Security Agency with the Regional Arbitration Branch X, Cagayan de Oro City
within the same period for proper dispositions;
3. In order to ensure compliance with this order, petitioner is likewise directed to
put up and post sufficient surety and supersedeas bond equivalent to at least to
fifty (50%) percent of the total monetary award issued by a reputable bonding
company duly accredited by the Supreme Court or by the Regional Trial Court of
Misamis Oriental to answer for the satisfaction of the money claims in case of
failure or default on the part of petitioner to satisfy the money claims;
4. The City Sheriff is ordered to immediately release the properties of petitioner
levied on execution within ten (10) days from notice of the posting of sufficient
surety or supersedeas bond as specified above. In the meanwhile, petitioner is
assessed to pay the costs and/or expenses incurred by the City Sheriff, if any, in
connection with the execution of the judgments in the above-stated cases upon
presentation of the appropriate claims or vouchers and receipts by the city
Sheriff, subject to the conditions specified in the NLRC Sheriff, subject to the
conditions specified in the NLRC Manual of Instructions for Sheriffs;
5. The right of any of the judgment debtors to claim reimbursement against each
other for any payments made in connection with the satisfaction of the judgments
herein is hereby recognized pursuant to the ruling in the Eagle Security case,
(supra). In case of dispute between the judgment debtors, the Executive Labor
Arbiter of the Branch of origin may upon proper petition by any of the parties
conduct arbitration proceedings for the purpose and thereby render his decision
after due notice and hearings;
7. Finally, the petition for injunction is Dismissed for lack of basis. The writ of
preliminary injunction previously issued is Lifted and Set Aside and in lieu
thereof, a Temporary Stay of Execution is issued for a period of two (2) months
but not extending beyond the last quarter of calendar year 1991, conditioned upon
the posting of a surety or supersedeas bond by petitioner within ten (10) days
from notice pursuant to paragraph 3 of this disposition. The motion to admit the
complaint in intervention is Denied for lack of merit while the motion to dismiss
the petition filed by Duty Sheriff is Noted
SO ORDERED.
In this petition for certiorari, the petitioner charges the NLRC with grave abuse of discretion for
refusing to quash the writ of execution. The petitioner faults the NLRC for assuming jurisdiction
over a money claim against the Department, which, it claims, falls under the exclusive
jurisdiction of the Commission on Audit. More importantly, the petitioner asserts, the NLRC has
disregarded the cardinal rule on the non-suability of the State.
The private respondents, on the other hand, argue that the petitioner has impliedly waived its
immunity from suit by concluding a service contract with Sultan Security Agency.
The basic postulate enshrined in the constitution that "(t)he State may not be sued without its
consent," 7 reflects nothing less than a recognition of the sovereign character of the State and an
express affirmation of the unwritten rule effectively insulating it from the jurisdiction of courts. 8
It is based on the very essence of sovereignty. As has been aptly observed, by Justice Holmes, a
sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on
the logical and practical ground that there can be no legal right as against the authority that
makes the law on which the right depends. 9 True, the doctrine, not too infrequently, is derisively
called "the royal prerogative of dishonesty" because it grants the state the prerogative to defeat
any legitimate claim against it by simply invoking its non-suability. 10 We have had occasion, to
explain in its defense, however, that a continued adherence to the doctrine of non-suability
cannot be deplored, for the loss of governmental efficiency and the obstacle to the performance
of its multifarious functions would be far greater in severity than the inconvenience that may be
caused private parties, if such fundamental principle is to be abandoned and the availability of
judicial remedy is not to be accordingly restricted. 11
The rule, in any case, is not really absolute for it does not say that the state may not be sued
under any circumstances. On the contrary, as correctly phrased, the doctrine only conveys, "the
state may not be sued without its consent;" its clear import then is that the State may at times be
sued. 12 The States' consent may be given expressly or impliedly. Express consent may be made
through a general law 13 or a special law. 14 In this jurisdiction, the general law waiving the
immunity of the state from suit is found in Act No. 3083, where the Philippine government
"consents and submits to be sued upon any money claims involving liability arising from
contract, express or implied, which could serve as a basis of civil action between private
parties." 15 Implied consent, on the other hand, is conceded when the State itself commences
litigation, thus opening itself to a counterclaim 16 or when it enters into a contract. 17 In this
situation, the government is deemed to have descended to the level of the other contracting party
and to have divested itself of its sovereign immunity. This rule, relied upon by the NLRC and
the private respondents, is not, however, without qualification. Not all contracts entered into by
the government operate as a waiver of its non-suability; distinction must still be made between
one which is executed in the exercise of its sovereign function and another which is done in its
proprietary capacity. 18
In the Unites States of America vs. Ruiz, 19 where the questioned transaction dealt with
improvements on the wharves in the naval installation at Subic Bay, we held:
The traditional rule of immunity exempts a State from being sued in the courts of
another State without its consent or waiver. This rule is a necessary consequence
of the principles of independence and equality of States. However, the rules of

International Law are not petrified; they are constantly developing and evolving.
And because the activities of states have multiplied, it has been necessary to
distinguish them between sovereign and governmental acts ( jure imperii) and
private, commercial and proprietary act ( jure gestionisis). The result is that State
immunity now extends only to acts jure imperii. The restrictive application of
State immunity is now the rule in the United States, the United Kingdom and
other states in Western Europe.
xxx xxx xxx
The restrictive application of State immunity is proper only when the proceedings
arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a state may be said to have
descended to the level of an individual and can this be deemed to have actually
given its consent to be sued only when it enters into business contracts. It does
not apply where the contracts relates to the exercise of its sovereign functions. In
this case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of
the government of the highest order; they are not utilized for not dedicated to
commercial or business purposes.
In the instant case, the Department of Agriculture has not pretended to have assumed a capacity
apart from its being a governmental entity when it entered into the questioned contract; nor that
it could have, in fact, performed any act proprietary in character.
But, be that as it may, the claims of private respondents, i.e. for underpayment of wages, holiday
pay, overtime pay and similar other items, arising from the Contract for Service, clearly
constitute money claims. Act No. 3083, aforecited, gives the consent of the State to be "sued
upon any moneyed claim involving liability arising from contract, express or implied, . . .
Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by Presidential Decree
("P.D.") No. 1145, the money claim first be brought to the Commission on Audit. Thus, in
Carabao, Inc., vs. Agricultural Productivity Commission, 20 we ruled:
(C)laimants have to prosecute their money claims against the Government under
Commonwealth Act 327, stating that Act 3083 stands now merely as the general
law waiving the State's immunity from suit, subject to the general limitation
expressed in Section 7 thereof that "no execution shall issue upon any judgment
rendered by any Court against the Government of the (Philippines), and that the
conditions provided in Commonwealth Act 327 for filing money claims against
the Government must be strictly observed."
We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327
and the Labor Code with respect to money claims against the State. The Labor code, in relation
to Act No. 3083, provides the legal basis for the State liability but the prosecution, enforcement
or satisfaction thereof must still be pursued in accordance with the rules and procedures laid
down in C.A. No. 327, as amended by P.D. 1445.
When the state gives its consent to be sued, it does thereby necessarily consent to unrestrained
execution against it. tersely put, when the State waives its immunity, all it does, in effect, is to
give the other party an opportunity to prove, if it can, that the State has a liability. 21 In Republic
vs. Villasor 22 this Court, in nullifying the issuance of an alias writ of execution directed against
the funds of the Armed Forces of the Philippines to satisfy a final and executory judgment, has
explained, thus
The universal rule that where the State gives its consent to be sued by private
parties either by general or special law, it may limit the claimant's action "only up
to the completion of proceedings anterior to the stage of execution" and that the
power of the Courts ends when the judgment is rendered, since government funds
and properties may not be seized under writs or execution or garnishment to
satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the correspondent
appropriation as required by law. The functions and public services rendered by
the State cannot be allowed to be paralyzed or disrupted by the diversion of
public funds from their legitimate and specific objects, as appropriated by law. 23
WHEREFORE, the petition is GRANTED. The resolution, dated 27 November 1991, is hereby
REVERSED and SET ASIDE. The writ of execution directed against the property of the
Department of Agriculture is nullified, and the public respondents are hereby enjoined
permanently from doing, issuing and implementing any and all writs of execution issued
pursuant to the decision rendered by the Labor Arbiter against said petitioner.
SO ORDERED.
Feliciano, Bidin, Romero and Melo, JJ., concur.
G.R. No. L-33112 June 15, 1978

PHILIPPINE NATIONAL BANK, petitioner,
vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of First Instance, Branch III, La
Union, AGOO TOBACCO PLANTERS ASSOCIATION, INC., PHILIPPINE VIRGINIA
TOBACCO ADMINISTRATION, and PANFILO P. JIMENEZ, Deputy Sheriff, La Union,
respondents.
Conrado E. Medina, Edgardo M. Magtalas & Walfrido Climaco for petitioner.
Felimon A. Aspirin fit respondent Agoo 'Tobacco Planters Association, Inc.
Virgilio C. Abejo for respondent Phil. Virginia Tobacco Administration.
FERNANDO, Acting C.J.:

The reliance of petitioner Philippine National Bank in this certiorari and prohibition proceeding
against respondent Judge Javier Pabalan who issued a writ of execution, 1 followed thereafter by
a notice of garnishment of the funds of respondent Philippine Virginia Tobacco Administration, 2
deposited with it, is on the fundamental constitutional law doctrine of non-suability of a state, it
being alleged that such funds are public in character. This is not the first time petitioner raised
that issue. It did so before in Philippine National Bank v. Court of industrial Relations, 3 decided
only last January. It did not meet with success, this Court ruling in accordance with the two
previous cases of National Shipyard and Steel Corporation 4 and Manila Hotel Employees
Association v. Manila Hotel Company, 5 that funds of public corporations which can sue and be
sued were not exempt from garnishment. As respondent Philippine Virginia Tobacco
Administration is likewise a public corporation possessed of the same attributes, 6 a similar
outcome is indicated. This petition must be dismissed.
It is undisputed that the judgment against respondent Philippine Virginia Tobacco
Administration had reached the stage of finality. A writ of execution was, therefore, in order. It
was accordingly issued on December 17, 1970. 7 There was a notice of garnishment for the full
amount mentioned in such writ of execution in the sum of P12,724,66. 8 In view of the
objection, however, by petitioner Philippine National Bank on the above ground, coupled with
an inquiry as to whether or not respondent Philippine Virginia Tobacco Administration had funds
deposited with petitioner's La Union branch, it was not until January 25, 1971 that the order
sought to be set aside in this certiorari proceeding was issued by respondent Judge. 9 Its
dispositive portion reads as follows: Conformably with the foregoing, it is now ordered, in
accordance with law, that sufficient funds of the Philippine Virginia Tobacco Administration
now deposited with the Philippine National Bank, La Union Branch, shall be garnished and
delivered to the plaintiff immediately to satisfy the Writ of Execution for one-half of the amount
awarded in the decision of November 16, 1970." 10 Hence this certiorari and prohibition
proceeding.
As noted at the outset, petitioner Philippine National Bank would invoke the doctrine of nonsuability. It is to be admitted that under the present Constitution, what was formerly implicit as a
fundamental doctrine in constitutional law has been set forth in express terms: "The State may
not be sued without its consent." 11 If the funds appertained to one of the regular departments or
offices in the government, then, certainly, such a provision would be a bar to garnishment. Such
is not the case here. Garnishment would lie. Only last January, as noted in the opening paragraph
of this decision, this Court, in a case brought by the same petitioner precisely invoking such a
doctrine, left no doubt that the funds of public corporations could properly be made the object of
a notice of garnishment. Accordingly, this petition must fail.
1. The alleged grave abuse of discretion, the basis of this certiorari proceeding, was sought to be
justified on the failure of respondent Judge to set aside the notice of garnishment of funds
belonging to respondent Philippine Virginia Tobacco Administration. This excerpt from the
aforecited decision of Philippine National Bank v. Court of Industrial Relations makes manifest
why such an argument is far from persuasive. "The premise that the funds could be spoken as
public character may be accepted in the sense that the People Homesite and Housing
Corporation was a government-owned entity. It does not follow though that they were exempt.
from garnishment. National Shipyard and Steel Corporation v. Court of Industrial Relations is
squarely in point. As was explicitly stated in the opinion of the then Justice, later Chief Justice,
Concepcion: "The allegation to the effect that the funds of the NASSCO are public funds of the
government, and that, as such, the same may not be garnished, attached or levied upon, is
untenable for, as a government owned and controlled corporation, the NASSCO has a
personality of its own. distinct and separate from that of the Government. It has pursuant to
Section 2 of Executive Order No. 356, dated October 23, 1950 ... , pursuant to which The
NASSCO has been established all the powers of a corporation under the Corporation
Law ... ." Accordingly, it may be sue and be sued and may be subjected to court processes just
like any other corporation (Section 13, Act No. 1459, as amended.)" ... To repeat, the ruling was
the appropriate remedy for the prevailing party which could proceed against the funds of a
corporate entity even if owned or controlled by the government." 12
2. The National Shipyard and Steel Corporation decision was not the first of its kind. The ruling
therein could be inferred from the judgment announced in Manila Hotel Employees Association
v. Manila Hotel Company, decided as far back as 1941. 13 In the language of its ponente Justice
Ozaeta "On the other hand, it is well-settled that when the government enters into commercial
business, it abandons its sovereign capacity and is to be treated like any other corporation. (Bank
of the United States v. Planters' Bank, 9 Wheat. 904, 6 L.ed. 244). By engaging in a particular
business thru the instrumentality of a corporation, the government divests itself pro hac vice of
its sovereign character, so as to render the corporation subject to the rules of law governing
private corporations." 14 It is worth mentioning that Justice Ozaeta could find support for such a
pronouncement from the leading American Supreme Court case of united States v. Planters'
Bank, 15 with the opinion coming from the illustrious Chief Justice Marshall. It was handed
down more than one hundred fifty years ago, 1824 to be exact. It is apparent, therefore, that
petitioner Bank could it legally set forth as a bar or impediment to a notice of garnishment the
doctrine of non-suability.
WHEREFORE, this petition for certiorari and prohibition is dismissed. No costs.
Barredo, Antonio, Aquino, and Santos, JJ., concur.
Concepcion, Jr., J., is on leave.
G.R. No. L-55273-83 December 19, 1981

GAUDENCIO RAYO, BIENVINIDO PASCUAL, TOMAS MANUEL, MARIANO CRUZ,
PEDRO BARTOLOME, BERNARDINO CRUZ JOSE PALAD , LUCIO FAJARDO,
FRANCISCO RAYOS, ANGEL TORRES, NORBERTO TORRES, RODELIO JOAQUIN,
PEDRO AQUINO, APOLINARIO BARTOLOME, MAMERTO BERNARDO, CIRIACO
CASTILLO, GREGORIO CRUZ, SIMEON ESTRELLA, EPIFANIO MARCELO,
HERMOGENES SAN PEDRO, JUAN SANTOS, ELIZABETH ABAN, MARCELINA
BERNABE, BUENAVENTURA CRUZ, ANTONIO MENESES, ROMAN SAN PEDRO,
LOPEZ ESPINOSA, GODOFREDO PUNZAL, JULIANA GARCIA, LEBERATO
SARMIENTO, INOCENCIO DE LEON, CARLOS CORREA, REYNALDO CASIMIRO,
ANTONIO GENER, GAUDENCIO CASTILLO, MATIAS PEREZ, CRISPINIANO
TORRES, CRESENCIO CRUZ, PROTACIO BERNABE, MARIANO ANDRES,
CRISOSTOMO CRUZ, MARCOS EUSTAQUIO, PABLO LEGASPI, VICENTE
PASCUAL, ALEJANDRA SISON, EUFRACIO TORRES, ROGELIO BARTOLOME,
RODOLFO BERNARDO, APOLONIO CASTILLO, MARCELINO DALMACIO,
EUTIQUIO LEGASPI, LORENZO LUCIANO and GREGORIO PALAD, petitioners,
vs.
COURT OF FIRST INSTANCE OF BULACAN, BRANCH V, STA. MARIA, and
NATIONAL POWER CORPORATION, respondents.
ABAD SANTOS, J.:

The relevant antecedents of this case are narrated in the petition and have not been controverted,
namely:
3. At about midnight on October 26, 1978, during the height of that infamous
typhoon "KADING" the respondent corporation, acting through its plant
superintendent, Benjamin Chavez, opened or caused to be opened simultaneously
all the three floodgates of the Angat Dam. And as a direct and immediate result of
the sudden, precipitate and simultaneous opening of said floodgates several towns
in Bulacan were inundated. Hardest-hit was Norzagaray. About a hundred of its
residents died or were reported to have died and properties worth million of pesos
destroyed or washed away. This flood was unprecedented in Norzagaray.
4. Petitioners, who were among the many unfortunate victims of that man-caused
flood, filed with the respondent Court eleven complaints for damages against the
respondent corporation and the plant superintendent of Angat Dam, Benjamin
Chavez, docketed as Civil Cases Nos. SM-950 951, 953, 958, 959, 964, 965, 966,
981, 982 and 983. These complaints though separately filed have a
common/similar cause of action. ...
5. Respondent corporation filed separate answers to each of these eleven
complaints. Apart from traversing the material averments in the complaints and
setting forth counterclaims for damages respondent corporation invoked in each
answer a special and affirmative defense that "in the operation of the Angat
Dam," it is "performing a purely governmental function", hence it "can not be
sued without the express consent of the State." ...
6. On motion of the respondent corporation a preliminary hearing was held on its

