THE HOLY SEE vs. THE HON. ERIBERTO U. ROSARIO, JR.

, as Presiding Judge of the Regional Trial Court

of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC.
G.R. No. 101949 December 1, 1994

FACTS: 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 located in
the Municipality of Paranaque registered in the name of petitioner. Said lot was contiguous with two
other lots 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).
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
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.
the trial court issued an order denying, among others, petitioners motion to dismiss after finding that
petitioner shed off [its] sovereign immunity by entering into the business contract in question
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.

ISSUE:
Whether the Holy See is immune from suit insofar as its business relations regarding selling a lot to a
private entity

RULING:
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.
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
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.
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.
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
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.

WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183 against
petitioner is DISMISSED.
























JUSMAG Philippines vs. NLRC (Article XVI Sec. 3) (Foreign
Government)

Facts: Florencio Sacramento (private respondent) was one of the 74
security assistance support personnel (SASP) working at the Joint
United States Military Assistance Group to the Philippines (JUSMAG-
Phils.). He had been with JUSMAG from 1969-1992. When dismissed, he
held the position of Illustrator 2 and incumbent Pres. of JUSMAG
Phils.- Filipino Civilian Employees Assoc., a labor org. duly
registered with DOLE. His services were terminated allegedly due to
the abolition of his position.
Sacramento filed complaint w/ DOLE on the ground that he
was illegally suspended and dismissed from service by JUSMAG. He
asked for reinstatement. JUSMAG filed Motion to Dismiss invoking
immunity from suit. Labor arbiter Cueto in an Order dismissed the
complaint "for want of jurisdiction". Sacramento appealed to
NLRC.
NLRC reversed the ruling of the labor arbiter and held that
petitioner had lost its right not to be sued bec. (1) the principle
of estoppel-that JUSMAG failed to refute the existence of employer-
employee rel. (2)JUSMAG has waived its right to immunity from suit
when it hired the services of private respondent. Hence, this
petition.

Issue:W/N JUSMAG has immunity from suit

Held: Yes. When JUSMAG took the services of private respondent, it
was performing a governmental function on behalf of the United
States pursuant to the Military Assistance Agreement between the
Phils. and America* JUSMAG consists of Air, Naval and Army group
and its primary task was to advise and assist the Phils. on air
force, army and naval matters. A suit against JUSMAG is one against
the United States government, and in the absence of any waiver or
consent of the latter to the suit, the complaint against JUSMAG
cannot prosper.
Immunity of State from suit is one of the universally
recognized principles of international law that the Phils.
recognizes and adopts as part of the law of the land. Immunity is
commonly understood as the exemption of the state and its organs
from the judicial jurisdiction of another state and anchored on the
principle of the sovereign equality of states under which one state
cannot assert jurisdiction over another in violation of the maxim
par in parem non habeat imperium (an equal has no power over an
equal)
As it stands now, the application of the doctrine of
immunity from suit has been restricted to sovereign or governmental
activities and does not extend to commercial, private and
proprietary acts.
GARCIA VS. CHIEF OF STAFF
This is an appeal from an order of dismissal.

Facts:
It appears that on December 1, 1961, the plaintiff-appellant, Mariano E. Garcia, filed with the Court of
First Instance of Pangasinan an action to collect a sum of money against the Chief of Staff and the
Adjutant General of the Armed Forces of the Philippines, the Chairman of the Philippine Veterans Board
and or the Auditor General. According to the complainant, sometime in July 1948, the plaintiff suffered
injuries while undergoing the 10-month military training at Camp Floridablanca, Pampanga. Sometime
thereafter he filed his claim under Commonwealth Act 400 and in April 1957, he submitted some papers
in support of his claim to the Adjutant General's Office upon the latter's request. Then on May 2, 1957,
he received a letter from the said Adjutant General's Office rejecting his claim for disability benefits.
Then on November 24,1958, after further demands of the plaintiff, the Adjutant General's Office denied
the said claim because according to latter the Commonwealth Act 400 had already been repealed by
Republic Act 610 which took effect on January 1, 1950. According to the plaintiff, he was deprived of his
sight or vision rendering him permanently disabled because of the injuries he sustained; and that by
reason of the unjustified refusal by defendants of plaintiff's claim, the latter was deprived of his
disability pension. The Philippine Veterans Administration and the Chief of Staff of the Armed Forces
filed separate motions to dismiss the complaint on the grounds that the court has no jurisdiction over
the subject matter of the complaint. Acting on the said motion, the court, on March 2, 1962, rendered
an order dismissing the complaint on the ground that the action has prescribed. Motion for
reconsideration of the said order having been denied, the plaintiff has interposed this appeal.

