Module 2: State immunity

1. Legal Basis (Art. XVI Sec. 3)

Manifestation of Republicanism

Basis: There can be no legal right against the authority which makes the law on
which the right depends [Republic v. Villasor, 54 SCRA 83], However, it may be
sued if it gives consent, whether express or implied. The doctrine is also known as
the Royal Prerogative of Dishonesty. (Nachura, 2014)

It is based on the very essence of sovereignty. (Department of Agriculture v.

NLRC, G.R. No. 104269, November 11, 1993)

NOTE: There can be no legal right against the authority which makes the law on
which the right depends. (Republic v. Villasor, G.R. No. L-30671, November 8,
1973) However, it may be sued if it gives consent, whether express or implied.

2. Scope

a. Philippine Government
b. Unincorporated Agency
c. Incorporated Agency (look at the charter)
d. Local Government (not civilly liable for torts unless acting in proprietary
capacity)
e. Foreign states

Foreign States

This doctrine also applies to foreign governments because of the sovereign

equality of all the states. Accordingly, immunity is enjoyed by other States,
consonant with the public international law principle of par in parem non habet
imperium. The head of State, who is deemed the personification of the State, is
inviolable, and thus, enjoys immunity from suit. (JUSMAG Philippines v. NLRC,
G.R. No. 108813, December 15, 1994)

Remedy of a person who feels aggrieved by the acts of a foreign government

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. (Holy See v. Rosario, Jr., 238
SCRA 524, December 1, 1994)

3. When is a suit against a State (ibid)

a. When impleaded as a defendant

 b. When suit against an UNINCORPORATED agency
c. Judgment Financial liability or Requires Affirmative Act on the State
d. Public Officer when purpose is to hold State Ultimately Liable (even if Govt.
is not impleaded)
e. Special Agent Depends on whether acting within official function AND
WILL IT RESULT TO FINANCIAL LIABILITY
f. Unauthorized acts Not a suit against State. Ultra Vires.

PROFESSIONAL VIDEO V. TECHNICAL EDUCATION AND SKILLS

DEVELOPMENT AUTHORITY, G.R. NO. 155504, JUNE 26, 2009

TESDA is an instrumentality of the government undertaking

governmental functions. It is an unincorporated instrumentality of the
government, directly attached to the DOLE through the participation of the
Secretary of Labor as its Chairman, for the performance of governmental
functions i.e., the handling of formal and non-formal education and
training, and skills development. As an unincorporated instrumentality
operating under a specific charter, it is equipped with both express and
implied powers, and all State immunities fully apply to it.

TESDA, as an agency of the State, cannot be sued without its consent. The
PVC cards purchased by TESDA from PROVI are meant to properly
identify the trainees who passed TESDAs National Skills Certification
Program.

That TESDA sells the PVC cards to its trainees for a fee does not characterize the
transaction as industrial or business; the sale, expressly authorized by the TESDA
Act, cannot be considered separately from TESDAs general governmental
functions, as they are undertaken in the discharge of these functions.

DEUTSHE GESELLSCHAFT V. HON. COURT OF APPEALS, G.R. NO. 152318,

APRIL 16, 2009

The fact that GTZ entered into employment contracts with the private respondents
DID NOT DISQUALIFY it from invoking immunity from suit, as held in cases such
as Holy See v. Rosario, Jr., which set forth what remains valid doctrine: 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.

BUT IS GTZ, by conception, able to enjoy the Federal Republics immunity from
suit?
 It is necessary for us to understand what precisely are the parameters of the legal
personality of GTZ.

GTZ itself provides a more helpful clue, inadvertently, through its own official
Internet website. In the Corporate Profile section of the English language
version of its site, GTZ describes itself as follows The GTZ is a private
company owned by the Federal Republic of Germany.

It is entirely possible that under German law, an entity such as GTZ or

particularly GTZ itself has not been vested or has been specifically deprived
the power and capacity to sue and/or be sued. Yet in the proceedings below
and before this Court, GTZ has failed to establish that under German law, it
has not consented to be sued despite it being owned by the Federal Republic of
Germany. We adhere to the rule that in the absence of evidence to the
contrary, foreign laws on a particular subject are presumed to be the
same as those of the Philippines, and following the most intelligent
assumption we can gather, GTZ is akin to a governmental owned or
controlled corporation without original charter which, by virtue of the
Corporation Code, has expressly consented to be sued. At the very least,
like the Labor Arbiter and the Court of Appeals, this Court has no basis in fact
to conclude or presume that GTZ enjoys immunity from suit.

