REPUBLIC VS. VILLASOR, ET AL.

G.R. No. L-30671

November 28, 1973

Facts:
On July 7, 1969, 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 petitioner confirming the arbitration award in the
amount of P1,712,396.40. The award is for the satisfaction of a judgment against the
Phlippine Government.
On June 24, 1969, respondent Honorable Guillermo Villasor issued an Order
declaring the decision final and executory. Villasor directed the Sheriffs of Rizal
Province, Quezon City as well as Manila to execute said decision. The Provincial Sheriff
of Rizal served Notices of Garnishment with several Banks, specially on Philippine
Veterans Bank and PNB.
The funds of the Armed Forces of the Philippines on deposit with Philippine
Veterans Bank and PNB 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 AFP.
Petitioner, on certiorari, filed prohibition proceedings against respondent Judge
Villasor for acting in excess of jurisdiction with grave abuse of discretion amounting to
lack of jurisdiction in granting the issuance of a Writ of Execution against the properties
of the AFP, hence the notices and garnishment are null and void.

Issue:
Is the Writ of Execution issued by Judge Villasor valid?

Held:
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. 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.
The State may not be sued without its consent. 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. 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 the 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.
SYQUIA VS. LOPEZ, ET AL.
G.R. No. L-1648
August 17, 1949

Facts:
Plaintiffs, Pedro Syquia and Leopoldo Syquia are the undivided joint owners of
three apartment buildings situated in Manila. They executed three lease contracts – one
for each of the three apartments. The period for the three leases was to be “for the
duration of the war and six months thereafter, unless sooner terminated by the US.” The
apartment buildings were used for billeting and quartering officers of the US Armed
Forces stationed in Manila.
Six months after September 2, 1945 – when Japan surrendered – plaintiffs
approached the defendants George Moore and Erland Tillman and requested the return
of the apartment buildings. Moore and Tillman expressed to plaintiffs that the US Army
wanted to continue occupying the premises. Plaintiffs requested to renegotiate said
leases, to execute a lease contract for a period of three years and to pay a reasonable
rental higher than those payable under the old contracts. Respondents sent a letter
refusing to execute new leases but advised that the US Army will vacate the apartments
before February 1, 1947. Not being in conformity with the old lease agreements,
plaintiffs formally requested Tillman to cancel said leases and to release the apartments
on June 28, 1946. Tillman refused to comply with the request. Because of the
assurance that the US Government would vacate the premises before February 1, 1947,
the plaintiffs took no further steps to secure possession of the buildings and accepted
the monthly rentals tendered by respondents. On February 17, 1947, plaintiffs served a
formal notice to the occupants demanding: (a) cancellation of said leases; (b) increase in
rentals to P300 a month; (c) execution of new leases (d) release of said apartment
buildings within thirty days of said notice in the event of failure to comply with said
demands.
The thirty-day period lapsed without any of the respondents complying with the
demand. Plaintiffs commenced an action in the Municipal Court of Manila in the form of
an action for Unlawful Detainer against respondents. Respondents filed a Motion to
Dismiss on the ground that the court had no jurisdiction over the defendants and over
the subject matter of the action because the real party in interest was the US
Government and not the individual defendants. Furthermore, the respondent argued
that the war between the US and her allies on one side and Germany and Japan on the
other had not yet been terminated and consequently the period of the three leases has
not yet expired. Also, a foreign government like the US cannot be sued in the courts of
another state without its consent. That even though the US Government was not named
as the defendant in the complaint, it is nevertheless the real defendant as the parties
named are officers of the US Government.
The Municiapl Court dismissed the action. The CFI of Manila affirmed the order
of the lower court.

Issue:
(1) Who is the real party in interest?
(2) Does the court have jurisdiction to hear and try the case?

Held:
(1) The Court is convinced that the real party in interest as defendant in the
original case is the US Government. The lessee in each of the three lease
agreements was the United States of America and the lease agreement
 themselves were executed in her name by her officials acting as her agents.
The considerations or rentals was always paid by the US Government. The
original action in the Municiapl Court was brought on the basis of these three
lease contracts and it is obvious in the opinion of this court that any back
rentals or increased rentals will have to be paid by the US Government not
only because the contracts were entered into by such Government but also
because the premises were used by officers of her armed forces during the
war and immediately after the terminations of hostilities.
(2) It is clear that the courts of the Philippines 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 US
Government has not given its consent to the filing of the suit which is
essentially against her, though not in name. Morever, 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 this country.