Issue:
Whether or not the Court of First Instance had jurisdiction over the subject matter, it being a money
claim against the government.

Decision:
The court affirmed the lower courts decision on dismissing the complaint for the simple reason that the
Court of First Instance had no jurisdiction over the subject matter, it being a money claim against the
government. If there is a money claim against the government should be filed with the Auditor General.
Plus, under the doctrine of state immunity, the state cannot be sued without its consent.
















DALE SANDERS, AND A.S. MOREAU, JR,
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 162 SCRA 88

FACTS:
ROSSI AND WYER, BOTH AMERICAN CITIZENS LIVING AS PERMANENT CITIZENS IN THE PHILIPPINES,
WERE EMPLOYED IN NAVSTA. ON OCTOBER 3, 1975, THEY WERE INFORMED THAT THEIR EMPLOYMENT
STATUS HAD BEEN CHANGED FROM PERMANENT FULLTIME TO PERMANENT PART-TIME. UNHAPPY
WITH THE UNFORESEEN CHANGES, ROSSI AND WYER PROTESTED GRIEVANCES AGAINST THE
ADMINISTRATION IN THE U.S. DEPARTMENT OF DEFENSE. AS A RESULT, THE HEARING OFFICER , HON.
VERIDIANO II RECOMMENDED NAVSTA TO REINSTATE ROSSI AND WYER TO PERMANENT FULLTIME
PLUS BACKWAGES

ON THE OTHER HAND, DALE SANDERS, THE SPECIAL SERVICE DIRECTOR OF NAVSTA, REJECTED THE
RECOMMENDATION. INSTEAD, HE SENT LETTERS TO MOREAU, THE COMMANDING GENERAL OF U.S.
NAVAL STATION, STATING THAT A.) MANY SUPERVISORS WOULD CONSTANTLY COMPLAIN THE
DIFFICULTY ON SUPERVISING ROSSI AND WYER. B.) ROSSI WOULD EVEN TREAT HIS CO-EMPLOYEES AND
SUPERVISORS IN AN UNFRIENDLY MANNER. C.) MOREOVER, EVEN THOUGH THEY HAVE PLEDGED NOT
TO DISCUSS THIS CASE WITH ANYONE, THEY INSISTENTLY CONVERSE THE RECORD INTO PUBLIC
INTEREST. ON NOVEMBER 7, 1975, MOREAU DELIBERATELY SENT A LETTER TO HIS SUPERIOR
JUSTIFYING THE REASON BEHIND THE CHANGES OF THE SAID EMPLOYMENT STATUS.

BECAUSE OF THE INSULTING CLAUSE STATED IN THE TWO LETTERS, ROSSI AND WYER BECAME ANGUISH
TOWARDS SANDERS AND MOREAU. IN EFFECT, THEY FILED A COMPLAINT FOR DAMAGES AGAINST THE
HEREIN PETITIONERS. THE PLAINTIFF, ROSSI AND WYER, CLAIMED THAT THE STATEMENTS WRITTEN ON
THE LETTER WERE PURELY LIBELOUS, AND HAD EXCEEDED AGAINST THEIR PERSONAL AND
PROPRIETARY RIGHTS.

ISSUE: WHETHER OR NOT THE PETITIONERS WERE PERFORMING IN ACCORDANCE WITH THE SCOPE OF
THEIR AUTHORITY OR SIMPLY IN THEIR PRIVATE CAPACITIES?

HELD:
PETITION GRANTED. COURT RULED THAT HEREIN PETITIONERS ACTED WITHIN THE SCOPE OF THEIR
AUTHORITY AND REPRESENTED THE GOVERNMENT ON THEIR BEHALF THEREFORE, IT WAS THE
GOVERNMENT THAT SHOULD BE RESPONSIBLE FOR THEIR ACT, IN CASE DAMAGES WERE FOUND, THE
U.S. GOVERNMENT SHALL SERVE AS THE PRINCIPAL AND NOT THE HEREIN PETITIONERS THEMSELVES.