4. When suits against the State permissible (ibid)

CONSENT :

1. EXPRESS thru a LAW (law enacted strictissimi juris)

Law may be General Law (advance consent) or
Special Law (1) authorizing particular person (2) Charter of incorporated agency

2. IMPLIED
(a) When govt. sues (set for counterclaim) descending to level or ordinary
citizen)
(b) When engaged in commercial business or enters into contract

Capacities of the State in entering into contracts

In jure gestionis By right of economic or business relations; commercial, or

proprietary acts. MAY BE SUED. (US v. Guinto, G.R. No. 76607, February 26,
1990)

In jure imperii By right of sovereign power and in the exercise of sovereign

functions. No implied consent. (US v. Ruiz, No. L-35645, May 22, 1985) NOTE:
In exercising the power of eminent domain, the State exercises a power jus
 imperii, where property has been taken without just compensation being paid, the
defense of immunity from suit cannot be set up in an action for payment by the
owner. (Republic v. Sandiganbayan, G.R. No. 90478, November 21, 1991)

(c) Cannot perpetuate injustice

(d) Quantum meruit

5. Execution of judgment against the State (ibid)

Where the State gives it consent to be sued, it does not necessarily follow that it also
gives its consent to the execution of the judgment that may be rendered against it. In
order that the judgment can be enforced by execution, another waiver is
necessary. This rule which was laid down in Commissioner of Public Highways vs.
San Diego (31 SCRA 616 [1970].)

A judgment against the State, in a case where it consents to be sued, simply implies
that the Legislature will recognize the judgment as final and make provision for its
satisfaction. The State is at liberty to determine for itself whether to pay the judgment
or not. (Republic vs. Palacio, 23 SCRA 899 [1968])

Waiver of immunity by the State does not mean a concession of its liability

When the State gives its consent to be sued, all it does is to give the other party an
opportunity to show that the State is liable. Accordingly, the phrase that waiver of
immunity by the State does not mean a concession of liability means that by
consenting to be sued, the State does not necessarily admit that it is liable.

In such a case, the State is merely giving the plaintiff a chance to prove that the State
is liable but the State retains the right to raise all lawful defenses. (Philippine Rock
Industries, Inc. v. Board of Liquidators, G.R. No. 84992, December 15, 1989)

LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC. V. UNIVERSITY

OF THE PHILIPPINES, G.R. NO. 185918, APRIL 18, 2012

We agree with UP that there was no point for Lockheed in discussing the doctrine of
state immunity from suit as this was never an issue in this case. Clearly, UP
consented to be sued when it participated in the proceedings below. What UP
questions is the hasty garnishment of its funds in its PNB account.

This Court finds that the CA correctly applied the NEA case. Like NEA, UP is a
juridical personality separate and distinct from the government and has the capacity to
sue and be sued. Thus, also like NEA, it cannot evade execution, and its funds may
be subject to garnishment or levy. However, before execution may be had, a claim
for payment of the judgment award must first be filed with the COA.
 We cannot subscribe to Lockheeds argument that NEA is not similarly situated with
UP because the COAs jurisdiction over the latter is only on post-audit basis. A
reading of the pertinent Commonwealth Act provision clearly shows that it does not
make any distinction as to which of the government subdivisions, agencies and
instrumentalities, including government-owned or controlled corporations and their
subsidiaries whose debts should be filed before the COA.

As to the fait accompli argument of Lockheed, contrary to its claim that there is
nothing that can be done since the funds of UP had already been garnished, since the
garnishment was erroneously carried out and did not go through the proper procedure
(the filing of a claim with the COA), UP is entitled to reimbursement of the garnished
funds plus interest of 6% per annum, to be computed from the time of judicial
demand to be reckoned from the time UP filed a petition for certiorari before the CA
which occurred right after the withdrawal of the garnished funds from PNB.

AIR TRANSPORTATION OFFICE V. SPS. DAVID AND ELISEA RAMOS, G.R.

NO. 159402, FEBRUARY 23, 2011

The immunity of the State from suit, known also as the doctrine of sovereign
immunity or non-suability of the State. The immunity from suit is based on the
political truism that the State, as a sovereign, can do no wrong.
Should the doctrine of sovereignty immunity or non-suability of the State be extended
to the ATO?

The CA thereby correctly appreciated the juridical character of the ATO as an agency
of the Government not performing a purely governmental or sovereign function, but
was instead involved in the management and maintenance of the Loakan Airport, an
activity that was not the exclusive prerogative of the State in its sovereign capacity.
Hence, the ATO had no claim to the States immunity from suit. We uphold the CAs
aforequoted holding.