affirmative defense as though a motion to dismiss were filed. Petitioners opposed
the prayer for dismissal and contended that respondent corporation is performing
not governmental but merely proprietary functions and that under its own organic
act, Section 3 (d) of Republic Act No. 6395, it can sue and be sued in any
court. ...
7. On July 29, 1980 petitioners received a copy of the questioned order of the
respondent Court dated December 21, 1979 dismissing all their complaints as
against the respondent corporation thereby leaving the superintendent of the
Angat Dam, Benjamin Chavez, as the sole party-defendant. ...
8. On August 7, 1980 petitioners filed with the respondent Court a motion for
reconsideration of the questioned order of dismissal. ...
9. The respondent Court denied petitioners' motion for reconsideration in its order
dated October 3, 1980. ... Hence, the present petition for review on certiorari
under Republic Act No. 5440. (Rollo, pp. 3-6.)
The Order of dismissal dated December 12, 1979, reads as follows:
Under consideration is a motion to dismiss embodied as a special affirmative
defense in the answer filed by defendant NPC on the grounds that said defendant
performs a purely governmental function in the operation of the Angat Dam and
cannot therefore be sued for damages in the instant cases in connection therewith.
Plaintiffs' opposition to said motion to discuss, relying on Sec. 3 (d) of Republic
Act 6396 which imposes on the NPC the power and liability to sue and be sued in
any court, is not tenable since the same refer to such matters only as are within
the scope of the other corporate powers of said defendant and not matters of tort
as in the instant cases. It being an agency performing a purely governmental
function in the operation of the Angat Dam, said defendant was not given any
right to commit wrongs upon individuals. To sue said defendant for tort may
require the express consent of the State.
WHEREFORE, the cases against defendant NPC are hereby dismissed. (Rollo, p.
60.)
The Order dated October 3, 1980, denying the motion for reconsideration filed by the plaintiffs
is pro forma; the motion was simply denied for lack of merit. (Rollo, p. 74.)
The petition to review the two orders of the public respondent was filed on October 16, 1980,
and on October 27, 1980, We required the respondents to comment. It was only on April 13,
1981, after a number of extensions, that the Solicitor General filed the required comment.
(Rollo, pp. 107-114.)
On May 27, 1980, We required the parties to file simultaneous memoranda within twenty (20)
days from notice. (Rollo, p. 115.) Petitioners filed their memorandum on July 22, 1981. (Rollo,
pp. 118-125.) The Solicitor General filed a number of motions for extension of time to file his
memorandum. We granted the seventh extension with a warning that there would be no further
extension. Despite the warning the Solicitor General moved for an eighth extension which We
denied on November 9, 1981. A motion for a ninth extension was similarly denied on November
18, 1981. The decision in this case is therefore, without the memorandum of the Solicitor
General.
The parties are agreed that the Order dated December 21, 1979, raises the following issues:
1. Whether respondent National Power Corporation performs a governmental function with
respect to the management and operation of the Angat Dam; and
2. Whether the power of respondent National Power Corporation to sue and be sued under its
organic charter includes the power to be sued for tort.
The petition is highly impressed with merit.
It is not necessary to write an extended dissertation on whether or not the NPC performs a
governmental function with respect to the management and operation of the Angat Dam. It is
sufficient to say that the government has organized a private corporation, put money in it and
has allowed it to sue and be sued in any court under its charter. (R.A. No. 6395, Sec. 3 (d).) As a
government owned and controlled corporation, it has a personality of its own, distinct and
separate from that of the Government. (See National Shipyards and Steel Corp. vs. CIR, et al.,
L-17874, August 31, 1963, 8 SCRA 781.) Moreover, the charter provision that the NPC can "sue
and be sued in any court" is without qualification on the cause of action and accordingly it can
include a tort claim such as the one instituted by the petitioners.
WHEREFORE, the petition is hereby granted; the Orders of the respondent court dated
December 12, 1979 and October 3, 1980, are set aside; and said court is ordered to reinstate the
complaints of the petitioners. Costs against the NPC.
SO ORDERED.
Barredo (Chairman), Aquino, De Castro, Ericta and Escolin JJ., concur. Concepcion Jr., J., is
on leave.
G.R. No. L-15751
January 28, 1961
BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO LEDESMA,

petitioners,
vs.
THE BUREAU OF PRINTING EMPLOYEES ASSOCIATION (NLU), PACIFICO
ADVINCULA, ROBERTO MENDOZA, PONCIANO ARGANDA and TEODULO
TOLERAN, respondents.
Office of the Solicitor General for petitioners.
Eulogio R. Lerum for respondents.
GUTIERREZ DAVID, J.:
This is a petition for certiorari and prohibition with preliminary injunction to annul Certain
orders of the respondent Court of Industrial Relations and to restrain it from further proceeding
in the action for unfair labor practice pending before it on the ground of lack of jurisdiction.
Giving due course to the petition, this Court ordered the issuance of the writ of preliminary
injunction prayed for without bond.
The action in question was upon complaint of the respondents Bureau of Printing Employees
Association (NLU) Pacifico Advincula, Roberto Mendoza, Ponciano Arganda and Teodulo
Toleran filed by an acting prosecutor of the Industrial Court against herein petitioner Bureau
of Printing, Serafin Salvador, the Acting Secretary of the Department of General Services, and
Mariano Ledesma the Director of the Bureau of Printing. The complaint alleged that Serafin
Salvador and Mariano Ledesma have been engaging in unfair labor practices by interfering with,
or coercing the employees of the Bureau of Printing particularly the members of the
complaining association petition, in the exercise of their right to self-organization an
discriminating in regard to hire and tenure of their employment in order to discourage them from
pursuing the union activities.
Answering the complaint, the petitioners Bureau of Printing, Serafin Salvador and Mariano
Ledesma denied the charges of unfair labor practices attributed to the and, by way of affirmative
defenses, alleged, among other things, that respondents Pacifico Advincula, Roberto Mendoza
Ponciano Arganda and Teodulo Toleran were suspended pending result of an administrative
investigation against them for breach of Civil Service rules and regulations petitions; that the
Bureau of Printing has no juridical personality to sue and be sued; that said Bureau of Printing is
not an industrial concern engaged for the purpose of gain but is an agency of the Republic
performing government functions. For relief, they prayed that the case be dismissed for lack of
jurisdiction. Thereafter, before the case could be heard, petitioners filed an "Omnibus Motion"
asking for a preliminary hearing on the question of jurisdiction raised by them in their answer
and for suspension of the trial of the case on the merits pending the determination of such
jurisdictional question. The motion was granted, but after hearing, the trial judge of the
Industrial Court in an order dated January 27, 1959 sustained the jurisdiction of the court on the
theory that the functions of the Bureau of Printing are "exclusively proprietary in nature," and,
consequently, denied the prayer for dismissal. Reconsideration of this order having been also
denied by the court in banc, the petitioners brought the case to this Court through the present
petition for certiorari and prohibition.
We find the petition to be meritorious.
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 . . .."
(See. 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.
It is true, as stated in the order complained of, that the Bureau of Printing receives outside jobs
and that many of its employees are paid for overtime work on regular working days and on
holidays, but these facts do not justify the conclusion that its functions are "exclusively
proprietary in nature." Overtime work in the Bureau of Printing is done only when the interest of
the service so requires (sec. 566, Rev. Adm. Code). As a matter of administrative policy, the
overtime compensation may be paid, but such payment is discretionary with the head of the
Bureau depending upon its current appropriations, so that it cannot be the basis for holding that
the functions of said Bureau are wholly proprietary in character. Anent the additional work it
executes for private persons, we find that such work is done upon request, as distinguished from
those solicited, and only "as the requirements of Government work will permit" (sec. 1654, Rev.
Adm. Code), and "upon terms fixed by the Director of Printing, with the approval of the
Department Head" (sec. 1655, id.). As shown by the uncontradicted evidence of the petitioners,
most of these works consist of orders for greeting cards during Christmas from government
officials, and for printing of checks of private banking institutions. On those greeting cards, the
Government seal, of which only the Bureau of Printing is authorized to use, is embossed, and on
the bank cheeks, only the Bureau of Printing can print the reproduction of the official
documentary stamps appearing thereon. The volume of private jobs done, in comparison with
government jobs, is only one-half of 1 per cent, and in computing the costs for work done for
private parties, the Bureau does not include profit because it is not allowed to make any. Clearly,
while the Bureau of Printing is allowed to undertake private printing jobs, it cannot be pretended
that it is thereby an industrial or business concern. The additional work it executes for private
parties is merely incidental to its function, and although such work may be deemed proprietary
in character, there is no showing that the employees performing said proprietary function are
separate and distinct from those employed in its general governmental functions.
From what has been stated, it is obvious that the Court of Industrial Relations did not acquire
jurisdiction over the respondent Bureau of Printing, and is thus devoid of any authority to take
cognizance of the case. This Court has already held in a long line of decisions that the Industrial
Court has no jurisdiction to hear and determine the complaint for unfair labor practice filed
against institutions or corporations not organized for profit and, consequently, not an industrial
or business organization. This is so because the Industrial Peace Act was intended to apply only
to industrial employment, and to govern the relations between employers engaged in industry
and occupations for purposes of gain, and their industrial employees. (University of the
Philippines, et al. vs. CIR, et al., G.R. No. L-15416, April 28, 1960; University of Sto. Tomas vs.
Villanueva, et al., G.R. No. L-13748, October 30, 1959; La Consolacion College vs. CIR, G.R.
No. L-13282, April 22, 1960; See also the cases cited therein.) .
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. L10943-44, December 28, 1957).
The record also discloses that the instant case arose from the filing of administrative charges
against some officers of the respondent Bureau of Printing Employees' Association by the Acting
Secretary of General Services. Said administrative charges are for insubordination, grave
misconduct and acts prejudicial to public service committed by inciting the employees, of the
Bureau of Printing to walk out of their jobs against the order of the duly constituted officials.
Under the law, the Heads of Departments and Bureaus are authorized to institute and investigate
administrative charges against erring subordinates. For the Industrial Court now to take
cognizance of the case filed before it, which is in effect a review of the acts of executive officials
having to do with the discipline of government employees under them, would be to interfere
with the discharge of such functions by said officials. WHEREFORE, the petition for a writ of
prohibition is granted. The orders complained of are set aside and the complaint for unfair labor
practice against the petitioners is dismissed, with costs against respondents other than the
respondent court.
Bengzon, Bautista Angelo, Labrador, Paredes and Dizon, JJ., concur.
Reyes, J.B.L., J., concurs in the result.
[G.R. No. 103052. May 23, 1997]

MOBIL OIL PHILIPPINES, INC., and CALTEX (PHILS.), INC., petitioners, vs. HON.
COURT OF APPEALS and CONTINENTAL CEMENT CORPORATION, respondents.
DECISION
VITUG, J.:
The petition for review on certiorari in the case at bar seeks the reversal of the decision of the
Court of Appeals,i[1] affirming thatii[2] of the Regional Trial Court ("RTC"), Branch 101, of
Quezon City, which found herein petitioners Mobil Oil Philippines, Inc., and Caltex Philippines,
Inc., jointly and severally liable to private respondent Continental Cement Corporation in the
amount of eight million pesos (P8,000,000.00) for actual damages, plus ten per cent (10%)
thereof by way of attorney's fees, for having delivered water-contaminated bunker fuel oil to the
serious prejudice and damage of the cement firm.
Sometime in May 1982, petitioner Mobil Oil Philippines, Inc. ("MOPI"), a firm engaged in the
marketing of petroleum products to industrial users, entered into a supply agreement with
private respondent Continental Cement Corporation ("CCC"), a cement producer, under which
the former would supply the latter's industrial fuel oil ("IFO") or bunker fuel oil ("BFO")
requirements. MOPI extended to CCC an unsecured credit line of P2,000,000.00 against which
CCC's purchases of oil could initially be charged.
MOPI had a "hauling contract" with Century Freight Services ("CFS") whereby CFS undertook
the delivery of Mobil products to designated consignees of MOPI.
During the period starting from 12 July to 07 October 1982, MOPI made a total of sixty-seven
deliveries of BFO, each delivery consisting of 20,000 liters, to CCC's cement factory in
Norzagaray, Bulacan. On 08 October 1982, CCC discovered that what should have been MOPI's
20,000 BFO delivery to CCC's Norzagaray plant, through CFS's lorry truck, was, in fact, pure
water. CCC at once informed MOPI of this anomaly and of its intention to meanwhile hold in
abeyance all payments due to MOPI on its previous deliveries until such time as the parties
would have ascertained that those deliveries were not themselves adulterated. CCC suggested
that MOPI's storage tank in the Norzagaray plant be likewise investigated for possible
contamination.
MOPI and CCC agreed to conduct an actual water content test. The water draining activity
conducted on 22 October 1982 in the presence of representatives of both MOPI and CCC
yielded the following findings:
"JOINT UNDERTAKING
"WE, MOBIL OIL PHILS., INC. and CONTINENTAL CEMENT CORPORATION, on this
22nd day of October, 1982 at CCC Plantsite, Norzagaray, Bulacan, represented in this act by
MESSRS. R. d. J. AGUIRRE, E.R. PAMARAN, U.A. TESORO and RICARDO S. DE SILVA,
EDITH M. YAO, CORNELIO A. PAZ, III respectively, hereby undertake detailed verification of
water contained on all BFO delivered by MOBIL OIL PHILS., INC., except those that have
been already used in cement operation by CCC; as a consequence of the water anomaly (sic)
delivered by MOBIL instead of BFO dated October 8, 1982 of Mobil lorry (Truck Plate No.
794) as follows:
"WATER CONTENT STORAGE TANK MARKED MOBIL DELIVERIES

NO. OF DRUMS
LTS/DRUM
TOTAL QUANTITY IN
LITERS
39
210
8,190
"NOTE: Drums No. 1 to 35 - pure water while Drums No. 36-39 - a mixture of BFO and
water, with corresponding sample taken.
"WE, MOBIL PHILS., INC. and CONTINENTAL CEMENT CORPORATION duly
represented by the above-mentioned authorized representative jointly subscribed and
manifested to the accuracy and correctness of the counting in terms of liters water content
of all BFO delivered by MOBIL OIL PHILS., INC. to CCC, except those that have been
already used in cement operation by CCC. Further, we agreed that the drum/s used in
counting the water content has the net capacity of 210 liters.
"MOBIL OIL PHILS, INC.
CORPORATION
CONTINENTAL CEMENT
By:
By:
"x x x x x x
x x x."iii[3]
This "joint undertaking" was signed by representatives of MOPI and CCC in the presence of
P/Cpl. Jose S. Sison of the Norzagaray police and Alfonso D. Chua, AVP of CCC, and duly
notarized.iv[4]
Another testing of the BFO delivered by MOPI was undertaken by CCC. MOPI, this time, did
not send any representative in the draining activity, conducted on 19 November 1982, but in
attendance were a representative from the Criminal Investigation Service (CIS) of Camp Olivas,
Pampanga, and the local barangay captain. The draining activity came out with the following
results; viz:
"JOINT UNDERTAKING
"Continuation and Final Counting of Water
Content delivered by Mobil Oil Phils. Inc.
Instead of Bunker Fuel Oil
-------------------------------------------------"WE, CONTINENTAL CEMENT CORPORATION, on this 19th day of November 1982,
represented in this act by MESSRS. FEDERICO D. MEMBREBE, CORNELIO A. PAZ III,
EDITH M. YAO in the presence of CIS TEODORO CARREON of Camp Olivas, San Fernando,
Pampanga and Brgy. Captain DALMACIO LAPIG of Brgy. Bigte, Norzagaray, Bulacan, hereby
undertake the continuation and final counting of water content on all bunker fuel oil delivered by
Mobil Oil Phils., Inc. except those that have been already used in cement operation by
Continental Cement Corporation; as a consequence of the water delivered by Mobil Oil Phils.,
Inc. lorry (Truck Plate No. 794) instead of bunker fuel oil dated October 8, 1982.
"That this continuation and final counting was made in the presence of the aforecited national
and local authority in the absence of Mobil Oil Phils., Inc. representative who continuously and
wantonly refused to continue on witnessing and attesting to their water deliveries instead of
bunker fuel oil inspite of the three (3) letters advising them of the counting dated October 26,
1982 duly receipted by Mobil Oil Phils., Inc. on October 27, 1982; October 30, 1982 duly
receipted November 2, 1982 and November 11, 1982 duly receipted November 12, 1982 with
the following results as follows:
"A. STORAGE TANK ASSIGNED TO MOBIL
NO. OF DRUMS
LTS/DRUM
TOTAL QUANTITY IN
LITERS
210
210 a mixture of 30%

Bunker Oil and 70%
Water
"B. MOBIL LORRY (TRUCK PLATE NO. 794)

