10. Kawananokoa v. Polyblank, 205 U.S.

349 (1907)
1. Defendants, David Kawananakoa et al. executed a mortgage over a parcel of land in
favor of Ellen Polybank.
2. The defendants (now appellants) pleaded to the jurisdiction that after the execution of
the mortgage, a part of the mortgaged land had been conveyed by them to one
Damon, and by Damon to the territory of Hawaii, and was now part of a public street.
3. The plea was then overruled and after answer and hearing, the decree of
foreclosure was made by the.
4. The decree of foreclose excepted from the sale the land conveyed to the territory,
and directed a judgment for the sum remaining due in case the proceeds of the sale
were insufficient to pay the debt of the defendants, as provided Under Equity Rule 92.
5. The defendants-appellants contend that the owners of the equity of redemption in all
parts of the mortgage land must be joined, and that no deficiency judgment should be
entered until all the mortgaged premises have been sold.
6. Defendants-appellants also contend that the territory of Hawaii is liable to suit like a
municipal corporation, irrespective of the permission given by its statutes and
compare it to territory of the District of Columbia that has been a party to suits before
the Supreme Court.
Issue: Whether the Territory of Hawaii must be joined and is liable to suit?
Held: No. It is true that the territory could waive its exemption, but in the case at bar it
did not gave its consent to waive its privilege of sovereignty.
The Supreme Court averred that a sovereign is exempt from suit on the logical ground
that there can be no legal right as against the authority that makes the law on which the
right depends.
Hawaii, being a territory of the United States differs from the District of Columbia in that
the former is itself the fountain from which rights ordinarily flow while, in the latter, the
body of private rights is created and controlled by Congress, and not by a legislature of
the District.
Decree Affirmed.

11. Garcia v 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 [ 16 SCRA 120]
1. Plaintiff Mariano Garcia filed with the CFI of Pangasinan, an action to collect a sum of
money against Chief of Staff et al.
2. In his complaint, Mariano alleged that he:
a. suffered injuries while undergoing a 10-month military training.
b. filed a claim under Commonwealth Act 400 but the Adjutant Generals Office
disallowed his claim for disability benefit alleging that the CA 400 had already
been repealed by RA 610.
c. that his injuries deprived him of his sight rendering him permanently disabled;
d. and by the reason of unjustified refusal of the defendants on the claim, he was
deprived of his disability pension and suffered moral damages and attorneys
fees.
3. The Philippine Veterans Administration and the Chief of Staff file motions to dismiss
the complaint on the grounds that:
a. the court has no jurisdiction over the subject matter of the complaint;
b. that the plaintiff failed to exhaust all administrative remedies
c. that the complaint states no cause of action and is barred by the statute of
limitations.
4. The CFI dismissed the complaint on the ground that action has prescribed. Mariano
filed a MR but the same was denied. Hence, this petition.
Issue: Whether or not the lower court is right in dismissing the complaint.
Held: Yes. The SC uphold the order of dismissal for the simple reason that the Court of
First Instance has no jurisdiction over the subject matter, it being a money claim against
the government. This was held in New Manila Lumber vs. Republic that a claim for the
recovery of money against the government should be filed with the Auditor General, in
line with the principle that the State cannot be sued without its consent.
The Supreme Court also cited CA 327:
Section 1. In all cases involving the settlement of accounts or claims, other than those of
accountable officers, the Auditor General shall act and decide the same within 60 days,
.
Section 2. The party aggrieved by the final decision of the Auditor General in the
settlement of an account or claim, may within 30 days from receipt of decision, take an
appeal in writing to (c) the Supreme Court, if the appellant is a private person or entity.

The well-established rule that no recourse to court can be had until all administrative
remedies had been exhausted and that actions against administrative officers should not
be entertained if superior administrative officer could grant relief is applicable to this
case.

12. Holy See vs Judge Rosario and Starbright Sales Enterprises 238 SCRA 524
1. The petition arose from a controversy over Lot 5-A located in Paranaque and
registered under the name Holy See.
2. Lot 5-A was contiguous (adjoining) to Lot 5-B and 5-D which are registered under the
name of Philippine Realty Corporation (PRC).
3. The three lots mentioned were sold to Ramon Licup through Msgr. Cirilos.
Ramon Licup assigned his rights to respondent Starbright Inc.

