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Republic v.

Feliciano FACTS: 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. On January 22, 1970, Feliciano filed a complaint with the then Court of First Instance of Camarines Sur against the RP, 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. Feliciano 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 his 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. 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 Feliciano and should therefore be excluded therefrom. Feliciano 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. ISSUE: WON the State can be sued for recovery and possession of a parcel of land RULING: NO RATIONALE: A suit against the State, 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. It may be invoked by the courts sua sponte at any stage of the proceedings. Waiver of immunity, being a derogation of sovereignty, will not be inferred lightly. but must be construed in strictissimi juris (of strictest right). 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.

Addtl: 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. 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," 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. G.R. No. L-11154 March 21, 1916 E. MERRITT vs. GOVERNMENT OF THE PHILIPPINE ISLANDS FACTS: Counsel for the plaintiff insists 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, who is an alleged agent or employee of the Government; (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. Consequently, the Government issued an act allowing the plaintiff to commence a lawsuit against it. ISSUE: 1) WON the Government conceded its liability to the plaintiff by allowing a lawsuit to commence against it. 2) WON the chauffeur is a government employee or agent. HELD: 1) NO. 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. 2) NO. 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 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. The chauffeur of the ambulance of the General Hospital was not such an agent.

allowed by law, with legal interest from the time of disbursement.

US Vs. Ruiz 136 SCRA 487 Facts: The usa had a naval base in subic, zambales. The base was one of those provided in the military bases agreement between phils. and the US. Respondent alleges that it won in the bidding conducted by the US for the constrcution of wharves in said base that was merely awarded to another group. For this reason, a suit for specific preformance was filed by him against the US. Issue: Whether the US naval base in bidding for said contracts exercise governmental functions to be able to invoke state immunity. Held: The traditional role of the state immunity excempts a state from being sued in the courts of another state without its consent or waiver. This rule is necessary consequence of the principle of indepemndence and equality of states. Howecer, the rules of international law are not petrified; they are continually and evolving and because the activities of states have multiplied. It has been necessary to distinguish them between sovereign and governmental acts and private, commercial and proprietory acts. the result is that state immunity now extends only to sovereign and governmental acts. The restrictive application of state immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign. Its commercial activities of economic affairs. A state may be 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 conracts relates the exercise of its sovereign function. In this case, the project are integral part of the naval base which is devoted to the defense of both US and phils., indisputably, a function of the government of highest order, they are not utilized for , nor dedicated to commercial or business purposes.

Froilan vs. Pan Oriental Shipping Co. September 30, 1954 103 PHIL. 473 PARAS, J.: Nature of the Case: Appeal from an Order of the CFI of Manila. FACTS Defendant Pan Oriental took possession of the vessel in question after it had been repossessed by the Shipping Administration and title thereto reacquired by the government, following the original purchaser, Fernando Froilans, default in his payment of the unpaid balance and insurance premiums for the said vessel. Pan Oriental chartered said vessel and operated the same after it had repaired the vessel and paid the stipulated initial payment, thereby exercising its option to purchase, pursuant to a bareboat charter contract entered between said company and the Shipping Corporation. The Cabinet resolved to restore Froilan to his rights under the original contract of sale on condition that he shall pay a sum of money upon delivery of the vessel to him, that he shall continue paying the remaining installments due, and that he shall assume the expenses incurred for the repair and by docking of the vessel. Pan Oriental protested to thi s restoration of Froilans rights under the contract of sale, for the reason that when the vessel was delivered to it, the Shipping Administration had authority to dispose of said authority to the property, Froilan having already relinquished whatever rights he may have thereon. Froilan paid the required cash of P10, 000.00 and as Pan Oriental refused to surrender possession of the vessel, he filed an action for in the CFI of Manila to recover possession thereof and have him declared the rightful owner of said property. The Republic of the Philippines was allowed to intervene in said civil case praying for the possession of the in order that the chattel mortgage constituted thereon may be foreclosed. ISSUE Whether or not the governments motion to dismiss Pan Oriental counterclaims may prosper. HELD: Under the circumstances already ad voted to, Pan Oriental cannot be considered a possessor in bad faith until after the institution of the instant case. However, since it is not disputed that said appellant is entitled to the refund of such expenses with the right to retain the vessel until he has been reimbursed therefore. As it is by the corrected acts of defendant and intervenor Republic of the Philippines that the appellant ha a lien far his expenses, appellees Froilan, Compania Maratma, and the Republic of the Philippines are declared liable for the reimbursement to appellant of its legitimate expenses, as

FONTANILLA V MALIAMAN ADMINSITRATION 194 SCRA 486 PARAS; February 27, 1991

and

NATIONAL

IRRIGATION

NATURE Resolution

FACTS The National Irrigation Administration (NIA) maintains that it does not perform solely and primarily proprietary functions, but is an agency of the government tasked with governmental functions, and is therefore not liable for the tortuous act of its driver Garcia, who was not its special agent. o NIA believes this bases this on: PD 552 amended some provisions of RA 3601 (the law which created the NIA) The case of Angat River Irrigation System v. Angat River Workers Union Angat Case: Although the majority opinion declares that the Angat System, like the NIA, exercised a governmental function because the nature of its powers and functions does not show that it was intended to bring to the Government any special corporate benefit or pecuniary profit, a strong dissenting opinion held that Angat River system is a government entity exercising proprietary functions. The Angat dissenting opinion: Alegre protested the announced termination of his employment. He argued that although his contract did stipulate that the same would terminate on July 17, 1976, since his services were necessary and desirable in the usual business of his employer, and his employment had lasted for five years, he had acquired the status of regular employee and could not be removed except for valid cause. The employment contract of 1971 was executed when the Labor Code of the Philippines had not yet been promulgated, which came into effect some 3 years after the perfection of the contract.