NO. OF DRUMS
LTS/DRUM
TOTAL QUANTITY IN
LITERS
210
9,450
210
8,400
Back Compartment
45
Front Compartment
40
Total 85
17,850
"WE, FEDERICO D. MEMBREBE, Head, Quality Control; CORNELIO A. PAZ, III Plant
Accountant; MRS. EDITH YAO, Warehouse Supervisor, representing CONTINENTAL
CEMENT CORPORATION in this act, and CIS TEODORO CARREON, Camp Olivas, San
Fernando, Pampanga and DALMACIO LAPIG, Brgy. Captain of Brgy. Bigte, Norzagaray,
Bulacan, jointly subscribed and attested to the accuracy and correctness of the second and final
counting in terms of liters water content of all bunker oil delivered by Mobil Oil Phils., Inc. to
CONTINENTAL CEMENT CORPORATION, except those that have been already used in the
cement operation by said Continental Cement Corporation.
"FURTHER, we certify that the drums used in counting the water content has a net capacity of
210 liters. This joint undertaking has been executed for all legal purposes it will be used."v[5]
Like the first "joint undertaking," this document was notarized.
Alleging in the complaint it ultimately filed with the RTC that its factory equipment broke down
from 19 to 22 September 1982 due to the utilization of the water-contaminated BFO supplied by
MOPI; that on 23 September 1982, its plant operations had to be stopped completely; and that it
was able to resume operations only after essential repairs had been undertaken on 02 October
1982; CCC sought to recover consequential damages from MOPI. In answer, MOPI averred that
CCC had accepted each delivery of BFO in accordance with the procedure for testing and
acceptance of BFO deliveries; that it was only on 08 October 1982 that CCC brought to its
attention the alleged anomalous delivery of 20,000 liters of BFO under invoice No. 47587
through Mariano Rivera's lorry truck; that when the delivery was being inspected by CCC's
representatives, the truck driver and helper fled; that Rivera acknowledged full liability for such
delivery; that Rivera promised to pay the amount of P42,730.00 for the 20,000 liters of BFO
delivered; and that MOPI agreed to the water draining activity solely for the purpose of
maintaining good business relations with CCC but not to admit any liability therefor.vi[6] In its
compulsory counterclaim, MOPI claimed that CCC had an outstanding obligation to it, as of 30
November 1982, in the amount of P1,096,238.51, and that as a consequence of the "frivolous
and malicious suit" which besmirched MOPI's reputation, it suffered moral damages of not less
than P10,000,000.00, exemplary damages of the same amount, and the incurrence of attorney's
fees.
On 23 August 1983, Caltex (Philippines) Inc., through its president, Amaury R. Gutierrez,
informed CCC that it would be the new owner of MOPI, effective 01 September 1983, and that
Caltex would "assume all the rights and obligations of MOPI under all its existing contracts with
its consumers and dealers."vii[7] Disturbed somehow by the news, CCC filed an ex-parte urgent
motion for the issuance of a writ of attachment.viii[8] The RTC issued the writ on 13 September
1983 conditioned on the filing by CCC of a bond in the amount of P5,000,000.00.ix[9]
Considering that, prior to the transfer of MOPI's controlling interest to Caltex, a subsidiary of
MOPI, named International Filters Corporation, was renamed Mobil Philippines, Inc. ("MPI"),
with MOPI's officers as incorporators, CCC filed a motion to amend the complaint as to so
implead both Caltex and MPI party-defendants.x[10] The amended complaint was filed with the
motion.xi[11] MOPI, MPI and Caltex thereupon filed an amended answer.xii[12]
On 28 November 1984, upon motion of defendants, the RTC lifted the writ of attachment it had
issued on condition that MPI would keep and maintain on deposit with the Security Bank and
Trust Company, an amount of P10,000,000.00.xiii[13] The depository bank was later changed to
Citibank NT & SA.xiv[14]
In due course, the RTC rendered a decision resolving the following issues agreed upon by the
parties at the pre-trial conference; to wit:
1. Whether or not there were deliveries of BFO (or IFO) mixed with water before October 8,
1982;
2. Whether or not the defendants were liable for the contamination of the IFO notwithstanding
that, although defendant MOPI contracted the carrier of the IFO, both MOPI and CCC had
agreed upon the personnel of the carrier; and
3. Whether or not the BFO mixed with water resulted in damage to CCC's machinery and loss of
production/income.
The RTC found that there were deliveries of adulterated IFO even prior to 08 October 1982
based on the results of the draining activity conducted on 22 October 1982 and on 19 November
1982.xv[15] The findings showed that the adulteration of the IFO was "well over the tolerable
water contents as stated in the Petron Basic Line (Exhibit `V') which should only be 0.1%
(Exhibit `V-3-a')."xvi[16] Although the tests did not include deliveries before October 1982, it was
safe to say, the court observed, that the residue in the storage tank would be "plain water which
would be in big volume" considering that the draining pipe in CCC's storage tank for MOPI's
IFO was eight (8) inches above the bottom of the huge storage tank.xvii[17]
Relative to the second issue, the RTC held that the allegation of the defendants that the carrier
was chosen by CCC was a lame excuse. It noted that it was MOPI itself which entered into the
hauling contract with CFS, and that there was, in fact, a "tacit admission" of liability on the part
of the oil companies when they replaced the 20,000 liters of "mostly water" delivered on 08
October 1982 by an "agent or surrogate" of defendants. No fraud on the part of defendants,
nevertheless, was seen to have attended the deliveries of contaminated oil which could warrant
an award of damages outside of actual damages.
On the third issue, the lower court, noting the testimonies of the plant manager, Ricardo de
Silva, and of Engineer Filomeno L. Villaluz, concluded that the lowered temperature resulting
from the water-contaminated BFO caused the loosening of the magneton bricks lining the rotary
kiln used in the clinkering process in cement production. The actual damage caused amounted,
as prayed for and as testified to by CCC's vice-resident Urbano Cruz, to P8,000,000.00.
The defendants appealed to the Court of Appeals. On 19 September 1991, the appellate court
rendered judgment affirming the decision of the RTC.
On the contention that the RTC erred in finding that BFO deliveries prior to 08 October 1982
were contaminated with water and that no Mobil BFO deliveries remained unused as of 22
October 1982 when the first water-draining was conducted, the Court of Appeals held that
appellants hardly could espouse this view considering that MOPI had participated in the waterdraining activity on 22 October 1982 and that the "joint undertaking" of even date attested to the
presence of a substantial amount of unused BFO.
The appellate court agreed with the RTC that appellants aptly should be accountable for the
water-contaminated deliveries. As the seller, MOPI so warranted that the BFO it had sold was
adulteration-free IFO. The appellants, held the appellate court, were in no position to evade
liability by instead pointing to the carrier since it was Mobil which contracted for the hauler's
services and there was no evidence that CCC had any direct involvement in the hauling
agreement.
The Court of Appeals upheld the findings of the trial court that the water-contaminated BFO
delivered by MOPI indeed caused damage to CCC's rotary kiln. It said:
"The fact remains that 7,350 liters of pure water and 1,050 liters of adulterated BFO were found
inside Mobil's storage tank, not including that which have already been used in plaintiffappellee's operations. This also does not include that amount of water which was not drained out
of the same storage tank, considering the trial court's observation during its ocular inspection,
that the pipe used in draining out the water content of said tank is located about 8 inches from
the bottom of the tank. It can therefore be logically concluded that such substantial amount of
adulterated BFO did in fact generate less heat and thereby caused the unstable temperature of
plaintiff-appellee's rotary kiln.
"Neither can we give credence to the testimonies of defendants-appellants' expert witnesses,
citing several factors which may have caused the unstable temperature inside the rotary kiln.
This is in the light of the fact that no evidence was presented showing the presence of any of
these factors in the instant case. These witnesses even admitted that they never had any occasion
to conduct an investigation of the subject machinery. `Expert opinions are not ordinarily
conclusive in the sense that they must be accepted as true on the subject of their testimony, but
are generally regarded as purely advisory in character; the courts may place whatever weight
they choose upon such testimony and may accept it, if they find that it is consistent with the
facts of the case or otherwise reasonable. (Francisco, Revised Rules of Court in the Philippines.
Volume VII, Part I, pp. 596-597)"xviii[18]
The appellate court gave little value to the claim that CCC's financial difficulties motivated the
latter to file the case. It upheld the award of attorney's fees, the same having been so stipulated
not only in the credit agreement between the parties but also in the invoices issued by MOPI.
Petitioners, in the instant petition for review on certiorari, so craft the issues as to lend credence
to their thesis that the appeal involves questions of law rather than of fact, thus:
"1. Whether or not Petitioner Mobil is estopped from claiming that no Mobil BFO remained
unused by Continental on 22 October 1982; and that the deliveries of BFO made by Mobil to
Continental before 8 October 1982 were not contaminated with water?
"2. Whether or not Petitioners can be held liable for the contaminated BFO delivered on 8
October 1982 on the ground that Country Freight Service, as carrier-hauler, was an agent of
Mobil?"xix[19]
While petitioners do not dispute that the 07th October 1982 delivery of IFO has been found on
08 October 1982 to be adulterated or contaminated, they, however, insist that the shipments
prior to that delivery date has been "used up and/or not contaminated with water."xx[20] This
matter is clearly a question of fact that may not be freely taken up anew by this Court.xxi[21]
The claim that the Court of Appeals "conveniently made an inference that the subject
Continental storage tank contained Mobil BFO deliveries only because Mobil and Continental
agreed to jointly examine the same,"xxii[22] and that the appellate court had so misapprehended
the facts, is unacceptable. The factual finding that deliveries previous to 08 October 1982 were
adulterated BFO was supported by the 22 October 1982 "joint undertaking." This document,
witnessed and signed by representatives of both MOPI and CCC, clearly showed that a "detailed
verification of water contained on all BFO delivered by MOBIL OIL PHILS., INC., except those
that have already been used in cement operation by CCC," was undertaken. Implicit from this
statement was that there still was at the time an availability of BFO in the storage tank
designated by CCC for past Mobil deliveries. The same could be said of the second water
draining process, evidenced by the second "joint undertaking." Although done without the
participation of MOPI, the latter, nonetheless, was notified of the "counting" thrice, the last of
which had indicated that failure on MOPI's part to send a representative would be tantamount to
a waiver of its right to participate therein.xxiii[23]
The appellate court may not thus be faulted for holding that petitioners are barred from
questioning the results of water draining processes conducted on the MOPI tank in the CCC
plantsite, in the same manner that MOPI may not belatedly question the testing procedure
theretofore adopted. MOPI cannot be allowed to turn its back to its own acts (or inactions) to the
prejudice of CCC, which, in good faith, relied upon MOPI's conduct.
The unrebutted testimony of CCC's plant manager, Engineer De Silva, has clearly established
that BFO from MOPI was used from 19 to 21 September 1982, and that such use directly caused
damage to CCC's rotary kiln; thus:
"Q: You mentioned that under the bunker fuel oil supply agreement between the Mobil Oil
Philippines and Continental Cement Corporation, Mobil Oil delivered bunker fuel oil to the
premises of Continental Cement and that this bunker fuel oil is stored in one of the tank(s)
within the premises of Continental Cement to which you previously identified in Exhibit `DD'.
Now when did the Continental Cement first use the bunker fuel oil supplied by Mobil Oil under
the same bunker fuel oil agreement?
"A: On September 19, 1982, sir.
"Q: Now, what happened to the operation with the use of the bunker fuel oil supplied by Mobil
Oil?
"A: It was found out that during the introduction of the Mobil Oil bunker fuel oil we observed
that the flame is very different from the normal behavior when we are using other fuel oil. So,
on that first day we have difficulty on how to balance the flame. On the second day, we tried to
resume the normal flame but still coating cannot be developed and clinkering process is very
abnormal in the sense that it resulted to under burning of clinker and poor quality of clinker
coming out from the rotary kiln. Then on the third day, which is the 21st, we found out that there
are some red spots that occurred on the kiln shale (sic).
"Q: By the way, for clarification. When you used this bunker oil from the defendant delivery on
September 19, 1982 and as you have said, and the Court have seen that there were panels
indicating the conditions of the rotary kiln, did it register a particular heat?
"A: Yes, your Honor.
"Q: What was your reading then?
"A: For the inlet chamber temperature the ideal temperature kiln in order to have clinkering
process is from 950 to 1,000'C.
"Q: And on that day, did you come to know what was the heat for the inlet chamber?
A: It is in our logsheet, sir. It is very behind the normal.
"x x xx x x
x x x.
"Q. Now, for how many days did you continue using that bunker fuel oil supplied by Mobil Oil
Philippines?
"A: We used that oil from September 19 up to September 22.
"Q: After that, what happened?
"A: Then after the 22, we decided to stop the plant.
"Q: Why did you decide to stop the operation of the plant?
"A: Because we are encountering difficulty in our operation, sir. We cannot attain the
production target of 1,200 metric tons a day. Likewise, we have seen red spots, which occurred
on the 21st of September, so since these red spots cannot be developed, cannot be cured
anymore, to avoid further damages on the equipment, we decided to stop.
"Q: What are these red spots?
"A: These red spots, sir are sign that the brick lining inside the kiln already fall down (sic). So
when the red sport (sic) are present, meaning to say that there is no more brick lining.
"COURT:
"Q: Where does these appear, outside the cylindrical kiln or where?
"A:Outside the cylindrical kiln shale (sic), sir.
"ATTY. RACHO:
"Q: What is the reason why the brick-lining is no longer there?
"A: Sir, I would like to inform you that the life of the brick-lining is purely dependent on the
temperature inside the kiln. Once, this is heated up to about 1,400'C, this has to be maintained
most of the time. Any fluctuation in the temperature inside the kiln will result to contraction and
expansion of the kiln shell likewise, on the brick. So this contraction and expansion during that
time will result to lossening (sic) of the bricks, which is installed inside. And if this is not
properly coated, there is no coating as I previously mentioned, this will fall down. Since this is
installed in circumferential manner, one or two pieces of bricks that full (sic) down, all the rest
will continue then the second ring will get loose, so this will fall down also.
"Q: Now, on what day did these red spots developed since you first used the bunker fuel oil
supplied by Mobil Oil Philippines?
"A: On the second and third day which is on the 20th and 21st of September, sir, 1982."xxiv[24]
Urbano Cruz, vice-president of CCC, corroborating Engineer De Silva, testified that CCC
started using BFO from MOPI only on 19 September 1982 and that such use had to be stopped
on 22 September 1982 because of the abnormality in the heat it generated in the rotary kiln.xxv[25]
Petitioners, in a bid to still avoid liability, would argue that CCC waived its right to claim
damages by failing to observe the Procedures Manual handed to it by MOPI, and that it was
private respondent's "strict legal duty to inspect the deliveries prior to acceptance."xxvi[26] CCC
hardly could be blamed, however, for relying on the goodwill, reputation and business stature of
petitioners. It was enough that CCC, as a precautionary measure, so conducted random checking
and added supervisors to oversee the BFO deliveries.xxvii[27]
The Court of Appeals, anent the second issue, correctly ruled that MOPI could be held
accountable for the acts of CFS. The hauling contractxxviii[28] executed by and between MOPI and
CFS (to which CCC was not a party) laid out the responsibilities of CFS (the contractor); thus:
"1. The CONTRACTOR, in consideration of payments to be made by MOBIL in accordance

with the rates specified by the BOE (BOE Resolution 81-07) hereby undertakes and binds itself
to haul and transport any and all outgoing and incoming products of MOBIL on a non-exclusive
basis from the latter's Manila Terminal and/or from any other specified point or points to the
various shipping points or destinations in the area of Luzon, Philippines. PROVIDED, that the
CONTRACTOR may be required by MOBIL to render hauling services outside of the specified
points at the rate prevailing in the area.
"2. The CONTRACTOR hereby binds and obligates itself to deliver to the consignees any and
all cargoes within twenty-four (24) hours upon receipt of MOBIL'S written instruction or the
corresponding invoice/documents pertaining to said cargoes. It shall be the CONTRACTOR's
responsibility to insist that receipt of goods by consignee or his authorized representative is
acknowledged in writing on the Delivery Receipt and/or TOAs and these receipts shall be
surrendered to MOBIL's Bulk Plant immediately after delivery.
"x x xx x x
x x x.
"7. MOBIL binds and obligates itself to pay all hauling fees due to the CONTRACTOR,
computed in accordance with the government specified rates within reasonable time from
presentation of the hauling bills but in no case shall such bills be rendered oftener than once a
week but preferably twice a month.
"MOBIL is hereby authorized by the CONTRACTOR to withhold from the hauling fees any
amount to satisfy CONTRACTOR's liability to MOBIL.
"That bills should be supported by Hauler's Copy of Invoices and TOAs duly authenticated by
MOBIL's authorized personnel."xxix[29]
CFS was the contractor of MOPI, not CCC, and the contracted price of the BFO that CCC paid
to MOPI included hauling charges.xxx[30] The presumption laid down under Article 1523 of the
Civil Code that delivery to the carrier should be deemed to be delivery to the buyer would have
no application where, such as in this case, the sale itself specifically called for delivery by the
seller to the buyer at the latter's place of business.
WHEREFORE, the herein questioned decision of the Court of Appeals is AFFIRMED in toto.
Costs against petitioners.
SO ORDERED.
Bellosillo, Kapunan, and Hermosisima Jr., JJ., concur. Padilla, (Chairman), J., on leave.
G.R. No. L-51806 November 8, 1988

CIVIL AERONAUTICS ADMINISTRATION, petitioner,
vs.
COURT OF APPEALS and ERNEST E. SIMKE, respondents.
The Solicitor General for petitioner.
Ledesma, Guytingco, Veleasco & Associates for respondent Ernest E. Simke.
CORTES, J.:
Assailed in this petition for review on certiorari is the decision of the Court of Appeals affirming
the trial court decision which reads as follows:
WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff
the amount of P15,589.55 as full reimbursement of his actual medical and
hospital expenses, with interest at the legal rate from the commencement of the
suit; the amount of P20,200.00 as consequential damages; the amount of
P30,000.00 as moral damages; the amount of P40,000.00 as exemplary damages;
the further amount of P20,000.00 as attorney's fees and the costs [Rollo, p. 24].
The facts of the case are as follows:
Private respondent is a naturalized Filipino citizen and at the time of the incident was the
Honorary Consul Geileral of Israel in the Philippines.
In the afternoon of December 13, 1968, private respondent with several other persons went to
the Manila International Airport to meet his future son-in-law. In order to get a better view of the
incoming passengers, he and his group proceeded to the viewing deck or terrace of the airport.
While walking on the terrace, then filled with other people, private respondent slipped over an
elevation about four (4) inches high at the far end of the terrace. As a result, private respondent
fell on his back and broke his thigh bone.
The next day, December 14, 1968, private respondent was operated on for about three hours.
Private respondent then filed an action for damages based on quasi-delict with the Court of First
Instance of Rizal, Branch VII against petitioner Civil Aeronautics Administration or CAA as the
entity empowered "to administer, operate, manage, control, maintain and develop the Manila
International Airport ... ." [Sec. 32 (24), R.A. 776].
Said claim for damages included, aside from the medical and hospital bills, consequential
damages for the expenses of two lawyers who had to go abroad in private respondent's stead to
finalize certain business transactions and for the publication of notices announcing the
postponement of private respondent's daughter's wedding which had to be cancelled because of
his accident [Record on Appeal, p. 5].
Judgment was rendered in private respondent's favor prompting petitioner to appeal to the Court
of Appeals. The latter affirmed the trial court's decision. Petitioner then filed with the same court
a Motion for, Reconsideration but this was denied.
Petitioner now comes before this Court raising the following assignment of errors:
1. The Court of Appeals gravely erred in not holding that the present the CAA is
really a suit against the Republic of the Philippines which cannot be sued without
its consent, which was not given in this case.
2. The Court of Appeals gravely erred in finding that the injuries of respondent
Ernest E. Simke were due to petitioner's negligence although there was no
substantial evidence to support such finding; and that the inference that the hump
or elevation the surface of the floor area of the terrace of the fold) MIA building
is dangerous just because said respondent tripped over it is manifestly mistaken
circumstances that justify a review by this Honorable Court of the said finding
of fact of respondent appellate court (Garcia v. Court of Appeals, 33 SCRA 622;
Ramos v. CA, 63 SCRA 331.)
3. The Court of Appeals gravely erred in ordering petitioner to pay actual,
consequential, moral and exemplary damages, as well as attorney's fees to
respondent Simke although there was no substantial and competent proof to
support said awards I Rollo, pp. 93-94 1.
I
Invoking the rule that the State cannot be sued without its consent, petitioner contends that being
an agency of the government, it cannot be made a party-defendant in this case.
This Court has already held otherwise in the case of National Airports Corporation v. Teodoro,
Sr. [91 Phil. 203 (1952)]. Petitioner contends that the said ruling does not apply in this case
because: First, in the Teodoro case, the CAA was sued only in a substituted capacity, the
National Airports Corporation being the original party. Second, in the Teodoro case, the cause of
action was contractual in nature while here, the cause of action is based on a quasi-delict. Third,
there is no specific provision in Republic Act No. 776, the law governing the CAA, which would
justify the conclusion that petitioner was organized for business and not for governmental
purposes. [Rollo, pp. 94-97].
Such arguments are untenable.
First, the Teodoro case, far from stressing the point that the CAA was only substituted for the
National Airports Corporation, in fact treated the CAA as the real party in interest when it stated
that:
xxx xxx xxx
... To all legal intents and practical purposes, the National Airports Corporation is
dead and the Civil Aeronautics Administration is its heir or legal representative,
acting by the law of its creation upon its own rights and in its own name. The
better practice there should have been to make the Civil Aeronautics
Administration the third party defendant instead of the National Airports
Corporation. [National Airports Corp. v. Teodoro, supra, p. 208.]
xxx xxx xxx