UNDER THE DOCTRINE OF SOVEREIGN EQUALITY, THE PHILIPPINE STATE SHALL ADAPT THE PRINCIPLE
OF INTERNATIONAL LAW AS PART OF THE LAND. SINCE THE U.S. GOVERNMENT HAS NOT GIVEN ITS
CONSENT TO PUNISH THE ACTS OF THE PETITIONER; PHILIPPINE GOVERNMENT WILL RESPECT THE
DECISION OF UNITED STATES ON NOT FILING LAWSUIT AGAINST SANDERS AND MOREAU ALSO.






CARMEN FESTEJO vs. ISAIAS FERNANDO
G.R. No. L-5156 March 11, 1954

FACTS
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 and caused an irrigation canal to be constructed on the portion of the three
parcels of land on to the damage and prejudice of the plaintiff.

ISSUE
Whether or not this is a suit against the state.

RULING
No, the evidence and conceded facts 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 and usefulness, he must be
held to have designedly departed from the duties imposed on him by law. Ordinarily the officer or
employee committing the tort is personally liable therefore, and may be sued as any other citizen and
held answerable for whatever injury or damage results from his tortuous act.

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.

ART. 32. Any public officer or employee, 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:
(6) The right against deprivation of property without due process of law;

















Amigable vs. Cuenca
G.R. No. L-26400 February 29, 1972

Facts:
This is an appeal from the decision of the Court of First Instance of Cebu with Civil Case No. R-5977,
dismissing the complaint of Victoria Amigable, the plaintiff-appellant.
Victoria Amigable is the registered owner of Lot No. 639 of the Banilad Estate in Cebu City as stated in
Transfer Certificate of Title No. T-18060. In this certificate, there was no annotation in favor of the
government saying that it has any right or interest in the property. However, the government used a
portion of the land, with an area of 6,167 square meters, for the construction of the Mango and
Gorordo Avenues without prior notice and consent of the owner. She filed a complaint in the court on
February 6, 1959 against the Republic of the Philippines and Nicolas Cuenca, the Commissioner of Public
Highways, for the recovery of the land appropriated by the government. She also asked for payment for
the damages done: P50,000.00 for illegal occupation of the land, P25,000.00 for moral damages, and
P5,000.00 for attorney's fee and the costs of the suit.
The defendants denied the allegations of the complaint with the following defenses: (1) the action was
precipitous because it must be filed first with the Office of the Auditor General; (2) right of action for the
recovery of the amount, if any, had already prescribed; (3) the suit has no valid basis because the
Government had not given its consent to be sued; and (4) it was the Province of Cebu that appropriated
the use of the land.
Nobody appeared for the defendants during the scheduled hearing. On July 29, 1959, the court
dismissed the case saying that it has "no jurisdiction over the plaintiff's cause of action for the recovery
of possession" for the following reasons: (1) the government cannot be sued without its consent and (2)
no original and appellate jurisdiction to hear, try and decide plaintiff's claim for compensatory damages
for P50,000.00, money claim against the government, and (3) claim for moral damages had long
prescribed. Hence, the plaintiff appealed to the Court of Appeals.

Issue:
Whether or not the appellant may properly sue the government under the facts of the case.

Held:
Yes, the appellant may properly sue the government under the facts of the case without violating the
doctrine of governmental immunity from suit without its consent. When the government takes away a
property from its owner for public use without any legal process or negotaiation, the owner may sue the
government (Ministerio vs. Court of First Instance of Cebu). Since there wasn't any annotation in favor
of the government found at the back of the Certificate of Title and she did not transfer any portion of
her property to the government, she still remains the registered owner of the whole lot. "As a 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.".

The decision appealed from is set aside and the case is remanded to the court to determine the
compensation, that includes the attorney's fee, that the appellant will receive.






Facts:
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.

Issue:

Whether or not the awarding of the contract to de Guzman was constitutional.

Held:

Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice, such
rule is inapplicable to cases in which the foreign government enters into private contracts with the
citizens of the court's jurisdiction. A contrary view would simply run against all principles of decency and
violative of all tenets of morals.