Certainly, the state and the community as a whole are largely benefited by the services the agency renders, but these functions are only incidental to the principal aim of the agency, which is the irrigation of lands. NIA is a government agency invested with a corporate personality separate and distinct from the government, thus is governed by the Corporation Law. Section 1 of Republic Act No. 3601 provides: Sec. 1. Name and Domicile A body corporate is hereby created which shall be known as the National Irrigation Administration. . . . which shall be organized immediately after the approval of this Act. It shall have its principal seat of business in the City of Manila and shall have representatives in all provinces, for the proper conduct of its business. (Emphasis for emphasis). Besides, Section 2, subsection b of P.D. 552 provides that: (b) To charge and collect from the beneficiaries of the water from all irrigation systems constructed by or under its administration, such fees or administration charges as may be necessary to cover the cost of operation, maintenance and insurance, and to recover the cost of construction within a reasonable period of time to the extent consistent with government policy; to recover funds or portions thereof expended for the construction and/or rehabilitation of communal irrigation systems which funds shall accrue to a special fund for irrigation development under section 2 hereof; Unpaid irrigation fees or administration charges shall be preferred liens first, upon the land benefited, and then on the crops raised thereon, which liens shall have preference over all other liens except for taxes on the land, and such preferred liens shall not be removed until all fees or administration charges are paid or the property is levied upon and sold by the National Irrigation Administration for the satisfaction thereof. . . . The same section also provides that NIA may sue and be sued in court. It has its own assets and liabilities. It also has corporate powers to be exercised by a Board of Directors. Section 2, subsection (f): (f) . . . and to transact such business, as are directly or indirectly necessary, incidental or conducive to the attainment of the above powers and objectives, including the power to establish and maintain subsidiaries, and in general, to exercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act. DISPOSITION We conclude that the National Irrigation Administration is a government agency with a juridical personality separate and distinct from the government. It is not a mere agency of the government but a corporate body performing proprietary functions. Therefore, it may be held liable for the damages caused by the negligent act of its driver who was not its special agent. ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is DENIED WITH FINALITY. The decision of this Court in G.R. No. 55963 and G.R. No. 61045 dated December 1, 1989 is hereby AFFIRMED. DISSENTING: PADILLA: to say that NIA has opened itself to suit is one thing; to say that it is liable for damages arising from tort committed by its employees, is still another thing. The state or a government agency performing governmental functions may be held liable for tort committed by its employees only when it acts through a special agent.

ISSUE WON the NIR is a government agency with a juridical personality separate and distinct from the government, thereby opening it up to the possibility that it may be held liable for the damages caused by its driver, who was not its special agent

HELD YES Reasoning the functions of government have been classified into governmental or constituent and proprietary or ministrant. The former involves the exercise of sovereignty and considered as compulsory; the latter connotes merely the exercise of proprietary functions and thus considered as optional.

The National Irrigation Administration was not created for purposes of local government. While it may be true that the NIA was essentially a service agency of the government aimed at promoting public interest and public welfare, such fact does not make the NIA essentially and purely a "government-function" corporation. NIA was created for the purpose of "constructing, improving, rehabilitating, and administering all national irrigation systems in the Philippines, including all communal and pump irrigation projects."

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 infavor of respondents P.J. Kiener Co., Ltd., Gavino Unchuan, and InternationalConstruction Corporation and against petitioner confirming the arbitration award in theamount of P1,712,396.40.The award is for the satisfaction of a judgment against thePhlippine Government. On June 24, 1969, respondent Honorable Guillermo Villasor issued an Orderdeclaring the decision final and executory.Villasor directed the Sheriffs of RizalProvince, Quezon City as well as Manila to execute said decision.The Provincial Sheriffof Rizal served Notices of Garnishment with several Banks, specially on PhilippineVeterans Bank and PNB. The funds of the Armed Forces of the Philippines on deposit with PhilippineVeterans Bank and PNB are public funds duly appropriated and allocated for thepayment of pensions of retirees, pay and allowances of military and civilian personneland for maintenance and operations of the AFP. Petitioner, on certiorari, filed prohibition proceedings against respondent JudgeVillasor for acting in excess of jurisdiction with grave abuse of discretion amounting tolack of jurisdiction in granting the issuance of a Writ of Execution against the propertiesof the AFP, hence the notices and garnishment are null and void. Issue: Is the Writ of Execution issued by Judge Villasor valid?

general or special law, it may limit claimants actiononly up to the completion of proceedings anterior to the stage of execution and that thepower of the Courts ends when the judgment is rendered, since the government fundsand properties may not be seized under writs of execution or garnishment to satisfy suchjudgments, is based on obvious considerations of public policy.Disbursements of publicfunds must be covered by the corresponding appropriation as required by law.Thefunctions and public services rendered by the State cannot be allowed to be paralyzedor disrupted by the diversion of public funds from their legitimate and specific objects, asappropriated by law.

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

Held: What was done by respondent Judge is not in conformity with the dictates of theConstitution.It is a fundamental postulate of constitutionalism flowing from the juristicconcept of sovereignty that the state as well as its government is immune from suitunless it gives its consent.A sovereign is exempt from suit, not because of any formalconception or obsolete theory, but on the logical and practical ground that there can beno 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 logicand sound sense from a basic concept is that public funds cannot be the object of agarnishment proceeding even if the consent to be sued had been previously granted andthe state liability adjudged.The universal rule that where the State gives its consent tobe sued by private parties either by

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.

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