Second, the Teodoro case did not make any qualification or limitation as to whether or not the
CAA's power to sue and be sued applies only to contractual obligations. The Court in the
Teodoro case ruled that Sections 3 and 4 of Executive Order 365 confer upon the CAA, without
any qualification, the power to sue and be sued, albeit only by implication. Accordingly, this
Court's pronouncement that where such power to sue and be sued has been granted without any
qualification, it can include a claim based on tort or quasi-delict [Rayo v. Court of First Instance
of Bulacan, G.R. Nos. 55273-83, December 19,1981, 1 1 0 SCRA 4561 finds relevance and
applicability to the present case.
Third, it has already been settled in the Teodoro case that the CAA as an agency is not immune
from suit, it being engaged in functions pertaining to a private entity.
xxx xxx xxx
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. It is engaged in
an enterprise which, far from being the exclusive prerogative of state, may, more
than the construction of public roads, be undertaken by private concerns.
[National Airports Corp. v. Teodoro, supra, p. 207.]
xxx xxx xxx
True, the law prevailing in 1952 when the Teodoro case was promulgated was Exec. Order 365
(Reorganizing the Civil Aeronautics Administration and Abolishing the National Airports
Corporation). Republic Act No. 776 (Civil Aeronautics Act of the Philippines), subsequently
enacted on June 20, 1952, did not alter the character of the CAA's objectives under Exec, Order
365. The pertinent provisions cited in the Teodoro case, particularly Secs. 3 and 4 of Exec. Order
365, which led the Court to consider the CAA in the category of a private entity were retained
substantially in Republic Act 776, Sec. 32 (24) and (25).<re||an1w> Said Act provides:
Sec. 32. Powers and Duties of the Administrator. Subject to the general
control and supervision of the Department Head, the Administrator shall have
among others, the following powers and duties:
xxx xxx xxx
(24) To administer, operate, manage, control, maintain and develop the Manila
International Airport and all government-owned aerodromes except those
controlled or operated by the Armed Forces of the Philippines including such
powers and duties as: (a) to plan, design, construct, equip, expand, improve,
repair or alter aerodromes or such structures, improvement or air navigation
facilities; (b) to enter into, make and execute contracts of any kind with any
person, firm, or public or private corporation or entity; ... .
(25) To determine, fix, impose, collect and receive landing fees, parking space
fees, royalties on sales or deliveries, direct or indirect, to any aircraft for its use of
aviation gasoline, oil and lubricants, spare parts, accessories and supplies, tools,
other royalties, fees or rentals for the use of any of the property under its
management and control.
xxx xxx xxx
From the foregoing, it can be seen that the CAA is tasked with private or non-governmental
functions which operate to remove it from the purview of the rule on State immunity from suit.
For the correct rule as set forth in the Tedoro case states:
xxx xxx xxx
Not all government entities, whether corporate or non-corporate, are immune
from suits. Immunity functions suits is determined by the character of the objects
for which the entity was organized. The rule is thus stated in Corpus Juris:
Suits against State agencies with relation to matters in which they
have assumed to act in private or non-governmental capacity, and
various suits against certain corporations created by the state for
public purposes, but to engage in matters partaking more of the
nature of ordinary business rather than functions of a
governmental or political character, are not regarded as suits
against the state. The latter is true, although the state may own
stock or property of such a corporation for by engaging in business
operations through a corporation, the state divests itself so far of
its sovereign character, and by implication consents to suits
against the corporation. (59 C.J., 313) [National Airport
Corporation v. Teodoro, supra, pp. 206-207; Emphasis supplied.]
This doctrine has been reaffirmed in the recent case of Malong v. Philippine National Railways
[G.R. No. L-49930, August 7, 1985, 138 SCRA 631, where it was held that the Philippine
National Railways, although owned and operated by the government, was not immune from suit
as it does not exercise sovereign but purely proprietary and business functions. Accordingly, as
the CAA was created to undertake the management of airport operations which primarily
involve proprietary functions, it cannot avail of the immunity from suit accorded to government
agencies performing strictly governmental functions.
II
Petitioner tries to escape liability on the ground that there was no basis for a finding of
negligence. There can be no negligence on its part, it alleged, because the elevation in question
"had a legitimate purpose for being on the terrace and was never intended to trip down people
and injure them. It was there for no other purpose but to drain water on the floor area of the
terrace" [Rollo, P. 99].
To determine whether or not the construction of the elevation was done in a negligent manner,
the trial court conducted an ocular inspection of the premises.
xxx xxx xxx
... This Court after its ocular inspection found the elevation shown in Exhs. A or
6-A where plaintiff slipped to be a step, a dangerous sliding step, and the
proximate cause of plaintiffs injury...
xxx xxx xxx

This Court during its ocular inspection also observed the dangerous and defective
condition of the open terrace which has remained unrepaired through the years. It
has observed the lack of maintenance and upkeep of the MIA terrace, typical of
many government buildings and offices. Aside from the litter allowed to
accumulate in the terrace, pot holes cause by missing tiles remained unrepaired
and unattented. The several elevations shown in the exhibits presented were
verified by this Court during the ocular inspection it undertook. Among these
elevations is the one (Exh. A) where plaintiff slipped. This Court also observed
the other hazard, the slanting or sliding step (Exh. B) as one passes the entrance
door leading to the terrace [Record on Appeal, U.S., pp. 56 and 59; Emphasis
supplied.]
The Court of Appeals further noted that:
The inclination itself is an architectural anomaly for as stated by the said witness,
it is neither a ramp because a ramp is an inclined surface in such a way that it will
prevent people or pedestrians from sliding. But if, it is a step then it will not serve
its purpose, for pedestrian purposes. (tsn, p. 35, Id.) [rollo, p. 29.]
These factual findings are binding and conclusive upon this Court. Hence, the CAA cannot
disclaim its liability for the negligent construction of the elevation since under Republic Act No.
776, it was charged with the duty of planning, designing, constructing, equipping, expanding,
improving, repairing or altering aerodromes or such structures, improvements or air navigation
facilities [Section 32, supra, R.A. 776]. In the discharge of this obligation, the CAA is dutybound to exercise due diligence in overseeing the construction and maintenance of the viewing
deck or terrace of the airport.
It must be borne in mind that pursuant to Article 1173 of the Civil Code, "(t)he fault or
negligence of the obligor consists in the omission of that diligence which is required by the
nature of the obligation and corresponds with the circumstances of the person, of the time and of
the place." Here, the obligation of the CAA in maintaining the viewing deck, a facility open to
the public, requires that CAA insure the safety of the viewers using it. As these people come to
the viewing deck to watch the planes and passengers, their tendency would be to look to where
the planes and the incoming passengers are and not to look down on the floor or pavement of the
viewing deck. The CAA should have thus made sure that no dangerous obstructions or
elevations exist on the floor of the deck to prevent any undue harm to the public.
The legal foundation of CAA's liability for quasi-delict can be found in Article 2176 of the Civil
Code which provides that "(w)hoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done... As the CAA knew of the existence
of the dangerous elevation which it claims though, was made precisely in accordance with the
plans and specifications of the building for proper drainage of the open terrace [See Record on
Appeal, pp. 13 and 57; Rollo, p. 391, its failure to have it repaired or altered in order to
eliminate the existing hazard constitutes such negligence as to warrant a finding of liability
based on quasi-delict upon CAA.
The Court finds the contention that private respondent was, at the very least, guilty of
contributory negligence, thus reducing the damages that plaintiff may recover, unmeritorious.
Contributory negligence under Article 2179 of the Civil Code contemplates a negligent act or
omission on the part of the plaintiff, which although not the proximate cause of his injury,
contributed to his own damage, the proximate cause of the plaintiffs own injury being the
defendant's lack of due care. In the instant case, no contributory negligence can be imputed to
the private respondent, considering the following test formulated in the early case of Picart v.
Smith, 37 Phil. 809 (1918):
The test by which to determine the existence of negligence in a particular case
may be stated as follows: Did the defendant in doing the alleged negligent act
use that reasonable care and caution which an ordinarily prudent man would
have used in the same situation? If not, then he is guilty of negligence. The law
here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law. The existence of the
negligence in a given case is not determined by reference to the personal
judgment of the actor in the situation before him. The law considers what would
be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given
situation must of course be always determined in the light of human experience
and in view of the facts involved in the particular case. Abstract speculations
cannot be here of much value but this much can be profitably said: Reasonable
men-overn their conduct by the circumstances which are before them or known to
them. They are not, and are not supposed to be omniscient of the future. Hence
they can be expected to take care only when there is something before them to
suggest or warn of danger. Could a prudent man, in the case under consideration,
foresee harm as a result of the course actually pursued' If so, it was the duty of
the actor to take precautions to guard against that harm. Reasonable foresight of
harm, followed by the ignoring of the suggestion born of this prevision, is always
necessary before negligence can be held to exist.... [Picart v. Smith, supra, p. 813;
Emphasis supplied.]
The private respondent, who was the plaintiff in the case before the lower court, could not have
reasonably foreseen the harm that would befall him, considering the attendant factual
circumstances. Even if the private respondent had been looking where he was going, the step in
question could not easily be noticed because of its construction. As the trial court found:
In connection with the incident testified to, a sketch, Exhibit O, shows a section
of the floorings oil which plaintiff had tripped, This sketch reveals two
pavements adjoining each other, one being elevated by four and one-fourth inches
than the other. From the architectural standpoint the higher, pavement is a step.
However, unlike a step commonly seen around, the edge of the elevated
pavement slanted outward as one walks to one interior of the terrace. The length
of the inclination between the edges of the two pavements is three inches.
Obviously, plaintiff had stepped on the inclination because had his foot landed on
the lower pavement he would not have lost his balance. The same sketch shows
that both pavements including the inclined portion are tiled in red cement, and as
shown by the photograph Exhibit A, the lines of the tilings are continuous. It
would therefore be difficult for a pedestrian to see the inclination especially
where there are plenty of persons in the terrace as was the situation when plaintiff
fell down. There was no warning sign to direct one's attention to the change in the
elevation of the floorings. [Rollo, pp. 2829.]
III
Finally, petitioner appeals to this Court the award of damages to private respondent. The liability
of CAA to answer for damages, whether actual, moral or exemplary, cannot be seriously doubted
in view of one conferment of the power to sue and be sued upon it, which, as held in the case of
Rayo v. Court of First Instance, supra, includes liability on a claim for quasi-dilict. In the
aforestated case, the liability of the National Power Corporation to answer for damages resulting
from its act of sudden, precipitate and simultaneous opening of the Angat Dam, which caused
the death of several residents of the area and the destruction of properties, was upheld since the
o,rant of the power to sue and be sued upon it necessarily implies that it can be held answerable
for its tortious acts or any wrongful act for that matter.
With respect to actual or compensatory damages, the law mandates that the same be proven.
Art. 2199. Except as provided by law or by stipulation, one are entitled to an
adequate compensation only for such pecuniary loss suffered by him as he has
duly proved. Such compensation is referred to as actual on compensatory
damages [New Civil Code].
Private respondent claims P15,589.55 representing medical and hospitalization bills. This Court
finds the same to have been duly proven through the testimony of Dr. Ambrosio Tangco, the
physician who attended to private respondent (Rollo, p. 26) and who Identified Exh. "H" which
was his bill for professional services [Rollo, p. 31].
Concerning the P20,200.00 alleged to have been spent for other expenses such as the
transportation of the two lawyers who had to represent private respondent abroad and the
publication of the postponement notices of the wedding, the Court holds that the same had also
been duly proven. Private respondent had adequately shown the existence of such losses and the
amount thereof in the testimonies before the trial court [CA decision, p. 81. At any rate, the
findings of the Court of Appeals with respect to this are findings of facts [One Heart Sporting
Club, Inc. v. Court of Appeals, G.R. Nos. 5379053972, Oct. 23, 1981, 108 SCRA 4161 which, as
had been held time and again, are, as a general rule, conclusive before this Court [Sese v.
Intermediate Appellate Court, G.R. No. 66186, July 31, 1987,152 SCRA 585].
With respect to the P30,000.00 awarded as moral damages, the Court holds private respondent
entitled thereto because of the physical suffering and physical injuries caused by the negligence
of the CAA [Arts. 2217 and 2219 (2), New Civil Code].
With respect to the award of exemplary damages, the Civil Code explicitly, states:
Art. 2229. Exemplary or corrective damages, are imposed, by way of example or
correction for the public good, in addition to the moral, liquidated or
compensatory
Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant
acted with gross negligence.
Gross negligence which, according to the Court, is equivalent to the term "notorious negligence"
and consists in the failure to exercise even slight care [Caunan v. Compania General de Tabacos,
56 Phil. 542 (1932)] can be attributed to the CAA for its failure to remedy the dangerous
condition of the questioned elevation or to even post a warning sign directing the attention of the
viewers to the change in the elevation of the floorings notwithstanding its knowledge of the
hazard posed by such elevation [Rollo, pp. 28-29; Record oil Appeal, p. 57]. The wanton
disregard by the CAA of the safety of the people using the viewing deck, who are charged an
admission fee, including the petitioner who paid the entrance fees to get inside the vantage place
[CA decision, p. 2; Rollo, p. 25] and are, therefore, entitled to expect a facility that is properly
and safely maintained justifies the award of exemplary damages against the CAA, as a
deterrent and by way of example or correction for the public good. The award of P40,000.00 by
the trial court as exemplary damages appropriately underscores the point that as an entity
changed with providing service to the public, the CAA. like all other entities serving the public.
has the obligation to provide the public with reasonably safe service.
Finally, the award of attorney's fees is also upheld considering that under Art. 2208 (1) of the
Civil Code, the same may be awarded whenever exemplary damages are awarded, as in this
case, and,at any rate, under Art. 2208 (11), the Court has the discretion to grant the same when it
is just and equitable.
However, since the Manila International Airport Authority (MIAA) has taken over the
management and operations of the Manila International Airport [renamed Ninoy Aquino
International Airport under Republic Act No. 6639] pursuant to Executive Order No. 778 as
amended by executive Orders Nos. 903 (1983), 909 (1983) and 298 (1987) and under Section 24
of the said Exec. Order 778, the MIAA has assumed all the debts, liabilities and obligations of
the now defunct Civil Aeronautics Administration (CAA), the liabilities of the CAA have now
been transferred to the MIAA.
WHEREFORE, finding no reversible error, the Petition for review on certiorari is DENIED and
the decision of the Court of Appeals in CA-G.R. No. 51172-R is AFFIRMED.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
G.R. No. L-52179
April 8, 1991
MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner

vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIA, IAUREANO
BANIA, JR., SOR MARIETA BANIA, MONTANO BANIA, ORJA BANIA, AND
LYDIA R. BANIA, respondents.
Mauro C. Cabading, Jr. for petitioner.
Simeon G. Hipol for private respondent.
MEDIALDEA, J.:
This is a petition for certiorari with prayer for the issuance of a writ of preliminary mandatory
injunction seeking the nullification or modification of the proceedings and the orders issued by
the respondent Judge Romeo N. Firme, in his capacity as the presiding judge of the Court of
First Instance of La Union, Second Judicial District, Branch IV, Bauang, La Union in Civil Case
No. 107-BG, entitled "Juana Rimando Bania, et al. vs. Macario Nieveras, et al." dated
November 4, 1975; July 13, 1976; August 23,1976; February 23, 1977; March 16, 1977; July 26,
1979; September 7, 1979; November 7, 1979 and December 3, 1979 and the decision dated
October 10, 1979 ordering defendants Municipality of San Fernando, La Union and Alfredo
Bislig to pay, jointly and severally, the plaintiffs for funeral expenses, actual damages consisting
of the loss of earning capacity of the deceased, attorney's fees and costs of suit and dismissing
the complaint against the Estate of Macario Nieveras and Bernardo Balagot.
The antecedent facts are as follows:
Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under
and in accordance with the laws of the Republic of the Philippines. Respondent Honorable Judge
Romeo N. Firme is impleaded in his official capacity as the presiding judge of the Court of First
Instance of La Union, Branch IV, Bauang, La Union. While private respondents Juana RimandoBania, Laureano Bania, Jr., Sor Marietta Bania, Montano Bania, Orja Bania and Lydia R.
Bania are heirs of the deceased Laureano Bania Sr. and plaintiffs in Civil Case No. 107-Bg
before the aforesaid court.
At about 7 o'clock in the morning of December 16, 1965, a collision occurred involving a
passenger jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a
gravel and sand truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump
truck of the Municipality of San Fernando, La Union and driven by Alfredo Bislig. Due to the
impact, several passengers of the jeepney including Laureano Bania Sr. died as a result of the
injuries they sustained and four (4) others suffered varying degrees of physical injuries.
On December 11, 1966, the private respondents instituted a compliant for damages against the
Estate of Macario Nieveras and Bernardo Balagot, owner and driver, respectively, of the
passenger jeepney, which was docketed Civil Case No. 2183 in the Court of First Instance of La
Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a Third Party
Complaint against the petitioner and the driver of a dump truck of petitioner.
Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent
judge and was subsequently docketed as Civil Case No. 107-Bg. By virtue of a court order dated
May 7, 1975, the private respondents amended the complaint wherein the petitioner and its
regular employee, Alfredo Bislig were impleaded for the first time as defendants. Petitioner filed
its answer and raised affirmative defenses such as lack of cause of action, non-suability of the
State, prescription of cause of action and the negligence of the owner and driver of the passenger
jeepney as the proximate cause of the collision.
In the course of the proceedings, the respondent judge issued the following questioned orders, to
wit:
(1) Order dated November 4, 1975 dismissing the cross-claim against Bernardo Balagot;
(2) Order dated July 13, 1976 admitting the Amended Answer of the Municipality of San
Fernando, La Union and Bislig and setting the hearing on the affirmative defenses only
with respect to the supposed lack of jurisdiction;
(3) Order dated August 23, 1976 deferring there resolution of the grounds for the Motion
to Dismiss until the trial;
(4) Order dated February 23, 1977 denying the motion for reconsideration of the order of
July 13, 1976 filed by the Municipality and Bislig for having been filed out of time;
(5) Order dated March 16, 1977 reiterating the denial of the motion for reconsideration
of the order of July 13, 1976;
(6) Order dated July 26, 1979 declaring the case deemed submitted for decision it
appearing that parties have not yet submitted their respective memoranda despite the
court's direction; and
(7) Order dated September 7, 1979 denying the petitioner's motion for reconsideration
and/or order to recall prosecution witnesses for cross examination.
On October 10, 1979 the trial court rendered a decision, the dispositive portion is hereunder
quoted as follows:
IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered for the
plaintiffs, and defendants Municipality of San Fernando, La Union and Alfredo Bislig are
ordered to pay jointly and severally, plaintiffs Juana Rimando-Bania, Mrs. Priscilla B.
Surell, Laureano Bania Jr., Sor Marietta Bania, Mrs. Fe B. Soriano, Montano Bania,
Orja Bania and Lydia B. Bania the sums of P1,500.00 as funeral expenses and
P24,744.24 as the lost expected earnings of the late Laureano Bania Sr., P30,000.00 as
moral damages, and P2,500.00 as attorney's fees. Costs against said defendants.
The Complaint is dismissed as to defendants Estate of Macario Nieveras and Bernardo
Balagot.
SO ORDERED. (Rollo, p. 30)
Petitioner filed a motion for reconsideration and for a new trial without prejudice to another
motion which was then pending. However, respondent judge issued another order dated
November 7, 1979 denying the motion for reconsideration of the order of September 7, 1979 for
having been filed out of time.
Finally, the respondent judge issued an order dated December 3, 1979 providing that if
defendants municipality and Bislig further wish to pursue the matter disposed of in the order of
July 26, 1979, such should be elevated to a higher court in accordance with the Rules of Court.
Hence, this petition.
Petitioner maintains that the respondent judge committed grave abuse of discretion amounting to
excess of jurisdiction in issuing the aforesaid orders and in rendering a decision. Furthermore,
petitioner asserts that while appeal of the decision maybe available, the same is not the speedy
and adequate remedy in the ordinary course of law.
On the other hand, private respondents controvert the position of the petitioner and allege that
the petition is devoid of merit, utterly lacking the good faith which is indispensable in a petition
for certiorari and prohibition. (Rollo, p. 42.) In addition, the private respondents stress that
petitioner has not considered that every court, including respondent court, has the inherent
power to amend and control its process and orders so as to make them conformable to law and
justice. (Rollo, p. 43.)
The controversy boils down to the main issue of whether or not the respondent court committed
grave abuse of discretion when it deferred and failed to resolve the defense of non-suability of
the State amounting to lack of jurisdiction in a motion to dismiss.
In the case at bar, the respondent judge deferred the resolution of the defense of non-suability of
the State amounting to lack of jurisdiction until trial. However, said respondent judge failed to
resolve such defense, proceeded with the trial and thereafter rendered a decision against the
municipality and its driver.
The respondent judge did not commit grave abuse of discretion when in the exercise of its
judgment it arbitrarily failed to resolve the vital issue of non-suability of the State in the guise of
the municipality. However, said judge acted in excess of his jurisdiction when in his decision
dated October 10, 1979 he held the municipality liable for the quasi-delict committed by its
regular employee.
The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of
the Constitution, to wit: "the State may not be sued without its consent."
Stated in simple parlance, the general rule is that the State may not be sued except when it gives
consent to be sued. Consent takes the form of express or implied consent.
Express consent may be embodied in a general law or a special law. The standing consent of the
State to be sued in case of money claims involving liability arising from contracts is found in
Act No. 3083. A special law may be passed to enable a person to sue the government for an
alleged quasi-delict, as in Merritt v. Government of the Philippine Islands (34 Phil 311). (see
United States of America v. Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.)
Consent is implied when the government enters into business contracts, thereby descending to
the level of the other contracting party, and also when the State files a complaint, thus opening
itself to a counterclaim. (Ibid)
Municipal corporations, for example, like provinces and cities, are agencies of the State when
they are engaged in governmental functions and therefore should enjoy the sovereign immunity
from suit. Nevertheless, they are subject to suit even in the performance of such functions
because their charter provided that they can sue and be sued. (Cruz, Philippine Political Law,
1987 Edition, p. 39)
A distinction should first be made between suability and liability. "Suability depends on the
consent of the state to be sued, liability on the applicable law and the established facts. The
circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it
can never be held liable if it does not first consent to be sued. Liability is not conceded by the
mere fact that the state has allowed itself to be sued. When the state does waive its sovereign
immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is
liable." (United States of America vs. Guinto, supra, p. 659-660)
Anent the issue of whether or not the municipality is liable for the torts committed by its
employee, the test of liability of the municipality depends on whether or not the driver, acting in
behalf of the municipality, is performing governmental or proprietary functions. As emphasized
in the case of Torio vs. Fontanilla (G. R. No. L-29993, October 23, 1978. 85 SCRA 599, 606),
the distinction of powers becomes important for purposes of determining the liability of the
municipality for the acts of its agents which result in an injury to third persons.
Another statement of the test is given in City of Kokomo vs. Loy, decided by the Supreme Court
of Indiana in 1916, thus:
Municipal corporations exist in a dual capacity, and their functions are twofold. In one
they exercise the right springing from sovereignty, and while in the performance of the
duties pertaining thereto, their acts are political and governmental. Their officers and
agents in such capacity, though elected or appointed by them, are nevertheless public
functionaries performing a public service, and as such they are officers, agents, and
servants of the state. In the other capacity the municipalities exercise a private,
proprietary or corporate right, arising from their existence as legal persons and not as
public agencies. Their officers and agents in the performance of such functions act in
behalf of the municipalities in their corporate or individual capacity, and not for the state
or sovereign power." (112 N.E., 994-995) (Ibid, pp. 605-606.)
It has already been remarked that municipal corporations are suable because their charters grant
them the competence to sue and be sued. Nevertheless, they are generally not liable for torts
committed by them in the discharge of governmental functions and can be held answerable only
if it can be shown that they were acting in a proprietary capacity. In permitting such entities to
be sued, the State merely gives the claimant the right to show that the defendant was not acting
in its governmental capacity when the injury was committed or that the case comes under the
exceptions recognized by law. Failing this, the claimant cannot recover. (Cruz, supra, p. 44.)
In the case at bar, the driver of the dump truck of the municipality insists that "he was on his
way to the Naguilian river to get a load of sand and gravel for the repair of San Fernando's
municipal streets." (Rollo, p. 29.)
In the absence of any evidence to the contrary, the regularity of the performance of official duty
is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule
that the driver of the dump truck was performing duties or tasks pertaining to his office.
We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District
Engineer, and the Provincial Treasurer (102 Phil 1186) that "the construction or maintenance of
roads in which the truck and the driver worked at the time of the accident are admittedly
governmental activities."
After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that
the municipality cannot be held liable for the torts committed by its regular employee, who was
then engaged in the discharge of governmental functions. Hence, the death of the passenger
tragic and deplorable though it may be imposed on the municipality no duty to pay monetary
compensation.
All premises considered, the Court is convinced that the respondent judge's dereliction in failing
to resolve the issue of non-suability did not amount to grave abuse of discretion. But said judge
exceeded his jurisdiction when it ruled on the issue of liability.
ACCORDINGLY, the petition is GRANTED and the decision of the respondent court is hereby
modified, absolving the petitioner municipality of any liability in favor of private respondents.
SO ORDERED.
Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur.
G.R. No. L-61744 June 25, 1984