We further observe the doctrine of sovereign immunity cannot be successfully

invoked to defeat a valid claim for compensation arising from the taking without just
compensation and without the proper expropriation proceedings being first resorted to
of the plaintiffs property. The Supreme Court ruled that the doctrine of sovereign
immunity was not an instrument for perpetrating any injustice on a citizen. In
exercising the right of eminent domain, the Court explained, the State exercised its jus
imperii, as distinguished from its proprietary rights, or jus gestionis; yet, even in that
area, where private property had been taken in expropriation without just
compensation being paid, the defense of immunity from suit could not be set up by
the State against an action for payment by the owners.

Lastly, the issue of whether or not the ATO could be sued without the States consent
has been rendered moot by the passage of Republic Act No. 9497, otherwise known
 as the Civil Aviation Authority Act of 2008. Section 23 of R.A. No. 9497 enumerates
the corporate powers vested in the CAAP, including the power to sue and be sued, to
enter into contracts of every class, kind and description, to construct, acquire, own,
hold, operate, maintain, administer and lease personal and real properties, and to
settle, under such terms and conditions most advantageous to it, any claim by or
against it.

GREGORIO R. VIGILAR, SEC. OF DPWH, ET AL V. ARNULFO AQUINO, G.R.

NO. 180388, JANUARY 18, 2011

In ordering the payment of the obligation due respondent on a quantum meruit basis,
the Court of Appeals correctly relied on Royal Trust Corporation v. COA. All these
cases involved government projects undertaken in violation of the relevant laws, rules
and regulations covering public bidding, budget appropriations, and release of funds
for the projects. Consistently in these cases, this Court has held that the contracts
were void for failing to meet the requirements mandated by law; public interest and
equity, however, dictate that the contractor should be compensated for services
rendered and work done.

Neither can petitioners escape the obligation to compensate respondent for services
rendered and work done by invoking the states immunity from suit. This Court has
long established in Ministerio v. CFI of Cebu, and recently reiterated in Heirs of
Pidacan v. ATO, that the doctrine of governmental immunity from suit cannot serve
as an instrument for perpetrating an injustice to a citizen.

SHELL PHILIPPINES EXPLORATION V. FREN JALOS, ET AL., G.R. NO.

179918, SEPTEMBER 8, 2010

Shell is not an agent of the Republic of the Philippines. It is but a service contractor
for the exploration and development of one of the countrys natural gas reserves.
While the Republic appointed Shell as the exclusive party to conduct petroleum
operations in the Camago-Malampayo area under the States full control and
supervision, it does not follow that Shell has become the States agent within the
meaning of the law. An agent is a person who binds himself to render some service or
to do something in representation or on behalf of another, with the consent or
authority of the latter.

Consequently, Shell is not an agent of the Philippine government, but a provider of

services, technology and financing for the Malampaya Natural Gas Project. It is not
immune from suit and may be sued for claims even without the States consent.
Notably, the Philippine government itself recognized that Shell could be sued in
relation to the project. This is evident in the stipulations agreed upon by the parties
under Service Contract 38.
 Article II, paragraph 8, Annex B of Service Contract 38 states that legal expenses,
including judgments obtained against the Parties or any of them on account of the
Petroleum Operations, can be recovered by Shell as part of operating expenses to be
deducted from gross proceeds. Article II, paragraph 9B of the same document allows
a similar recovery for [a]ll actual expenditures incurred and paid by CONTRACTOR
[Shell] in settlement of any and all losses, claims, damages, judgments, and any other
expenses not covered by insurance, including legal services. This signifies that the
State itself acknowledged the suability of Shell. Since payment of claims and
damages pursuant to a judgment against Shell can be deducted from gross proceeds,
the State will not be required to perform any additional affirmative act to satisfy such
a judgment.

In sum, while the complaint in this case sufficiently alleges a cause of action, the
same must be filed with the PAB, which is the government agency tasked to
adjudicate pollution-related cases. Shell is not an agent of the State and may thus be
sued before that body for any damages caused by its operations. The parties may
appeal the PABs decision to the CA. But pending prior determination by the PAB,
courts cannot take cognizance of the complaint.

Rule on Public Officers:

By their acts without or in excess of jurisdiction: any injury caused by him is his
own personal liability and cannot be imputed to the State.

Instances when a public officer may be sued without the States consent :

1. To compel him to do an act required by law

2. To restrain him from enforcing an act claimed to be unconstitutional
3. To compel payment of damages from an already appropriated assurance fund or
to refund tax over-payments from a fund already available for the purpose
4. To secure a judgment that the officer impleaded may satisfy the judgment himself
without the State having to do a positive act to assist him
5. Where the government itself has violated its own laws because the doctrine of
State immunity cannot be used to perpetrate an injustice