Later,

4. When the squatters refuse to vacate the lots, a dispute arose between the two parties
because both were unsure whose responsibility was it to evict the squatters from said
lots. The relationship of the parties was further complicated of the sale of Lot 5-A by
petitioner Holy See to Tropicana Corporation.
5. Subsequently, Starbright filed a suit for annulment of the sale, specific performance
and damages against the petitioner, represented by Papal Nuncio, Msgr. Cirilios, PRC
as well as Tropicana Properties.
6. Then, petitioner Holy See and Msgr. Cirilos moved to dismiss the petition for lack of
jurisdiction based on sovereign immunity from suit.
7. The RTC denied the motion on ground that petitioner already "shed off" its sovereign
immunity by entering into a business contract. The subsequent Motion for
Reconsideration was also denied hence this petition for certiorari was forwarded to
the Supreme Court.
ISSUE: Whether or not Holy See can invoke sovereign immunity.
HELD: Yes. The Court held that Holy See may properly invoke sovereign immunity for its
non-suability. As expressed in Sec. 2 Art II of the 1987 Constitution, generally accepted
principles of International Law are adopted by our Courts and thus shall form part of the
laws of the land.
It was also noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic Relations
that diplomatic envoy shall be granted immunity from civil and administrative jurisdiction
of the receiving state over any real action relating to private immovable property. The
Department of Foreign Affairs (DFA) certified that the Embassy of the Holy See is a duly
accredited diplomatic missionary to the Republic of the Philippines and is thus exempted
from local jurisdiction and is entitled to the immunity rights.

Furthermore, the Holy Sees acquisition and subsequent disposal of the lot cannot be
categorized as an act jure gestionis because it was not made for profit but claimed that
the property is acquired for the site of its mission in the Philippines. The Holy See is
immune from suit because the act of selling the lot of concern is non-propriety in nature.
Lot 5-A lot was acquired through a donation from the Archdiocese of Manila, not for a
commercial purpose, but for the use of the Holy See to construct the official place of
residence of the Papal Nuncio thereof.

13. USA, Capt. Galloway et al. vs Judge Ruiz Court of First Instance of Rizal
and Eligio De Guzman & Co
1. USA had a naval base in Subic, Zambales. The base was one of those provided in the
Military Bases Agreement between the Philippines and the US.
2. USA made an invitation for the submission of bids for the repair of wharves in the said
base.
3. Eligio de Guzman & Co. (company) responded to the invitation, submitted bids and
complied with the requests based on the letters rceived from the US. Subsequent
thereto, the company received from the US telegrams requesting the company to
confirm its price to which the company complied.
4. Afterwards, a letter was received by the company indicating that the company did not
qualify to receive an award for the projects because of its previous unsatisfactory
performance on a repair contract for a sea wall and that the project had been awarded to
a third party.
5. Because of the company sued the USA and the officers of its navy. The complaint is to
order the USA to allow the company to perform the work on the projects and if the
specific performance was no longer possible, to order the defendants to pay damages.
[Additional: The company also asked for the issuance of a writ of preliminary injunction
to restrain the defendants from entering into contracts with third parties on the projects.]
6. Capt. Galloway and the others 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 as agents of the USA averring that 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.
7. Subsequently the defendants filed a motion to dismiss.
8. The trial court denied the motion. The defendants moved twice to reconsider but was
likewise denied by the trial court. Hence, this petition.
Issues: WON the USA can invoke state immunity.

Held: YES. The traditional role of the state immunity exempts a state from being sued in
the courts of another state without its consent.
It has been necessary to distinguish between sovereign and governmental acts and
private, commercial and proprietary acts. State immunity extends only to sovereign and
governmental acts. A state may be descended to the level of an individual and give its
consent to be sued only when it enters into business contracts. It does not apply where
the contracts relates the exercise of its sovereign function.
In this case, the projects are integral part of the naval base which is devoted to the
defense of both US and the Philippines and they are not utilized for, nor dedicated
to commercial or business purposes.