MUNICIPALITY OF SAN MIGUEL, BULACAN, petitioner,
vs.
HONORABLE OSCAR C. FERNANDEZ, in his capacity as the Presiding Judge, Branch
IV, Baliuag, Bulacan, The PROVINCIAL SHERIFF of Bulacan, MARGARITA D. VDA.
DE IMPERIO, ADORACION IMPERIO, RODOLFO IMPERIO, CONRADO IMPERIO,
ERNESTO IMPERIO, ALFREDO IMPERIO, CARLOS IMPERIO, JR., JUAN
IMPERIO and SPOUSES MARCELO PINEDA and LUCILA PONGCO, respondents.
Pascual C. Liatchko for petitioner.
The Solicitor General and Marcelo Pineda for respondents.
RELOVA, J.:
In Civil Case No. 604-B, entitled "Margarita D. Vda. de Imperio, et al. vs. Municipal
Government of San Miguel, Bulacan, et al.", the then Court of First Instance of Bulacan, on
April 28, 1978, rendered judgment holding herein petitioner municipality liable to private
respondents, as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiffs and against the defendant Municipal Government of San Miguel
Bulacan, represented by Mayor Mar Marcelo G. Aure and its Municipal
Treasurer:
1. ordering the partial revocation of the Deed of Donation signed by the deceased
Carlos Imperio in favor of the Municipality of San Miguel Bulacan, dated
October 27, 1947 insofar as Lots Nos. 1, 2, 3, 4 and 5, Block 11 of Subdivision
Plan Psd-20831 are concerned, with an aggregate total area of 4,646 square
meters, which lots are among those covered and described under TCT No. T-1831
of the Register of Deeds of Bulacan in the name of the Municipal Government of
San Miguel Bulacan,
2. ordering the defendant to execute the corresponding Deed of Reconveyance
over the aforementioned five lots in favor of the plaintiffs in the proportion of the
undivided one-half () share in the name of plaintiffs Margarita D. Vda. de
Imperio, Adoracion, Rodolfo, Conrado, Ernesto, Alfredo, Carlos, Jr. and Juan, all
surnamed Imperio, and the remaining undivided one-half () share in favor of
plaintiffs uses Marcelo E. Pineda and Lucila Pongco;
3. ordering the defendant municipality to pay to the plaintiffs in the proportion
mentioned in the immediately preceding paragraph the sum of P64,440.00
corresponding to the rentals it has collected from the occupants for their use and
occupation of the premises from 1970 up to and including 1975, plus interest
thereon at the legal rate from January 1970 until fully paid;
4. ordering the restoration of ownership and possession over the five lots in
question in favor of the plaintiffs in the same proportion aforementioned;
5. ordering the defendant to pay the plaintiffs the sum of P3,000.00 for attomey's
fees; and to pay the cost of suit.
The counterclaim of the defendant is hereby ordered dismissed for lack of
evidence presented to substantiate the same.
SO ORDERED. (pp. 11-12, Rollo)
The foregoing judgment became final when herein petitioner's appeal was dismissed due to its
failure to file the record on appeal on time. The dismissal was affirmed by the then Court of
Appeals in CA-G.R. No. SP-12118 and by this Court in G.R. No. 59938. Thereafter, herein
private respondents moved for issuance of a writ of execution for the satisfaction of the
judgment. Respondent judge, on July 27, 1982, issued an order, to wit:
Considering that an entry of judgment had already been made on June 14, 1982 in
G. R. No. L-59938 and;
Considering further that there is no opposition to plaintiffs' motion for execution
dated July 23, 1983;
Let a writ of execution be so issued, as prayed for in the aforestated motion. (p.
10, Rollo)
Petitioner, on July 30, 1982, filed a Motion to Quash the writ of execution on the ground that the
municipality's property or funds are all public funds exempt from execution. The said motion to
quash was, however, denied by the respondent judge in an order dated August 23, 1982 and the
alias writ of execution stands in full force and effect.
On September 13, 1982, respondent judge issued an order which in part, states:
It is clear and evident from the foregoing that defendant has more than enough
funds to meet its judgment obligation. Municipal Treasurer Miguel C, Roura of
San Miguel, Bulacan and Provincial Treasurer of Bulacan Agustin O. Talavera
are therefor hereby ordered to comply with the money judgment rendered by
Judge Agustin C. Bagasao against said municipality. In like manner, the
municipal authorities of San Miguel, Bulacan are likewise ordered to desist from
plaintiffs' legal possession of the property already returned to plaintiffs by virtue
of the alias writ of execution.
Finally, defendants are hereby given an inextendible period of ten (10) days from
receipt of a copy of this order by the Office of the Provincial Fiscal of Bulacan
within which to submit their written compliance, (p. 24, Rollo)
When the treasurers (provincial and municipal) failed to comply with the order of September 13,
1982, respondent judge issued an order for their arrest and that they will be release only upon
compliance thereof.
Hence, the present petition on the issue whether the funds of the Municipality of San Miguel,
Bulacan, in the hands of the provincial and municipal treasurers of Bulacan and San Miguel,
respectively, are public funds which are exempt from execution for the satisfaction of the money
judgment in Civil Case No. 604-B.
Well settled is the rule that public funds are not subject to levy and execution. The reason for this
was explained in the case of Municipality of Paoay vs. Manaois, 86 Phil. 629 "that they are held
in trust for the people, intended and used for the accomplishment of the purposes for which
municipal corporations are created, and that to subject said properties and public funds to
execution would materially impede, even defeat and in some instances destroy said purpose."
And, in Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was held that "it is the settled
doctrine of the law that not only the public property but also the taxes and public revenues of
such corporations Cannot be seized under execution against them, either in the treasury or when
in transit to it. Judgments rendered for taxes, and the proceeds of such judgments in the hands of
officers of the law, are not subject to execution unless so declared by statute." Thus, it is clear
that all the funds of petitioner municipality in the possession of the Municipal Treasurer of San
Miguel, as well as those in the possession of the Provincial Treasurer of Bulacan, are also public
funds and as such they are exempt from execution.
Besides, Presidential Decree No. 477, known as "The Decree on Local Fiscal Administration",
Section 2 (a), provides:
SEC. 2. Fundamental Principles. Local government financial affairs,
transactions, and operations shall be governed by the fundamental principles set
forth hereunder:
(a) No money shall be paid out of the treasury except in pursuance of a lawful
appropriation or other specific statutory authority.
xxx xxx xxx
Otherwise stated, there must be a corresponding appropriation in the form of an ordinance duly
passed by the Sangguniang Bayan before any money of the municipality may be paid out. In the
case at bar, it has not been shown that the Sangguniang Bayan has passed an ordinance to this
effect.
Furthermore, Section 15, Rule 39 of the New Rules of Court, outlines the procedure for the
enforcement of money judgment:
(a) By levying on all the property of the debtor, whether real or personal, not
otherwise exempt from execution, or only on such part of the property as is
sufficient to satisfy the judgment and accruing cost, if he has more than sufficient
property for the purpose;
(b) By selling the property levied upon;
(c) By paying the judgment-creditor so much of the proceeds as will satisfy the
judgment and accruing costs; and
(d) By delivering to the judgment-debtor the excess, if any, unless otherwise,
directed by judgment or order of the court.
The foregoing has not been followed in the case at bar.
ACCORDINGLY, the petition is granted and the order of respondent judge, dated July 27, 1982,
granting issuance of a writ of execution; the alias writ of execution, dated July 27, 1982; and the
order of respondent judge, dated September 13, 1982, directing the Provincial Treasurer of
Bulacan and the Municipal Treasurer of San Miguel, Bulacan to comply with the money
judgments, are SET ASIDE; and respondents are hereby enjoined from implementing the writ of
execution.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Gutierrez, Jr., and De la Fuente, JJ,. concur.
G.R. Nos. 89898-99 October 1, 1990

MUNICIPALITY OF MAKATI, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE GUZMAN, JR., as
Judge RTC of Makati, Branch CXLII ADMIRAL FINANCE CREDITORS
CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA, respondents.
Defante & Elegado for petitioner.
Roberto B. Lugue for private respondent Admiral Finance Creditors' Consortium, Inc.
R ES OLUTIO N
CORTS, J.:
The present petition for review is an off-shoot of expropriation proceedings initiated by
petitioner Municipality of Makati against private respondent Admiral Finance Creditors
Consortium, Inc., Home Building System & Realty Corporation and one Arceli P. Jo, involving a
parcel of land and improvements thereon located at Mayapis St., San Antonio Village, Makati
and registered in the name of Arceli P. Jo under TCT No. S-5499.
It appears that the action for eminent domain was filed on May 20, 1986, docketed as Civil Case
No. 13699. Attached to petitioner's complaint was a certification that a bank account (Account
No. S/A 265-537154-3) had been opened with the PNB Buendia Branch under petitioner's name
containing the sum of P417,510.00, made pursuant to the provisions of Pres. Decree No. 42.
After due hearing where the parties presented their respective appraisal reports regarding the
value of the property, respondent RTC judge rendered a decision on June 4, 1987, fixing the
appraised value of the property at P5,291,666.00, and ordering petitioner to pay this amount
minus the advanced payment of P338,160.00 which was earlier released to private respondent.
After this decision became final and executory, private respondent moved for the issuance of a
writ of execution. This motion was granted by respondent RTC judge. After issuance of the writ
of execution, a Notice of Garnishment dated January 14, 1988 was served by respondent sheriff
Silvino R. Pastrana upon the manager of the PNB Buendia Branch. However, respondent sheriff
was informed that a "hold code" was placed on the account of petitioner. As a result of this,
private respondent filed a motion dated January 27, 1988 praying that an order be issued
directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance
due under the RTC decision dated June 4, 1987.
Petitioner filed a motion to lift the garnishment, on the ground that the manner of payment of the
expropriation amount should be done in installments which the respondent RTC judge failed to
state in his decision. Private respondent filed its opposition to the motion.
Pending resolution of the above motions, petitioner filed on July 20, 1988 a "Manifestation"
informing the court that private respondent was no longer the true and lawful owner of the
subject property because a new title over the property had been registered in the name of
Philippine Savings Bank, Inc. (PSB) Respondent RTC judge issued an order requiring PSB to
make available the documents pertaining to its transactions over the subject property, and the
PNB Buendia Branch to reveal the amount in petitioner's account which was garnished by
respondent sheriff. In compliance with this order, PSB filed a manifestation informing the court
that it had consolidated its ownership over the property as mortgagee/purchaser at an
extrajudicial foreclosure sale held on April 20, 1987. After several conferences, PSB and private
respondent entered into a compromise agreement whereby they agreed to divide between
themselves the compensation due from the expropriation proceedings.
Respondent trial judge subsequently issued an order dated September 8, 1988 which: (1)
approved the compromise agreement; (2) ordered PNB Buendia Branch to immediately release
to PSB the sum of P4,953,506.45 which corresponds to the balance of the appraised value of the
subject property under the RTC decision dated June 4, 1987, from the garnished account of
petitioner; and, (3) ordered PSB and private respondent to execute the necessary deed of
conveyance over the subject property in favor of petitioner. Petitioner's motion to lift the
garnishment was denied.
Petitioner filed a motion for reconsideration, which was duly opposed by private respondent. On
the other hand, for failure of the manager of the PNB Buendia Branch to comply with the order
dated September 8, 1988, private respondent filed two succeeding motions to require the bank
manager to show cause why he should not be held in contempt of court. During the hearings
conducted for the above motions, the general manager of the PNB Buendia Branch, a Mr.
Antonio Bautista, informed the court that he was still waiting for proper authorization from the
PNB head office enabling him to make a disbursement for the amount so ordered. For its part,
petitioner contended that its funds at the PNB Buendia Branch could neither be garnished nor
levied upon execution, for to do so would result in the disbursement of public funds without the
proper appropriation required under the law, citing the case of Republic of the Philippines v.
Palacio [G.R. No. L-20322, May 29, 1968, 23 SCRA 899].
Respondent trial judge issued an order dated December 21, 1988 denying petitioner's motion for
reconsideration on the ground that the doctrine enunciated in Republic v. Palacio did not apply
to the case because petitioner's PNB Account No. S/A 265-537154-3 was an account specifically
opened for the expropriation proceedings of the subject property pursuant to Pres. Decree No.
42. Respondent RTC judge likewise declared Mr. Antonio Bautista guilty of contempt of court
for his inexcusable refusal to obey the order dated September 8, 1988, and thus ordered his
arrest and detention until his compliance with the said order.
Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions for
certiorari with the Court of Appeals, which were eventually consolidated. In a decision
promulgated on June 28, 1989, the Court of Appeals dismissed both petitions for lack of merit,
sustained the jurisdiction of respondent RTC judge over the funds contained in petitioner's PNB
Account No. 265-537154-3, and affirmed his authority to levy on such funds.
Its motion for reconsideration having been denied by the Court of Appeals, petitioner now files
the present petition for review with prayer for preliminary injunction.
On November 20, 1989, the Court resolved to issue a temporary restraining order enjoining
respondent RTC judge, respondent sheriff, and their representatives, from enforcing and/or
carrying out the RTC order dated December 21, 1988 and the writ of garnishment issued
pursuant thereto. Private respondent then filed its comment to the petition, while petitioner filed
its reply.
Petitioner not only reiterates the arguments adduced in its petition before the Court of Appeals,
but also alleges for the first time that it has actually two accounts with the PNB Buendia Branch,
to wit:
xxx xxx xxx
(1) Account No. S/A 265-537154-3 exclusively for the expropriation of the
subject property, with an outstanding balance of P99,743.94.
(2) Account No. S/A 263-530850-7 for statutory obligations and other
purposes of the municipal government, with a balance of P170,098,421.72, as of
July 12, 1989.
xxx xxx xxx
[Petition, pp. 6-7; Rollo, pp. 11-12.]
Because the petitioner has belatedly alleged only in this Court the existence of two bank
accounts, it may fairly be asked whether the second account was opened only for the purpose of
undermining the legal basis of the assailed orders of respondent RTC judge and the decision of
the Court of Appeals, and strengthening its reliance on the doctrine that public funds are
exempted from garnishment or execution as enunciated in Republic v. Palacio [supra.] At any
rate, the Court will give petitioner the benefit of the doubt, and proceed to resolve the principal
issues presented based on the factual circumstances thus alleged by petitioner.
Admitting that its PNB Account No. S/A 265-537154-3 was specifically opened for
expropriation proceedings it had initiated over the subject property, petitioner poses no objection
to the garnishment or the levy under execution of the funds deposited therein amounting to
P99,743.94. However, it is petitioner's main contention that inasmuch as the assailed orders of
respondent RTC judge involved the net amount of P4,965,506.45, the funds garnished by
respondent sheriff in excess of P99,743.94, which are public funds earmarked for the municipal
government's other statutory obligations, are exempted from execution without the proper
appropriation required under the law.
There is merit in this contention. The funds deposited in the second PNB Account No. S/A 263530850-7 are public funds of the municipal government. In this jurisdiction, well-settled is the
rule that public funds are not subject to levy and execution, unless otherwise provided for by
statute [Republic v. Palacio, supra.; The Commissioner of Public Highways v. San Diego, G.R.
No. L-30098, February 18, 1970, 31 SCRA 616]. More particularly, the properties of a
municipality, whether real or personal, which are necessary for public use cannot be attached
and sold at execution sale to satisfy a money judgment against the municipality. Municipal
revenues derived from taxes, licenses and market fees, and which are intended primarily and
exclusively for the purpose of financing the governmental activities and functions of the
municipality, are exempt from execution [See Viuda De Tan Toco v. The Municipal Council of
Iloilo, 49 Phil. 52 (1926): The Municipality of Paoay, Ilocos Norte v. Manaois, 86 Phil. 629
(1950); Municipality of San Miguel, Bulacan v. Fernandez, G.R. No. 61744, June 25, 1984, 130
SCRA 56]. The foregoing rule finds application in the case at bar. Absent a showing that the
municipal council of Makati has passed an ordinance appropriating from its public funds an
amount corresponding to the balance due under the RTC decision dated June 4, 1987, less the
sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may
be validly effected on the public funds of petitioner deposited in Account No. S/A 263-5308507.
Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse.
Where a municipality fails or refuses, without justifiable reason, to effect payment of a final
money judgment rendered against it, the claimant may avail of the remedy of mandamus in
order to compel the enactment and approval of the necessary appropriation ordinance, and the
corresponding disbursement of municipal funds therefor [See Viuda De Tan Toco v. The
Municipal Council of Iloilo, supra; Baldivia v. Lota, 107 Phil. 1099 (1960); Yuviengco v.
Gonzales, 108 Phil. 247 (1960)].
In the case at bar, the validity of the RTC decision dated June 4, 1987 is not disputed by
petitioner. No appeal was taken therefrom. For three years now, petitioner has enjoyed
possession and use of the subject property notwithstanding its inexcusable failure to comply
with its legal obligation to pay just compensation. Petitioner has benefited from its possession of
the property since the same has been the site of Makati West High School since the school year
1986-1987. This Court will not condone petitioner's blatant refusal to settle its legal obligation
arising from expropriation proceedings it had in fact initiated. It cannot be over-emphasized that,
within the context of the State's inherent power of eminent domain,
. . . [j]ust compensation means not only the correct determination of the amount
to be paid to the owner of the land but also the payment of the land within a
reasonable time from its taking. Without prompt payment, compensation cannot
be considered "just" for the property owner is made to suffer the consequence of
being immediately deprived of his land while being made to wait for a decade or
more before actually receiving the amount necessary to cope with his loss
[Cosculluela v. The Honorable Court of Appeals, G.R. No. 77765, August 15,
1988, 164 SCRA 393, 400. See also Provincial Government of Sorsogon v. Vda.
de Villaroya, G.R. No. 64037, August 27, 1987, 153 SCRA 291].
The State's power of eminent domain should be exercised within the bounds of fair play and
justice. In the case at bar, considering that valuable property has been taken, the compensation to
be paid fixed and the municipality is in full possession and utilizing the property for public
purpose, for three (3) years, the Court finds that the municipality has had more than reasonable
time to pay full compensation.
WHEREFORE, the Court Resolved to ORDER petitioner Municipality of Makati to
immediately pay Philippine Savings Bank, Inc. and private respondent the amount of
P4,953,506.45. Petitioner is hereby required to submit to this Court a report of its compliance
with the foregoing order within a non-extendible period of SIXTY (60) DAYS from the date of
receipt of this resolution.
The order of respondent RTC judge dated December 21, 1988, which was rendered in Civil Case
No. 13699, is SET ASIDE and the temporary restraining order issued by the Court on November
20, 1989 is MADE PERMANENT.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
ii
iiiG.R. No. L-14639