Moral principles and principles of justice are as valid and applicable as well with regard to private
individuals as with regard to governments either domestic or foreign. Once a foreign government enters
into a private contract with the private citizens of another country, such foreign government cannot
shield its non-performance or contravention of the terms of the contract under the cloak of non-
jurisdiction. To place such foreign government beyond the jurisdiction of the domestic courts is to give
approval to the execution of unilateral contracts, graphically described in Spanish as 'contratos
leoninos', because one party gets the lion's share to the detriment of the other. To give validity to such
contract is to sanctify bad faith, deceit, fraud. We prefer to adhere to the thesis that all parties in a
private contract, including governments and the most powerful of them, are amenable to law, and that
such contracts are enforceable through the help of the courts of justice with jurisdiction to take
cognizance of any violation of such contracts if the same had been entered into only by private
individuals.

PNB vs. PABALAN
G.R. No.
L-33112
June 15,
1978

Original Action in the Supreme Court. Certiorari & Mandamus w/ Preliminary
Injunction

FACTS:

Dec. 17, 1970 writ of execution was issued w/ a notice of garnishment for
the sum of P12,724.66. Said amount belongs to the Philippine Virginia Tobacco
Administration & deposited with PNB's La Union branch.

Execution of writ & garnishment was delayed since PNB objected to the
garnishment & questioned WON Phil. Virginia Tobacco Administration really had
funds deposited w/ PNB La Union.

Jan. 25, 1971 execution of writs & garnishment. It ordered that Philippine
Virginia Tobacco Administration Funds deposited w/ PNB shall be garnished &
delivered to plaintiff immediately to satisfy Writ of Execution for of the
amount awarded in the decision of Nov. 16, 1970.

PNB claims that since funds are public in character, a prohibition must be
issued against Pabalan's orders based on the doctrine of the non-suability of
the state.

ISSUE: Whether or not funds of public corporations w/c can sue & be sued are
exempt from garnishment.

HELD: No. Petition dismissed.

RATIO:

1.When the government enters into commercial business, it abandons its
sovereign capacity & is to be treated like any other corporation. (Bank of the
United States vs. Planters' Bank) 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
governing private corporations (Manila Hotelmployees Association vs. Manila
Hotel Company). Thus, the doctrine of non-suability cannot bar or impede a
notice of garnishment.

2.There was no grave abuse of discretion on the part of
the judge. Several cases have ruled that funds of government-owned entities are
not exempt from garnishment (PNB vs. CIR, National Shipyard & Steel Corporation
vs. CIR).
Municipality of San Miguel, Bulacan v. Fernandez
No. L-61744 June 25, 1984

FACTS:

In Civil Case No. 604-B, entitled "Margarita D. Vda. De Imperio, et al. v. Municipal Government of San
Miguel, Bulacan, et al." dated April 28, 1978, under presiding Judge Oscar C. Fernandez, rendered
judgement in favour of the plaintiffs and against the defendant Municipal Government of San Miguel,
Bulacan, represented by Mayor Mar Marcelo G. Aure and its Municipal Treasurer. The court ordered the
defendant municipality to pay the plaintiffs the sum of Php64,440.00 corresponding to the rentals
collected from the tenants from 1970 up to and including 1975 plus interest thereon at the legal rate
from January 1970 until fully paid. In addition to this, the defendant municipality must pay the plaintiffs
the sum of Php3,000.00 for attorney's fees and to pay the cost of suit. Thereafter, the private
respondents moved for issuance of the writ of execution for the satisfaction of the said judgement,
however, 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 was
then denied by the respondent judge in an order dated August 23, 1982 and the writ of execution still
stands in full force and effect.

ISSUE:

Whether or not the funds of the Municipality of San Miguel, Bulacan, in the possession 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 judgement in Civil Case No. 604-B.

HELD:

Yes, all the funds of the municipality in the possession of the Municipal Treasurer of San Miguel and of
Bulacan, are public funds which are exempt from execution as stated under Presidential Decree No. 477,
"The Decree on Local Fiscal Administration", Section 2, paragraph (a): No money shall be paid out of the
treasury except in pursuance of a lawful appropriation or other specific statutory authority.
Furthermore, there must be an ordinance duly passed by the Sangguniang Bayan containing the
corresponding appropriation for the funds before any money of the municipality may be paid out.

Unlike the State which has the immunity of not being sued without its consent, A municipal corporation
is an example of an incorporated agency which has a charter of its own that grants them the
competence to sue and be sued. However, municipal government is generally not liable for torts
committed during the discharge of its governmental functions. It can be held liable only if it has been
proven that they were acting in a proprietary function. Failing to do this, the claimant cannot recover.