14. United States of America vs. Guinto 182 SCRA 644 [US vs Rodrigo, US vs
Ceballos, US vs Vergara]
1. These cases have been consolidated because they all involve the doctrine of state
immunity.
2. In USA vs Judge Guinto, private respondents (Valencia et al.) are suing several officers
of the US Air Force in connection with the bidding conducted by them for barbering
services in the said base.
3. In US vs Judge Rodrigo, private respondent (Genove) filed a complaint for damages
against US officers for his dismissal as cook in the US Air Force Recreation Center
because it was alleged that Genove had poured urine into the soup stock used for
cooking.
4. In US vs Judge Ceballos, private respondent (Bautista) was dismissed from his
employment as a barracks boy in Clark Air Base. Bautista filed a complaint against
the officers who was arrested him for violation of R.A. 6425, otherwise known as the
Dangerous Drugs Act, which was the cause of his dismissal.
5. In US vs Judge Vergara, a complaint for damages was filed by private respondents
(Sanchez et al.) against the US officers for injuries sustained by them as a result of
the acts of the US officers. There is a conflict of factual allegations here.
ISSUE: Whether the petitioners were also immune from suit under the RP-US Bases
Treaty for acts done by them in the performance of their official duties.
HELD:
USA v. Guinto. No. The Supreme Court ruled that the barbershop concessions granted by
the USA are commercial enterprises operated by private persons and are not agencies of

the USA. Thus, the petitioners cannot plead any immunity from the complaint filed by the
private respondents. Petition dismissed.
USA v. Rodrigo. No. The restaurant services offered at the Air Base is of the nature of a
business enterprise undertaken by the US government in its proprietary capacity. Thus,
the petitioners cannot invoke the doctrine of state immunity. But still, the Court
dismissed the complaint against the petitioners because after thorough investigation, it
was established beyond doubt that Genove had in fact polluted the soup stock with
urine. Petition Granted.
USA v. Ceballos. Yes. The court found that the petitioners were only exercising their
official functions when they conducted the buy-bust operation. It follows that for
discharging their duties as agents of the United States, they cannot be directly
impleaded for such acts because US did not give its consent to be sued. Petition
Granted.
USA v. Vergara. The Supreme Court found the factual allegations in this case
contradictory and ordered the respondent court to proceed with the hearing and decision
of the case. The SC said that the application of the doctrine of state immunity will only
be concluded after the determination of the capacity of the petitioners when such acts
were made. Petition dismissed.

15. Torio vs. Fontanilla 85 SCRA 399

1. The Municipal Council of Malasiqui, Pangasinan passed Resolution No. 156 whereby it
resolved to manage the 1959 Malasiqui town fiesta celebration on.
2. It also passed another resolution creating the town fiesta committee.
3. Then, the council appropriated the amount of P100 for the construction of 2 wooden
stages, one for the "zarzuela" and another for the cancionan.
4. On the day of the fiesta celebration, the performance group arrived in town. One of
the members of the group is Vincent Fontanilla.
5. The program started in the evening and the zarzuela then begun. While the zarzuela
was being held, the stage collapsed. Vicente Fontanilla was pinned underneath and
later.
6. Subsequently, Fontanillas heirs filed a complaint for damages with the CFI of Manila
against the municipality, the municipal council and the municipal council members.
7. In its Answer, defendant municipality argued that as a legally and duly organized
public corporation, it was exercising its governmental function when it held the town
fiesta from which no liability can arise to answer for the negligence of any of its
agents. The defendant councilors, maintained that they merely acted as agents of
the municipality and that exercised due diligence in implementing the municipal
ordinance.

8. CFI held that the municipal council exercised due diligence in selecting the person to
construct the stage and dismissed the complaint.
9. On appeal, CA reversed the decision and held all defendants solidarily liable for
damages. Hence, this petition.
Issue: Whether the celebration of the town fiesta is in the exercise of a municipality's
governmental or public function.
Held: No. Under Philippine laws, the powers of a municipality are two-fold in character:
governmental on the one hand; and corporate, private, or proprietary on the other.
Governmental powers are those exercised by the corporation in administering the
powers of the state and promote public welfare. On the other hand, Municipal powers,
are exercised for the special benefit and of the community which include private and
corporate.
If the injury is caused in the course of the performance of a governmental function, no
recovery can be had from the municipality unless there is an existing statute on the
matter, nor from its officers, so long as they performed in good faith. With respect to
proprietary functions, a municipal corporation can be held liable to third persons ex
contract or ex delicto.
In the case at bar, the SC held that the holding of a town fiesta is in essence an act for
the special benefit of the community and not for the general welfare of the public.
Therefore, petitioner-municipality can be held liable under the Doctrine of Respondent
Superior for the death of Fontanilla because the accident was attributable to the
negligence of the municipality's officers or agents as it was found that the stage was not
strong enough and their failure to take the necessary steps to maintain the safety of the
stage.

Respondent superior (The common-law doctrine to determine the legal liability of an

employer for the actions of an employee.

16. MERITT vs. Government of the Philippine Islands 34 Phil 311

1.

Merritt was riding his motorcycle along Padre Faura, when he was bumped by a
government ambulance which turned suddenly without having sounded or horn.