March 25, 1919ZACARIAS VILLAVICENCIO, ET AL.,
petitioners,
vs.
JUSTO LUKBAN, ET AL., respondents.
Alfonso Mendoza for petitioners.
City Fiscal Diaz for respondents.
MALCOLM, J.:
The annals of juridical history fail to reveal a case quite as remarkable as the one which this
application for habeas corpus submits for decision. While hardly to be expected to be met with in
this modern epoch of triumphant democracy, yet, after all, the cause presents no great difficulty if
there is kept in the forefront of our minds the basic principles of popular government, and if we give
expression to the paramount purpose for which the courts, as an independent power of such a
government, were constituted. The primary question is Shall the judiciary permit a government
of the men instead of a government of laws to be set up in the Philippine Islands?
Omitting much extraneous matter, of no moment to these proceedings, but which might prove
profitable reading for other departments of the government, the facts are these: The Mayor of the
city of Manila, Justo Lukban, for the best of all reasons, to exterminate vice, ordered the segregated
district for women of ill repute, which had been permitted for a number of years in the city of
Manila, closed. Between October 16 and October 25, 1918, the women were kept confined to their
houses in the district by the police. Presumably, during this period, the city authorities quietly
perfected arrangements with the Bureau of Labor for sending the women to Davao, Mindanao, as
laborers; with some government office for the use of the coastguard cutters Corregidor and Negros,
and with the Constabulary for a guard of soldiers. At any rate, about midnight of October 25, the
police, acting pursuant to orders from the chief of police, Anton Hohmann and the Mayor of the city
of Manila, Justo Lukban, descended upon the houses, hustled some 170 inmates into patrol wagons,
and placed them aboard the steamers that awaited their arrival. The women were given no
opportunity to collect their belongings, and apparently were under the impression that they were
being taken to a police station for an investigation. They had no knowledge that they were destined
for a life in Mindanao. They had not been asked if they wished to depart from that region and had
neither directly nor indirectly given their consent to the deportation. The involuntary guests were
received on board the steamers by a representative of the Bureau of Labor and a detachment of
Constabulary soldiers. The two steamers with their unwilling passengers sailed for Davao during
the night of October 25.
The vessels reached their destination at Davao on October 29. The women were landed and
receipted for as laborers by Francisco Sales, provincial governor of Davao, and by Feliciano Yigo
and Rafael Castillo. The governor and the hacendero Yigo, who appear as parties in the case, had
no previous notification that the women were prostitutes who had been expelled from the city of
Manila. The further happenings to these women and the serious charges growing out of alleged illtreatment are of public interest, but are not essential to the disposition of this case. Suffice it to say,
generally, that some of the women married, others assumed more or less clandestine relations with
men, others went to work in different capacities, others assumed a life unknown and disappeared,
and a goodly portion found means to return to Manila.
To turn back in our narrative, just about the time the Corregidor and the Negros were putting in to
Davao, the attorney for the relatives and friends of a considerable number of the deportees
presented an application for habeas corpus to a member of the Supreme Court. Subsequently, the
application, through stipulation of the parties, was made to include all of the women who were sent
away from Manila to Davao and, as the same questions concerned them all, the application will be
considered as including them. The application set forth the salient facts, which need not be repeated,
and alleged that the women were illegally restrained of their liberty by Justo Lukban, Mayor of the
city of Manila, Anton Hohmann, chief of police of the city of Manila, and by certain unknown
parties. The writ was made returnable before the full court. The city fiscal appeared for the
respondents, Lukban and Hohmann, admitted certain facts relative to sequestration and deportation,
and prayed that the writ should not be granted because the petitioners were not proper parties,
because the action should have been begun in the Court of First Instance for Davao, Department of
Mindanao and Sulu, because the respondents did not have any of the women under their custody or
control, and because their jurisdiction did not extend beyond the boundaries of the city of Manila.
According to an exhibit attached to the answer of the fiscal, the 170 women were destined to be
laborers, at good salaries, on the haciendas of Yigo and Governor Sales. In open court, the fiscal
admitted, in answer to question of a member of the court, that these women had been sent out of
Manila without their consent. The court awarded the writ, in an order of November 4, that directed
Justo Lukban, Mayor of the city of Manila, Anton Hohmann, chief of police of the city of Manila,
Francisco Sales, governor of the province of Davao, and Feliciano Yigo, an hacendero of Davao,
to bring before the court the persons therein named, alleged to be deprived of their liberty, on
December 2, 1918.
Before the date mentioned, seven of the women had returned to Manila at their own expense. On
motion of counsel for petitioners, their testimony was taken before the clerk of the Supreme Court
sitting as commissioners. On the day named in the order, December 2nd, 1918, none of the persons
in whose behalf the writ was issued were produced in court by the respondents. It has been shown
that three of those who had been able to come back to Manila through their own efforts, were
notified by the police and the secret service to appear before the court. The fiscal appeared, repeated
the facts more comprehensively, reiterated the stand taken by him when pleading to the original
petition copied a telegram from the Mayor of the city of Manila to the provincial governor of Davao
and the answer thereto, and telegrams that had passed between the Director of Labor and the
attorney for that Bureau then in Davao, and offered certain affidavits showing that the women were
contained with their life in Mindanao and did not wish to return to Manila. Respondents Sales
answered alleging that it was not possible to fulfill the order of the Supreme Court because the
women had never been under his control, because they were at liberty in the Province of Davao, and
because they had married or signed contracts as laborers. Respondent Yigo answered alleging that
he did not have any of the women under his control and that therefore it was impossible for him to
obey the mandate. The court, after due deliberation, on December 10, 1918, promulgated a second
order, which related that the respondents had not complied with the original order to the satisfaction
of the court nor explained their failure to do so, and therefore directed that those of the women not
in Manila be brought before the court by respondents Lukban, Hohmann, Sales, and Yigo on
January 13, 1919, unless the women should, in written statements voluntarily made before the judge
of first instance of Davao or the clerk of that court, renounce the right, or unless the respondents
should demonstrate some other legal motives that made compliance impossible. It was further stated
that the question of whether the respondents were in contempt of court would later be decided and
the reasons for the order announced in the final decision.
Before January 13, 1919, further testimony including that of a number of the women, of certain
detectives and policemen, and of the provincial governor of Davao, was taken before the clerk of
the Supreme Court sitting as commissioner and the clerk of the Court of First Instance of Davao
acting in the same capacity. On January 13, 1919, the respondents technically presented before the
Court the women who had returned to the city through their own efforts and eight others who had
been brought to Manila by the respondents. Attorneys for the respondents, by their returns, once
again recounted the facts and further endeavored to account for all of the persons involved in the
habeas corpus. In substance, it was stated that the respondents, through their representatives and
agents, had succeeded in bringing from Davao with their consent eight women; that eighty-one
women were found in Davao who, on notice that if they desired they could return to Manila,
transportation fee, renounced the right through sworn statements; that fifty-nine had already
returned to Manila by other means, and that despite all efforts to find them twenty-six could not be
located. Both counsel for petitioners and the city fiscal were permitted to submit memoranda. The
first formally asked the court to find Justo Lukban, Mayor of the city of Manila, Anton Hohmann,
chief of police of the city of Manila, Jose Rodriguez and Fernando Ordax, members of the police
force of the city of Manila, Feliciano Yigo, an hacendero of Davao, Modesto Joaquin, the attorney
for the Bureau of Labor, and Anacleto Diaz, fiscal of the city of Manila, in contempt of court. The
city fiscal requested that the replica al memorandum de los recurridos, (reply to respondents'
memorandum) dated January 25, 1919, be struck from the record.
In the second order, the court promised to give the reasons for granting the writ of habeas corpus in
the final decision. We will now proceed to do so.
One fact, and one fact only, need be recalled these one hundred and seventy women were
isolated from society, and then at night, without their consent and without any opportunity to
consult with friends or to defend their rights, were forcibly hustled on board steamers for
transportation to regions unknown. Despite the feeble attempt to prove that the women left
voluntarily and gladly, that such was not the case is shown by the mere fact that the presence of the
police and the constabulary was deemed necessary and that these officers of the law chose the
shades of night to cloak their secret and stealthy acts. Indeed, this is a fact impossible to refute and
practically admitted by the respondents.
With this situation, a court would next expect to resolve the question By authority of what law
did the Mayor and the Chief of Police presume to act in deporting by duress these persons from
Manila to another distant locality within the Philippine Islands? We turn to the statutes and we find
Alien prostitutes can be expelled from the Philippine Islands in conformity with an Act of congress.
The Governor-General can order the eviction of undesirable aliens after a hearing from the Islands.
Act No. 519 of the Philippine Commission and section 733 of the Revised Ordinances of the city of
Manila provide for the conviction and punishment by a court of justice of any person who is a
common prostitute. Act No. 899 authorizes the return of any citizen of the United States, who may
have been convicted of vagrancy, to the homeland. New York and other States have statutes
providing for the commitment to the House of Refuge of women convicted of being common
prostitutes. Always a law! Even when the health authorities compel vaccination, or establish a
quarantine, or place a leprous person in the Culion leper colony, it is done pursuant to some law or
order. But one can search in vain for any law, order, or regulation, which even hints at the right of
the Mayor of the city of Manila or the chief of police of that city to force citizens of the Philippine
Islands and these women despite their being in a sense lepers of society are nevertheless not
chattels but Philippine citizens protected by the same constitutional guaranties as are other citizens
to change their domicile from Manila to another locality. On the contrary, Philippine penal law
specifically punishes any public officer who, not being expressly authorized by law or regulation,
compels any person to change his residence.
In other countries, as in Spain and Japan, the privilege of domicile is deemed so important as to be
found in the Bill of Rights of the Constitution. Under the American constitutional system, liberty of
abode is a principle so deeply imbedded in jurisprudence and considered so elementary in nature as
not even to require a constitutional sanction. Even the Governor-General of the Philippine Islands,
even the President of the United States, who has often been said to exercise more power than any
king or potentate, has no such arbitrary prerogative, either inherent or express. Much less, therefore,
has the executive of a municipality, who acts within a sphere of delegated powers. If the mayor and
the chief of police could, at their mere behest or even for the most praiseworthy of motives, render
the liberty of the citizen so insecure, then the presidents and chiefs of police of one thousand other
municipalities of the Philippines have the same privilege. If these officials can take to themselves
such power, then any other official can do the same. And if any official can exercise the power, then
all persons would have just as much right to do so. And if a prostitute could be sent against her
wishes and under no law from one locality to another within the country, then officialdom can hold
the same club over the head of any citizen.
Law defines power. Centuries ago Magna Charta decreed that "No freeman shall be taken, or
imprisoned, or be disseized of his freehold, or liberties, or free customs, or be outlawed, or exiled,
or any other wise destroyed; nor will we pass upon him nor condemn him, but by lawful judgment
of his peers or by the law of the land. We will sell to no man, we will not deny or defer to any man
either justice or right." (Magna Charta, 9 Hen., 111, 1225, Cap. 29; 1 eng. stat. at Large, 7.) No
official, no matter how high, is above the law. The courts are the forum which functionate to
safeguard individual liberty and to punish official transgressors. "The law," said Justice Miller,
delivering the opinion of the Supreme Court of the United States, "is the only supreme power in our
system of government, and every man who by accepting office participates in its functions is only
the more strongly bound to submit to that supremacy, and to observe the limitations which it
imposes upon the exercise of the authority which it gives." (U.S. vs. Lee [1882], 106 U.S., 196,
220.) "The very idea," said Justice Matthews of the same high tribunal in another case, "that one
man may be compelled to hold his life, or the means of living, or any material right essential to the
enjoyment of life, at the mere will of another, seems to be intolerable in any country where freedom
prevails, as being the essence of slavery itself." (Yick Wo vs. Hopkins [1886], 118 U.S., 356, 370.)
All this explains the motive in issuing the writ of habeas corpus, and makes clear why we said in
the very beginning that the primary question was whether the courts should permit a government of
men or a government of laws to be established in the Philippine Islands.
What are the remedies of the unhappy victims of official oppression? The remedies of the citizen
are three: (1) Civil action; (2) criminal action, and (3) habeas corpus.
The first is an optional but rather slow process by which the aggrieved party may recoup money
damages. It may still rest with the parties in interest to pursue such an action, but it was never
intended effectively and promptly to meet any such situation as that now before us.
As to criminal responsibility, it is true that the Penal Code in force in these Islands provides:
Any public officer not thereunto authorized by law or by regulations of a general character
in force in the Philippines who shall banish any person to a place more than two hundred
kilometers distant from his domicile, except it be by virtue of the judgment of a court, shall
be punished by a fine of not less than three hundred and twenty-five and not more than three
thousand two hundred and fifty pesetas.
Any public officer not thereunto expressly authorized by law or by regulation of a general
character in force in the Philippines who shall compel any person to change his domicile or
residence shall suffer the penalty of destierro and a fine of not less than six hundred and
twenty-five and not more than six thousand two hundred and fifty pesetas. (Art. 211.)
We entertain no doubt but that, if, after due investigation, the proper prosecuting officers find that
any public officer has violated this provision of law, these prosecutors will institute and press a
criminal prosecution just as vigorously as they have defended the same official in this action.
Nevertheless, that the act may be a crime and that the persons guilty thereof can be proceeded
against, is no bar to the instant proceedings. To quote the words of Judge Cooley in a case which
will later be referred to "It would be a monstrous anomaly in the law if to an application by one
unlawfully confined, ta be restored to his liberty, it could be a sufficient answer that the
confinement was a crime, and therefore might be continued indefinitely until the guilty party was
tried and punished therefor by the slow process of criminal procedure." (In the matter of Jackson
[1867], 15 Mich., 416, 434.) The writ of habeas corpus was devised and exists as a speedy and
effectual remedy to relieve persons from unlawful restraint, and as the best and only sufficient
defense of personal freedom. Any further rights of the parties are left untouched by decision on the
writ, whose principal purpose is to set the individual at liberty.
Granted that habeas corpus is the proper remedy, respondents have raised three specific objections
to its issuance in this instance. The fiscal has argued (l) that there is a defect in parties petitioners,
(2) that the Supreme Court should not a assume jurisdiction, and (3) that the person in question are
not restrained of their liberty by respondents. It was finally suggested that the jurisdiction of the
Mayor and the chief of police of the city of Manila only extends to the city limits and that perforce
they could not bring the women from Davao.
The first defense was not presented with any vigor by counsel. The petitioners were relatives and
friends of the deportees. The way the expulsion was conducted by the city officials made it
impossible for the women to sign a petition for habeas corpus. It was consequently proper for the
writ to be submitted by persons in their behalf. (Code of Criminal Procedure, sec. 78; Code of Civil
Procedure, sec. 527.) The law, in its zealous regard for personal liberty, even makes it the duty of a
court or judge to grant a writ of habeas corpus if there is evidence that within the court's
jurisdiction a person is unjustly imprisoned or restrained of his liberty, though no application be
made therefor. (Code of Criminal Procedure, sec. 93.) Petitioners had standing in court.
The fiscal next contended that the writ should have been asked for in the Court of First Instance of
Davao or should have been made returnable before that court. It is a general rule of good practice
that, to avoid unnecessary expense and inconvenience, petitions for habeas corpus should be
presented to the nearest judge of the court of first instance. But this is not a hard and fast rule. The
writ of habeas corpus may be granted by the Supreme Court or any judge thereof enforcible
anywhere in the Philippine Islands. (Code of Criminal Procedure, sec. 79; Code of Civil Procedure,
sec. 526.) Whether the writ shall be made returnable before the Supreme Court or before an inferior
court rests in the discretion of the Supreme Court and is dependent on the particular circumstances.
In this instance it was not shown that the Court of First Instance of Davao was in session, or that the
women had any means by which to advance their plea before that court. On the other hand, it was
shown that the petitioners with their attorneys, and the two original respondents with their attorney,
were in Manila; it was shown that the case involved parties situated in different parts of the Islands;
it was shown that the women might still be imprisoned or restrained of their liberty; and it was
shown that if the writ was to accomplish its purpose, it must be taken cognizance of and decided
immediately by the appellate court. The failure of the superior court to consider the application and
then to grant the writ would have amounted to a denial of the benefits of the writ.
The last argument of the fiscal is more plausible and more difficult to meet. When the writ was
prayed for, says counsel, the parties in whose behalf it was asked were under no restraint; the
women, it is claimed, were free in Davao, and the jurisdiction of the mayor and the chief of police
did not extend beyond the city limits. At first blush, this is a tenable position. On closer
examination, acceptance of such dictum is found to be perversive of the first principles of the writ
of habeas corpus.
A prime specification of an application for a writ of habeas corpus is restraint of liberty. The
essential object and purpose of the writ of habeas corpus is to inquire into all manner of involuntary
restraint as distinguished from voluntary, and to relieve a person therefrom if such restraint is
illegal. Any restraint which will preclude freedom of action is sufficient. The forcible taking of
these women from Manila by officials of that city, who handed them over to other parties, who
deposited them in a distant region, deprived these women of freedom of locomotion just as
effectively as if they had been imprisoned. Placed in Davao without either money or personal
belongings, they were prevented from exercising the liberty of going when and where they pleased.
The restraint of liberty which began in Manila continued until the aggrieved parties were returned to
Manila and released or until they freely and truly waived his right.
Consider for a moment what an agreement with such a defense would mean. The chief executive of
any municipality in the Philippines could forcibly and illegally take a private citizen and place him
beyond the boundaries of the municipality, and then, when called upon to defend his official action,
could calmly fold his hands and claim that the person was under no restraint and that he, the
official, had no jurisdiction over this other municipality. We believe the true principle should be
that, if the respondent is within the jurisdiction of the court and has it in his power to obey the order
of the court and thus to undo the wrong that he has inflicted, he should be compelled to do so. Even
if the party to whom the writ is addressed has illegally parted with the custody of a person before
the application for the writ is no reason why the writ should not issue. If the mayor and the chief of
police, acting under no authority of law, could deport these women from the city of Manila to
Davao, the same officials must necessarily have the same means to return them from Davao to
Manila. The respondents, within the reach of process, may not be permitted to restrain a fellow
citizen of her liberty by forcing her to change her domicile and to avow the act with impunity in the
courts, while the person who has lost her birthright of liberty has no effective recourse. The great
writ of liberty may not thus be easily evaded.
It must be that some such question has heretofore been presented to the courts for decision.
Nevertheless, strange as it may seem, a close examination of the authorities fails to reveal any
analogous case. Certain decisions of respectable courts are however very persuasive in nature.
A question came before the Supreme Court of the State of Michigan at an early date as to whether
or not a writ of habeas corpus would issue from the Supreme Court to a person within the
jurisdiction of the State to bring into the State a minor child under guardianship in the State, who
has been and continues to be detained in another State. The membership of the Michigan Supreme
Court at this time was notable. It was composed of Martin, chief justice, and Cooley, Campbell, and
Christiancy, justices. On the question presented the court was equally divided. Campbell, J., with
whom concurred Martin, C. J., held that the writ should be quashed. Cooley, J., one of the most
distinguished American judges and law-writers, with whom concurred Christiancy, J., held that the
writ should issue. Since the opinion of Justice Campbell was predicated to a large extent on his
conception of the English decisions, and since, as will hereafter appear, the English courts have
taken a contrary view, only the following eloquent passages from the opinion of Justice Cooley are
quoted:
I have not yet seen sufficient reason to doubt the power of this court to issue the present writ
on the petition which was laid before us. . . .
It would be strange indeed if, at this late day, after the eulogiums of six centuries and a half
have been expended upon the Magna Charta, and rivers of blood shed for its establishment;
after its many confirmations, until Coke could declare in his speech on the petition of right
that "Magna Charta was such a fellow that he will have no sovereign," and after the
extension of its benefits and securities by the petition of right, bill of rights and habeas
corpus acts, it should now be discovered that evasion of that great clause for the protection
of personal liberty, which is the life and soul of the whole instrument, is so easy as is
claimed here. If it is so, it is important that it be determined without delay, that the
legislature may apply the proper remedy, as I can not doubt they would, on the subject being
brought to their notice. . . .
The second proposition that the statutory provisions are confined to the case of
imprisonment within the state seems to me to be based upon a misconception as to the
source of our jurisdiction. It was never the case in England that the court of king's bench
derived its jurisdiction to issue and enforce this writ from the statute. Statutes were not
passed to give the right, but to compel the observance of rights which existed. . . .
The important fact to be observed in regard to the mode of procedure upon this writ is, that
it is directed to and served upon, not the person confined, but his jailor. It does not reach the
former except through the latter. The officer or person who serves it does not unbar the
prison doors, and set the prisoner free, but the court relieves him by compelling the
oppressor to release his constraint. The whole force of the writ is spent upon the respondent,
and if he fails to obey it, the means to be resorted to for the purposes of compulsion are fine
and imprisonment. This is the ordinary mode of affording relief, and if any other means are
resorted to, they are only auxiliary to those which are usual. The place of confinement is,
therefore, not important to the relief, if the guilty party is within reach of process, so that by
the power of the court he can be compelled to release his grasp. The difficulty of affording
redress is not increased by the confinement being beyond the limits of the state, except as
greater distance may affect it. The important question is, where the power of control
exercised? And I am aware of no other remedy. (In the matter of Jackson [1867], 15 Mich.,
416.)
The opinion of Judge Cooley has since been accepted as authoritative by other courts. (Rivers vs.
Mitchell [1881], 57 Iowa, 193; Breene vs. People [1911], Colo., 117 Pac. Rep., 1000; Ex parte
Young [1892], 50 Fed., 526.)

The English courts have given careful consideration to the subject. Thus, a child had been taken out
of English by the respondent. A writ of habeas corpus was issued by the Queen's Bench Division
upon the application of the mother and her husband directing the defendant to produce the child.
The judge at chambers gave defendant until a certain date to produce the child, but he did not do so.
His return stated that the child before the issuance of the writ had been handed over by him to
another; that it was no longer in his custody or control, and that it was impossible for him to obey
the writ. He was found in contempt of court. On appeal, the court, through Lord Esher, M. R., said:
A writ of habeas corpus was ordered to issue, and was issued on January 22. That writ
commanded the defendant to have the body of the child before a judge in chambers at the
Royal Courts of Justice immediately after the receipt of the writ, together with the cause of
her being taken and detained. That is a command to bring the child before the judge and
must be obeyed, unless some lawful reason can be shown to excuse the nonproduction of the
child. If it could be shown that by reason of his having lawfully parted with the possession
of the child before the issuing of the writ, the defendant had no longer power to produce the
child, that might be an answer; but in the absence of any lawful reason he is bound to
produce the child, and, if he does not, he is in contempt of the Court for not obeying the writ
without lawful excuse. Many efforts have been made in argument to shift the question of
contempt to some anterior period for the purpose of showing that what was done at some
time prior to the writ cannot be a contempt. But the question is not as to what was done
before the issue of the writ. The question is whether there has been a contempt in disobeying
the writ it was issued by not producing the child in obedience to its commands. (The Queen
vs. Bernardo [1889], 23 Q. B. D., 305. See also to the same effect the Irish case of In re
Matthews, 12 Ir. Com. Law Rep. [N. S.], 233; The Queen vs. Barnardo, Gossage's Case
[1890], 24 Q. B. D., 283.)
A decision coming from the Federal Courts is also of interest. A habeas corpus was directed to the
defendant to have before the circuit court of the District of Columbia three colored persons, with the
cause of their detention. Davis, in his return to the writ, stated on oath that he had purchased the
negroes as slaves in the city of Washington; that, as he believed, they were removed beyond the
District of Columbia before the service of the writ of habeas corpus, and that they were then
beyond his control and out of his custody. The evidence tended to show that Davis had removed the
negroes because he suspected they would apply for a writ of habeas corpus. The court held the
return to be evasive and insufficient, and that Davis was bound to produce the negroes, and Davis
being present in court, and refusing to produce them, ordered that he be committed to the custody of
the marshall until he should produce the negroes, or be otherwise discharged in due course of law.
The court afterwards ordered that Davis be released upon the production of two of the negroes, for
one of the negroes had run away and been lodged in jail in Maryland. Davis produced the two
negroes on the last day of the term. (United States vs. Davis [1839], 5 Cranch C.C., 622, Fed. Cas.
No. 14926. See also Robb vs. Connolly [1883], 111 U.S., 624; Church on Habeas, 2nd ed., p. 170.)
We find, therefore, both on reason and authority, that no one of the defense offered by the
respondents constituted a legitimate bar to the granting of the writ of habeas corpus.
There remains to be considered whether the respondent complied with the two orders of the
Supreme Court awarding the writ of habeas corpus, and if it be found that they did not, whether the
contempt should be punished or be taken as purged.
The first order, it will be recalled, directed Justo Lukban, Anton Hohmann, Francisco Sales, and
Feliciano Yigo to present the persons named in the writ before the court on December 2, 1918. The
order was dated November 4, 1918. The respondents were thus given ample time, practically one
month, to comply with the writ. As far as the record discloses, the Mayor of the city of Manila
waited until the 21st of November before sending a telegram to the provincial governor of Davao.
According to the response of the attorney for the Bureau of Labor to the telegram of his chief, there
were then in Davao women who desired to return to Manila, but who should not be permitted to do
so because of having contracted debts. The half-hearted effort naturally resulted in none of the
parties in question being brought before the court on the day named.
For the respondents to have fulfilled the court's order, three optional courses were open: (1) They
could have produced the bodies of the persons according to the command of the writ; or (2) they
could have shown by affidavit that on account of sickness or infirmity those persons could not
safely be brought before the court; or (3) they could have presented affidavits to show that the
parties in question or their attorney waived the right to be present. (Code of Criminal Procedure,
sec. 87.) They did not produce the bodies of the persons in whose behalf the writ was granted; they
did not show impossibility of performance; and they did not present writings that waived the right
to be present by those interested. Instead a few stereotyped affidavits purporting to show that the
women were contended with their life in Davao, some of which have since been repudiated by the
signers, were appended to the return. That through ordinary diligence a considerable number of the
women, at least sixty, could have been brought back to Manila is demonstrated to be found in the
municipality of Davao, and that about this number either returned at their own expense or were
produced at the second hearing by the respondents.
The court, at the time the return to its first order was made, would have been warranted summarily
in finding the respondents guilty of contempt of court, and in sending them to jail until they obeyed
the order. Their excuses for the non-production of the persons were far from sufficient. The,
authorities cited herein pertaining to somewhat similar facts all tend to indicate with what
exactitude a habeas corpus writ must be fulfilled. For example, in Gossage's case, supra, the
Magistrate in referring to an earlier decision of the Court, said: "We thought that, having brought
about that state of things by his own illegal act, he must take the consequences; and we said that he
was bound to use every effort to get the child back; that he must do much more than write letters for
the purpose; that he must advertise in America, and even if necessary himself go after the child, and
do everything that mortal man could do in the matter; and that the court would only accept clear
proof of an absolute impossibility by way of excuse." In other words, the return did not show that
every possible effort to produce the women was made by the respondents. That the court forebore at
this time to take drastic action was because it did not wish to see presented to the public gaze the
spectacle of a clash between executive officials and the judiciary, and because it desired to give the
respondents another chance to demonstrate their good faith and to mitigate their wrong.
In response to the second order of the court, the respondents appear to have become more zealous
and to have shown a better spirit. Agents were dispatched to Mindanao, placards were posted, the
constabulary and the municipal police joined in rounding up the women, and a steamer with free
transportation to Manila was provided. While charges and counter-charges in such a bitterly
contested case are to be expected, and while a critical reading of the record might reveal a failure of
literal fulfillment with our mandate, we come to conclude that there is a substantial compliance with
it. Our finding to this effect may be influenced somewhat by our sincere desire to see this unhappy
incident finally closed. If any wrong is now being perpetrated in Davao, it should receive an
executive investigation. If any particular individual is still restrained of her liberty, it can be made
the object of separate habeas corpus proceedings.
Since the writ has already been granted, and since we find a substantial compliance with it, nothing
further in this connection remains to be done.
The attorney for the petitioners asks that we find in contempt of court Justo Lukban, Mayor of the
city of Manila, Anton Hohmann, chief of police of the city of Manila, Jose Rodriguez, and Fernando
Ordax, members of the police force of the city of Manila, Modesto Joaquin, the attorney for the
Bureau of Labor, Feliciano Yigo, an hacendero of Davao, and Anacleto Diaz, Fiscal of the city of
Manila.
The power to punish for contempt of court should be exercised on the preservative and not on the
vindictive principle. Only occasionally should the court invoke its inherent power in order to retain
that respect without which the administration of justice must falter or fail. Nevertheless when one is
commanded to produce a certain person and does not do so, and does not offer a valid excuse, a
court must, to vindicate its authority, adjudge the respondent to be guilty of contempt, and must
order him either imprisoned or fined. An officer's failure to produce the body of a person in
obedience to a writ of habeas corpus when he has power to do so, is a contempt committed in the
face of the court. (Ex parte Sterns [1888], 77 Cal., 156; In re Patterson [1888], 99 N. C., 407.)
With all the facts and circumstances in mind, and with judicial regard for human imperfections, we
cannot say that any of the respondents, with the possible exception of the first named, has flatly
disobeyed the court by acting in opposition to its authority. Respondents Hohmann, Rodriguez,
Ordax, and Joaquin only followed the orders of their chiefs, and while, under the law of public
officers, this does not exonerate them entirely, it is nevertheless a powerful mitigating circumstance.
The hacendero Yigo appears to have been drawn into the case through a misconstruction by
counsel of telegraphic communications. The city fiscal, Anacleto Diaz, would seem to have done no
more than to fulfill his duty as the legal representative of the city government. Finding him innocent
of any disrespect to the court, his counter-motion to strike from the record the memorandum of
attorney for the petitioners, which brings him into this undesirable position, must be granted. When
all is said and done, as far as this record discloses, the official who was primarily responsible for the
unlawful deportation, who ordered the police to accomplish the same, who made arrangements for
the steamers and the constabulary, who conducted the negotiations with the Bureau of Labor, and
who later, as the head of the city government, had it within his power to facilitate the return of the
unfortunate women to Manila, was Justo Lukban, the Mayor of the city of Manila. His intention to
suppress the social evil was commendable. His methods were unlawful. His regard for the writ of
habeas corpus issued by the court was only tardily and reluctantly acknowledged.
It would be possible to turn to the provisions of section 546 of the Code of Civil Procedure, which
relates to the penalty for disobeying the writ, and in pursuance thereof to require respondent Lukban
to forfeit to the parties aggrieved as much as P400 each, which would reach to many thousands of
pesos, and in addition to deal with him as for a contempt. Some members of the court are inclined
to this stern view. It would also be possible to find that since respondent Lukban did comply
substantially with the second order of the court, he has purged his contempt of the first order. Some
members of the court are inclined to this merciful view. Between the two extremes appears to lie the
correct finding. The failure of respondent Lukban to obey the first mandate of the court tended to
belittle and embarrass the administration of justice to such an extent that his later activity may be
considered only as extenuating his conduct. A nominal fine will at once command such respect
without being unduly oppressive such an amount is P100.
In resume as before stated, no further action on the writ of habeas corpus is necessary. The
respondents Hohmann, Rodriguez, Ordax, Joaquin, Yigo, and Diaz are found not to be in contempt
of court. Respondent Lukban is found in contempt of court and shall pay into the office of the clerk
of the Supreme Court within five days the sum of one hundred pesos (P100). The motion of the
fiscal of the city of Manila to strike from the record the Replica al Memorandum de los Recurridos
of January 25, 1919, is granted. Costs shall be taxed against respondents. So ordered.
In concluding this tedious and disagreeable task, may we not be permitted to express the hope that
this decision may serve to bulwark the fortifications of an orderly government of laws and to protect
individual liberty from illegal encroachment.
Arellano, C.J., Avancea and Moir, JJ., concur.
Johnson, and Street, JJ., concur in the result.
TORRES, J., dissenting:

The undersigned does not entirely agree to the opinion of the majority in the decision of the habeas
corpus proceeding against Justo Lukban, the mayor of this city.
There is nothing in the record that shows the motive which impelled Mayor Lukban to oblige a
great number of women of various ages, inmates of the houses of prostitution situated in Gardenia
Street, district of Sampaloc, to change their residence.
We know no express law, regulation, or ordinance which clearly prohibits the opening of public
houses of prostitution, as those in the said Gardenia Street, Sampaloc. For this reason, when more
than one hundred and fifty women were assembled and placed aboard a steamer and transported to
Davao, considering that the existence of the said houses of prostitution has been tolerated for so
long a time, it is undeniable that the mayor of the city, in proceeding in the manner shown, acted
without authority of any legal provision which constitutes an exception to the laws guaranteeing the
liberty and the individual rights of the residents of the city of Manila.
We do not believe in the pomp and obstentation of force displayed by the police in complying with
the order of the mayor of the city; neither do we believe in the necessity of taking them to the
distant district of Davao. The said governmental authority, in carrying out his intention to suppress
the segregated district or the community formed by those women in Gardenia Street, could have
obliged the said women to return to their former residences in this city or in the provinces, without
the necessity of transporting them to Mindanao; hence the said official is obliged to bring back the
women who are still in Davao so that they may return to the places in which they lived prior to their
becoming inmates of certain houses in Gardenia Street.
As regards the manner whereby the mayor complied with the orders of this court, we do not find
any apparent disobedience and marked absence of respect in the steps taken by the mayor of the city
and his subordinates, if we take into account the difficulties encountered in bringing the said women
who were free at Davao and presenting them before this court within the time fixed, inasmuch as it
does not appear that the said women were living together in a given place. It was not because they
were really detained, but because on the first days there were no houses in which they could live
with a relative independent from one another, and as a proof that they were free a number of them
returned to Manila and the others succeeded in living separate from their companions who
continued living together.
To determine whether or not the mayor acted with a good purpose and legal object and whether he
has acted in good or bad faith in proceeding to dissolve the said community of prostitutes and to
oblige them to change their domicile, it is necessary to consider not only the rights and interests of
the said women and especially of the patrons who have been directing and conducting such a
reproachable enterprise and shameful business in one of the suburbs of this city, but also the rights
and interests of the very numerous people of Manila where relatively a few transients accidentally
and for some days reside, the inhabitants thereof being more than three hundred thousand (300,000)
who can not, with indifference and without repugnance, live in the same place with so many
unfortunate women dedicated to prostitution.
If the material and moral interests of the community as well as the demands of social morality are to
be taken into account, it is not possible to sustain that it is legal and permissible to establish a house
of pandering or prostitution in the midst of an enlightened population, for, although there were no
positive laws prohibiting the existence of such houses within a district of Manila, the dictates of
common sense and dictates of conscience of its inhabitants are sufficient to warrant the public
administration, acting correctly, in exercising the inevitable duty of ordering the closing and
abandonment of a house of prostitution ostensibly open to the public, and of obliging the inmates
thereof to leave it, although such a house is inhabited by its true owner who invokes in his behalf
the protection of the constitutional law guaranteeing his liberty, his individual rights, and his right to
property.
A cholera patient, a leper, or any other person affected by a known contagious disease cannot
invoke in his favor the constitutional law which guarantees his liberty and individual rights, should
the administrative authority order his hospitalization, reclusion, or concentration in a certain island
or distant point in order to free from contagious the great majority of the inhabitants of the country
who fortunately do not have such diseases. The same reasons exist or stand good with respect to the
unfortunate women dedicated to prostitution, and such reasons become stronger because the first
persons named have contracted their diseases without their knowledge and even against their will,
whereas the unfortunate prostitutes voluntarily adopted such manner of living and spontaneously
accepted all its consequences, knowing positively that their constant intercourse with men of all
classes, notwithstanding the cleanliness and precaution which they are wont to adopt, gives way to
the spread or multiplication of the disease known as syphilis, a venereal disease, which, although it
constitutes a secret disease among men and women, is still prejudicial to the human species in the
same degree, scope, and seriousness as cholera, tuberculosis, leprosy, pest, typhoid, and other
contagious diseases which produce great mortality and very serious prejudice to poor humanity.
If a young woman, instead of engaging in an occupation or works suitable to her sex, which can
give her sufficient remuneration for her subsistence, prefers to put herself under the will of another
woman who is usually older than she is and who is the manager or owner of a house of prostitution,
or spontaneously dedicates herself to this shameful profession, it is undeniable that she voluntarily
and with her own knowledge renounces her liberty and individual rights guaranteed by the
Constitution, because it is evident that she can not join the society of decent women nor can she
expect to get the same respect that is due to the latter, nor is it possible for her to live within the
community or society with the same liberty and rights enjoyed by every citizen. Considering her
dishonorable conduct and life, she should therefore be comprised within that class which is always
subject to the police and sanitary regulations conducive to the maintenance of public decency and
morality and to the conservation of public health, and for this reason it should not permitted that the
unfortunate women dedicated to prostitution evade the just orders and resolutions adopted by the
administrative authorities.
It is regrettable that unnecessary rigor was employed against the said poor women, but those who
have been worrying so much about the prejudice resulting from a governmental measure, which
being a very drastic remedy may be considered arbitrary, have failed to consider with due reflection
the interests of the inhabitants of this city in general and particularly the duties and responsibilities
weighing upon the authorities which administer and govern it; they have forgotten that many of
those who criticize and censure the mayor are fathers of families and are in duty bound to take care
of their children.
For the foregoing reasons, we reach the conclusion that when the petitioners, because of the
abnormal life they assumed, were obliged to change their residence not by a private citizen but by
the mayor of the city who is directly responsible for the conservation of public health and social
morality, the latter could take the step he had taken, availing himself of the services of the police in
good faith and only with the purpose of protecting the immense majority of the population from the
social evils and diseases which the houses of prostitution situated in Gardenia Street have been
producing, which houses have been constituting for years a true center for the propagation of
general diseases and other evils derived therefrom. Hence, in ordering the dissolution and
abandonment of the said houses of prostitution and the change of the domicile of the inmates
thereof, the mayor did not in bad faith violate the constitutional laws which guarantees the liberty
and the individual rights of every Filipino, inasmuch as the women petitioners do not absolutely
enjoy the said liberty and rights, the exercise of which they have voluntarily renounced in exchange
for the free practice of their shameful profession.
In very highly advanced and civilized countries, there have been adopted by the administrative
authorities similar measures, more or less rigorous, respecting prostitutes, considering them
prejudicial to the people, although it is true that in the execution of such measures more humane and
less drastic procedures, fortiter in re et suaviter in forma, have been adopted, but such procedures
have always had in view the ultimate object of the Government for the sake of the community, that
is, putting an end to the living together in a certain place of women dedicated to prostitution and
changing their domicile, with the problematical hope that they adopt another manner of living
which is better and more useful to themselves and to society.
In view of the foregoing remarks, we should hold, as we hereby hold, that Mayor Justo Lukban is
obliged to take back and restore the said women who are at present found in Davao, and who desire
to return to their former respective residences, not in Gardenia Street, Sampaloc District, with the
exception of the prostitutes who should expressly make known to the clerk of court their preference
to reside in Davao, which manifestation must be made under oath. This resolution must be
transmitted to the mayor within the shortest time possible for its due compliance. The costs shall be
charged de officio.
ARAULLO, J., dissenting in part:
I regret to dissent from the respectable opinion of the majority in the decision rendered in these
proceedings, with respect to the finding as to the importance of the contempt committed, according
to the same decision, by Justo Lukban, Mayor of the city of Manila, and the consequent imposition
upon him of a nominal fine of P100.
In the said decision, it is said:

The first order, it will be recalled, directed Justo Lukban, Anton Hohmann, Francisco Sales,
and Feliciano Yigo to present the persons named in the writ before the court on December
2, 1918. The order was dated November 4, 1918. The respondents were thus given ample
time, practically one month, to comply with the writ. As far as the record disclosed, the
mayor of the city of Manila waited until the 21st of November before sending a telegram to
the provincial governor of Davao. According to the response of the Attorney for the Bureau
of Labor to the telegram of his chief, there were then in Davao women who desired to return
to Manila, but who should not be permitted to do so because of having contracted debts. The
half-hearted effort naturally resulted in none of the parties in question being brought before
the court on the day named.
In accordance with section 87 of General Orders No. 58, as said in the same decision, the
respondents, for the purpose of complying with the order of the court, could have, (1) produced the
bodies of the persons according to the command of the writ; (2) shown by affidavits that on account
of sickness or infirmity the said women could not safely be brought before this court; and (3)
presented affidavits to show that the parties in question or their lawyers waived their right to be
present. According to the same decision, the said respondents ". . . did not produce the bodies of the
persons in whose behalf the writ was granted; did not show impossibility of performance; and did
not present writings, that waived the right to be present by those interested. Instead, a few
stereotyped affidavits purporting to show that the women were contented with their life in Davao,
some of which have since been repudiated by the signers, were appended to the return. That through
ordinary diligence a considerable number of the women, at least sixty, could have been brought
back to Manila is demonstrated by the fact that during this time they were easily to be found in the
municipality of Davao, and that about this number either returned at their own expense or were
produced at the second hearing by the respondents."
The majority opinion also recognized that, "That court, at the time the return to its first order was
made, would have been warranted summarily in finding the respondent guilty of contempt of court,
and in sending them to jail until they obeyed the order. Their excuses for the non production of the
persons were far from sufficient." To corroborate this, the majority decision cites the case of the
Queen vs. Barnardo, Gossage's Case ([1890], 24 Q. B. D., 283) and added "that the return did not
show that every possible effort to produce the women was made by the respondents."
When the said return by the respondents was made to this court in banc and the case discussed, my
opinion was that Mayor Lukban should have been immediately punished for contempt.
Nevertheless, a second order referred to in the decision was issued on December 10, 1918, requiring
the respondents to produce before the court, on January 13, 1919, the women who were not in
Manila, unless they could show that it was impossible to comply with the said order on the two
grounds previously mentioned. With respect to this second order, the same decision has the
following to say:
In response to the second order of the court, the respondents appear to have become more
zealous and to have shown a better spirit. Agents were dispatched to Mindanao, placards
were posted, the constabulary and the municipal police joined in rounding up the women,
and a steamer with free transportation to Manila was provided. While charges and
countercharges in such a bitterly contested case are to be expected, and while a critical
reading of the record might reveal a failure of literal fulfillment with our mandate, we come
to conclude that there is a substantial compliance with it.
I do not agree to this conclusion.

The respondent mayor of the city of Manila, Justo Lukban, let 17 days elapse from the date of the
issuance of the first order on November 4th till the 21st of the same month before taking the first
step for compliance with the mandate of the said order; he waited till the 21st of November, as the
decision says, before he sent a telegram to the provincial governor o f Davao and naturally this halfhearted effort, as is so qualified in the decision, resulted in that none of the women appeared before
this court on December 2nd. Thus, the said order was not complied with, and in addition to this
noncompliance there was the circumstances that seven of the said women having returned to Manila
at their own expense before the said second day of December and being in the antechamber of the
court room, which fact was known to Chief of Police Hohmann, who was then present at the trial
and to the attorney for the respondents, were not produced before the court by the respondents nor
did the latter show any effort to present them, in spite of the fact that their attention was called to
this particular by the undersigned.
The result of the said second order was, as is said in the same decision, that the respondents, on
January 13th, the day fixed for the protection of the women before this court, presented technically
the seven (7) women above-mentioned who had returned to the city at their own expense and the
other eight (8) women whom the respondents themselves brought to Manila, alleging moreover that
their agents and subordinates succeeded in bringing them from Davao with their consent; that in
Davao they found eighty-one (81) women who, when asked if they desired to return to Manila with
free transportation, renounced such a right, as is shown in the affidavits presented by the
respondents to this effect; that, through other means, fifty-nine (59) women have already returned to
Manila, but notwithstanding the efforts made to find them it was not possible to locate the
whereabouts of twenty-six (26) of them. Thus, in short, out of the one hundred and eighty-one (181)
women who, as has been previously said, have been illegally detained by Mayor Lukban and Chief
of Police Hohmann and transported to Davao against their will, only eight (8) have been brought to
Manila and presented before this court by the respondents in compliance with the said two orders.
Fifty-nine (59) of them have returned to Manila through other means not furnished by the
respondents, twenty-six of whom were brought by the attorney for the petitioners, Mendoza, on his
return from Davao. The said attorney paid out of his own pocket the transportation of the said
twenty-six women. Adding to these numbers the other seven (7) women who returned to this city at
their own expense before January 13 we have a total of sixty-six (66), which evidently proves, on
the one hand, the falsity of the allegation by the respondents in their first answer at the trial of
December 2, 1918, giving as one of the reasons for their inability to present any of the said women
that the latter were content with their life in Mindanao and did not desire to return to Manila; and,
on the other hand, that the respondents, especially the first named, that is Mayor Justo Lukban, who
acted as chief and principal in all that refers to the compliance with the orders issued by this court,
could bring before December 2nd, the date of the first hearing of the case, as well as before January
13th, the date fixed for the compliance with the second order, if not the seventy-four (74) women
already indicated, at least a great number of them, or at least sixty (60) of them, as is said in the
majority decision, inasmuch as the said respondent could count upon the aid of the Constabulary
forces and the municipal police, and had transportation facilities for the purpose. But the said
respondent mayor brought only eight (8) of the women before this court on January 13th. This fact
can not, in my judgment, with due respect to the majority opinion, justify the conclusion that the
said respondent has substantially complied with the second order of this court, but on the other hand
demonstrates that he had not complied with the mandate of this court in its first and second orders;
that neither of the said orders has been complied with by the respondent Justo Lukban, Mayor of the
city of Manila, who is, according to the majority decision, principally responsible for the contempt,
to which conclusion I agree. The conduct of the said respondent with respect to the second order
confirms the contempt committed by non-compliance with the first order and constitutes a new
contempt because of non-compliance with the second, because of the production of only eight (8) of
the one hundred and eighty-one (181) women who have been illegally detained by virtue of his
order and transported to Davao against their will, committing the twenty-six (26) women who could
not be found in Davao, demonstrates in my opinion that, notwithstanding the nature of the case
which deals with the remedy of habeas corpus, presented by the petitioners and involving the
question whether they should or not be granted their liberty, the respondent has not given due
attention to the same nor has he made any effort to comply with the second order. In other words, he
has disobeyed the said two orders; has despised the authority of this court; has failed to give the
respect due to justice; and lastly, he has created and placed obstacles to the administration of justice
in the said habeas corpus proceeding, thus preventing, because of his notorious disobedience, the
resolution of the said proceeding with the promptness which the nature of the same required.
Contempt of court has been defined as a despising of the authority, justice, or dignity of the
court; and he is guilty of contempt whose conduct is such as tends to bring the authority and
administration of the law into disrespect or disregard. . . ." (Ruling Case Law, vol. 6, p. 488.)
It is a general principle that a disobedience of any valid order of the court constitutes
contempt, unless the defendant is unable to comply therewith. (Ruling Case Law, vol. 6, p.
502.)
It is contempt to employ a subterfuge to evade the judgment of the court, or to obstruct or
attempt to obstruct the service of legal process. If a person hinders or prevents the service of
process by deceiving the officer or circumventing him by any means, the result is the same
as though he had obstructed by some direct means. (Ruling Case Law, vol. 6, p. 503.)
While it may seem somewhat incongruous to speak, as the courts often do, of enforcing
respect for the law and for the means it has provided in civilized communities for
establishing justice, since true respect never comes in that way, it is apparent nevertheless
that the power to enforce decorum in the courts and obedience to their orders and just
measures is so essentially a part of the life of the courts that it would be difficult to conceive
of their usefulness or efficiency as existing without it. Therefore it may be said generally
that where due respect for the courts as ministers of the law is wanting, a necessity arises for
the use of compulsion, not, however, so much to excite individual respect as to compel
obedience or to remove an unlawful or unwarranted interference with the administration of
justice. (Ruling Case Law, vol. 6, p. 487.)
The power to punish for contempt is as old as the law itself, and has been exercised from the
earliest times. In England it has been exerted when the contempt consisted of scandalizing
the sovereign or his ministers, the law-making power, or the courts. In the American states
the power to punish for contempt, so far as the executive department and the ministers of
state are concerned, and in some degree so far as the legislative department is concerned, is
obsolete, but it has been almost universally preserved so far as regards the judicial
department. The power which the courts have of vindicating their own authority is a
necessary incident to every court of justice, whether of record or not; and the authority for
issuing attachments in a proper case for contempts out of court, it has been declared, stands
upon the same immemorial usage as supports the whole fabric of the common law. . . .
(Ruling Case Law, vol. 6, p. 489.)
The undisputed importance of the orders of this court which have been disobeyed; the loss of the
prestige of the authority of the court which issued the said orders, which loss might have been
caused by noncompliance with the same orders on the part of the respondent Justo Lukban; the
damages which might have been suffered by some of the women illegally detained, in view of the
fact that they were not brought to Manila by the respondents to be presented before the court and of
the further fact that some of them were obliged to come to this city at their own expense while still
others were brought to Manila by the attorney for the petitioners, who paid out of his own pocket
the transportation of the said women; and the delay which was necessarily incurred in the resolution
of the petition interposed by the said petitioners and which was due to the fact that the said orders
were not opportunately and duly obeyed and complied with, are circumstances which should be
taken into account in imposing upon the respondent Justo Lukban the penalty corresponding to the
contempt committed by him, a penalty which, according to section 236 of the Code of Civil
Procedure, should consist of a fine not exceeding P1,000 or imprisonment not exceeding months, or
both such fine and imprisonment. In the imposition of the penalty, there should also be taken into
consideration the special circumstance that the contempt was committed by a public authority, the
mayor of the city of Manila, the first executive authority of the city, and consequently, the person
obliged to be the first in giving an example of obedience and respect for the laws and the valid and
just orders of the duly constituted authorities as well as for the orders emanating from the courts of
justice, and in giving help and aid to the said courts in order that justice may be administered with
promptness and rectitude.
I believe, therefore, that instead of the fine of one hundred pesos (P100), there should be imposed
upon the respondent Justo Lukban a fine of five hundred pesos (P500), and all the costs should be
charged against him. Lastly, I believe it to be my duty to state here that the records of this
proceeding should be transmitted to the Attorney-General in order that, after a study of the same
and deduction from the testimony which he may deem necessary, and the proper transmittal of the
same to the fiscal of the city of Manila and to the provincial fiscal of Davao, both the latter shall
present the corresponding informations for the prosecution and punishment of the crimes which
have been committed on the occasion when the illegal detention of the women was carried into
effect by Mayor Justo Lukban of the city of Manila and Chief of Police Anton Hohmann, and also
of those crimes committed by reason of the same detention and while the women were in Davao.
This will be one of the means whereby the just hope expressed in the majority decision will be
realized, that is, that in the Philippine Islands there should exist a government of laws and not a
government of men and that this decision may serve to bulwark the fortifications of an orderly
Government of laws and to protect individual liberty from illegal encroachments.
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[G.R. No. L-9657. November 29, 1956.

Political Law 1 CasesPage 2 of 182

Political Law 1 CasesPage 4 of 182

G.R. No. L-32052 July 25, 1975

ROLANDO REA, CONSTANTINO REA, CECILIA RICO, CECILIO RILLORAZA,

doctrine in Bacani v. National Coconut Corporation, 21 based on the Wilsonian classification of

Political Law 1 CasesPage 11 of 182

G.R. No. L-9959 December 13, 1916

Political Law 1 CasesPage 24 of 182

Political Law 1 CasesPage 27 of 182

G.R. No. L-5

September 17, 1945

CO KIM CHAM (alias CO KIM CHAM), petitioner,

Political Law 1 CasesPage 41 of 182

G.R. No. L-36409 October 26, 1973

Political Law 1 CasesPage 45 of 182

G.R. No. L-409

January 30, 1947

ANASTACIO LAUREL, petitioner,

government or sovereign subsists, and therefore there is no such thing as suspended

independence, the Commonwealth of the Philippines shall thenceforth be known as the

Separate Opinions not included here.

Political Law 1 CasesPage 50 of 182

G.R. No. L-533

August 20, 1946

RAMON RUFFY, ET AL., petitioners,

Political Law 1 CasesPage 51 of 182

Political Law 1 CasesPage 55 of 182

G.R. No. L-46930 June 10, 1988

Political Law 1 CasesPage 60 of 182

G.R. No. 84607 March 19, 1993

victims) EDDIE AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO

CAMPOS, JR., J.:

Political Law 1 CasesPage 66 of 182

Political Law 1 CasesPage 67 of 182

Political Law 1 CasesPage 70 of 182

G.R. No. L-5156

March 11, 1954

CARMEN FESTEJO, demandante-apelante,

Political Law 1 CasesPage 73 of 182

G.R. No. 76607 February 26, 1990

Political Law 1 CasesPage 77 of 182

of the principles of independence and equality of States. However, the rules of

Given the official character of the above-described letters, we have to conclude

Political Law 1 CasesPage 84 of 182

[G.R. No. 91359. September 25, 1992.]

Political Law 1 CasesPage 86 of 182

Respondent VMPSI opposed the motion.

Thus did we hold in Shauf v. Court of Appeals, 191 SCRA 713:

"Nonetheless, a continued adherence to the doctrine of nonsuability is not to be deplored for as

Political Law 1 CasesPage 90 of 182

G.R. No. L-11154

March 21, 1916

Political Law 1 CasesPage 97 of 182

G.R. No. L-26400 February 29, 1972

Political Law 1 CasesPage 100 of 182

G.R. No. 70853 March 12, 1987

Political Law 1 CasesPage 101 of 182

Political Law 1 CasesPage 104 of 182

G.R. No. L-35645 May 22, 1985

ABAD SANTOS, J.:

Separate Opinions not included here.

Political Law 1 CasesPage 108 of 182