2. Merrit was severely injured and was hospitalized.

His injuries was beyond
rehabilitation. As a constructor, he could no longer climb up ladders and scaffoldings.
He could no longer perform his job the way he used to and earn as much as he used
to.
3. Subsequently, Act No. 2457 was enacted authorizing Merrit bring suit against the
Government of the Philippines and authorizing the Attorney-General of said Islands to
appear in said suit
4. After trial, the lower court held that the collision was due to the negligence of the
driver of the ambulance. It then determined the amount of damages and ordered the
government to pay the same. The lower court then determined the amount of
damages and ordered the government to pay the same.

5. On appeal, the defendant said that the trial court erred in holding the Government
liable for the damages sustained by the plaintiff.
ISSUE: Whether the defendant, in enacting Act No. 2457, concede its liability to the
plaintiff?
RULING: No. When the government consented to be sued, it simply waived its immunity
from suit. It did not thereby concede its liability to plaintiff.
Under paragraph 5 of Article 1903 of the Civil Code and jurisprudence, the state can be
made liable when it acts through a special agent, but not when the damage should have
been caused by the official in the discharge of the functions pertaining to their office.
According to SC, A special agent is one who is duly empowered by a definite order or
commission to perform some act or charged with some definite purpose. On the other
hand, a public official is charged with some administrative or technical office.
In the case at bar, the SC held that the ambulance driver was not an agent being an
employee of the government and who on his own responsibility performs the functions
which are inherent to his office. Hence, there can be no liability from the government.
Decision or Trial Court Reversed.

17. Froilan vs. Pan Oriental Shipping Co.

1. Froilan filed a complaint against Pan Oriental Shipping Co., alleging that he purchased
from the Shipping Commission the vessel FS-197 for P200K paying P50K down and
agreeing to pay the balance in instalments.
2. To secure the payment of the balance of the purchase price, he executed a chattel
mortgage of said vessel in favor of the Shipping Commission.
3. For various reasons, among them the non-payment of the installments, the Shipping
Commission tookpossession of said vessel and considered the contract of sale
cancelled.
4. The Shipping Commission chartered and delivered said vessel to Pan Oriental subject
to the approval of the President of the Philippines.

5. Froilan appealed the action of the Shipping Commission to the President of the
Philippines and in its meeting, the Cabinet restored him to all his rights under his
original contract with the Shipping Commission.
6. Froilan repeatedly demanded from the Pan Oriental Shipping Co. the possession of the
vessel but the latter refused to do so.
7. Froilan, filed an action in the CFI of Manila, to recover possession thereof an+ have
him +eclare+ the rightful owner of said property. Subsequently, the lower court
issued the writ of replevin and Pan Oriental was divested of its possession of the
vessel.
8. Pan Oriental protested to this restoration of Plaintiff s rights under the contract of
sale, allegeing that the action of the Cabinet restoring Froilan to his rights under his
original contract was null and void; and that Froilan had not complied with the
conditions precedent imposed by the Cabinet for the restoration of his rights under
the original contract.
9. Subsequenlty, the Philippine Government, filed a complaint in intervention alleging
that Froilan had failed to pay to the Shipping Commission the balance due on the
purchase price of the vessel; the Government also alleged that it was entitled to the
possession of the said vessel.
10. Then, Pan Oriental Shipping Co. filed an answer to the complaint in intervention
alleging that the Government of the Republic of the Philippines was obligated to
deliver the vessel to it.
11. Government of the Republic of the Philippines filed a motion to dismiss the
counterclaim of the Pan Oriental Shipping Co. alleging that the said counterclaim was
barred by prior judgment and stated no cause of action. It was also alleged that
movant was not subject to the jurisdiction of the court in connection with the
counterclaim.
12. The lower court dismissed the counterclaim of the Pan Oriental Shipping Co. as
prayed for by the Republic of the Philippines. Hence, Pan Oriental appealed the
decision of the lower court.
Issue: Whether or not the Republic of the Philippines is immune from suit.
Ruling: No. The moment the government filed its complaint in intervention, it waived its
right of non-suability.
The immunity of the state from suits does not deprive it of the right to sue private
parties in its own courts. The state as plaintiff may avail itself of the different forms of
actions open to private litigants. In short, by taking the initiative in an action against a
private party, the state surrenders its privileged position and comes down to the level of
the defendant. The defendant automatically acquires, within certain limits, the right to
set up whatever claims and other defenses he might have against the state.