Political Law Bar Exam Answers: State Immunity from Suit

State Immunity from Suit (1991)

No. 13; In February 1990, the Ministry of the Army. Republic of Indonesia, invited bids for the supply of 500,000 pairs of combat boots for the use of the Indonesian Army. The Marikina Shoe Corporation, a Philippine corporation, which has no branch office and no assets in Indonesia, submitted a bid to supply 500,000 pairs of combat boots at U.S. $30 per pair delivered in Jakarta on or before 30 October 1990. The contract was awarded by the Ministry of the Army to Marikina Shoe Corporation and was signed by the parties in Jakarta. Marikina Shoe Corporation was able to deliver only 200,000 pairs of combat boots in Jakarta by 30 October 1990 and it received payment for 100,000 pairs or a total of U.S. $3,000,000.00. The Ministry of the Army promised to pay for the other 100,000 pairs already delivered as soon as the remaining 300,000 pairs of combat boots are delivered, at which time the said 300,000 pairs will also be paid for. Marikina Shoe Corporation failed to deliver any more combat boots.

On 1 June 1991, the Republic of Indonesia filed an action before the Regional Trial Court of Pasig. Rizal, to compel Marikina Shoe Corporation to perform the balance of its obligations under the contract and for damages. In its Answer, Marikina Shoe Corporation sets up a counterclaim for U.S. $3,000,000.00 representing the payment for the 100,000 pairs of combat boots already delivered but unpaid. Indonesia moved to dismiss the counterclaim, asserting that it is entitled to sovereign Immunity from suit. The trial court denied the motion to dismiss and issued two writs of garnishment upon Indonesian Government funds deposited in the Philippine National Bank and Far East Bank. Indonesia went to the Court of Appeals on a petition for certiorari under Rule 65 of the Rules of Court.

How would the Court of Appeals decide the case?

SUGGESTED ANSWER:

The Court of Appeals should dismiss the petition insofar as it seeks to annul the order denying the motion of the Government of Indonesia to dismiss the counterclaim. The counterclaim in this case is a compulsory counterclaim since it arises from the same contract involved in the complaint. As such it must be set up otherwise it will be barred. Above all, as held in Froilan vs. Pan Oriental Shipping Co., 95 Phil. 905, by filing a complaint, the state of Indonesia waived its immunity from suit. It is not right that it can sue in the courts but it cannot be sued. The defendant therefore acquires the right to set up a compulsory counterclaim against it.

However, the Court of Appeals should grant the petition of the Indonesian government insofar as it sought to annul the garnishment of the funds of Indonesia which were deposited in the Philippine National Bank and Far East Bank.

Consent to the exercise of jurisdiction of a foreign court does not include waiver of the separate immunity from execution. (Brownlie, Principles of Public International Law, 4th ed., p. 344.) Thus, in Dexter vs. Carpenter vs. Kunglig Jarnvagsstyrelsen, 43 Fed 705, it was held the consent to be sued does not give consent to the attachment of the property of a sovereign government.

State Immunity from Suit (1996)

No. 6; The Republic of the Balau (formerly Palau Islands) opened and operated in Manila an office engaged in trading Balau products with Philippine products. In one transaction, the local buyer complained that the Balau goods delivered to him were substandard and he sued the Republic of Balau, before the Regional Trial Court of Pasig, for damages.

a) How can the Republic of Balau invoke its sovereign immunity? Explain.

b) Will such defense of sovereign immunity prosper? Explain.

SUGGESTED ANSWER:

A) The Republic of Balau can invoke its sovereign Immunity by filing a motion to dismiss in accordance with Section l(a), Rule 16 of the Rules of Court on the ground that the court has no jurisdiction over its person.

According to the Holy See vs. Rosario, 238 SCRA 524, in Public International Law, when a State wishes to plead sovereign immunity in a foreign court, it requests the Foreign Office of the State where it is being sued to convey to the court that it is entitled to immunity. In the Philippines, the practice is for the foreign government to first secure an executive endorsement of its claim of sovereign immunity. In some cases, the defense of sovereign immunity is submitted directly to the local court by the foreign government through counsel by filing a motion to dismiss on the ground that the court has no Jurisdiction over its person.

b) No, the defense of sovereign Immunity will not prosper. The sale of Balau products is a contract involving a commercial activity. In United States vs. Ruiz, 136SCRA487 and United States vs. Guinto, 182 SCRA 644, it was stated that a foreign State cannot invoke Immunity from suit if it enters into a commercial contract. The Philippines adheres to RESTRICTIVE SOVEREIGN IMMUNITY.

State Immunity from Suit (1989)

No. 13: A property owner filed an action directly in court against the Republic of the Philippines seeking payment for a parcel of land which the national government utilized for a road widening project.

(1) Can the government invoke the doctrine of non-suitability of the state?

(2) In connection with the preceding question, can the property owner garnish public funds to satisfy his claim for payment? Explain your answers.

SUGGESTED ANSWER:

(1) No, the government cannot invoke the doctrine of state of immunity from suit. As held in Ministerio vs. Court of First Instance of Cebu, 40 SCRA 464, when the government expropriates property for public use without paying just compensation, it cannot invoke its immunity from the suit. Otherwise, the right guaranteed in Section 9, Article III of the 1987 Constitution that private property shall not be taken for public use without just compensation will be rendered nugatory.

(2) No, the owner cannot garnish public funds to satisfy his claim for payment, Section 7 of Act No. 3083 prohibits execution upon any judgment against the government. As held in Republic vs. Palacio, 23 SCRA 899, even if the government may be sued, it does not follow that its properties may be seized under execution.

ALTERNATIVE ANSWER:

(2) No, funds of the government on deposit in the bank cannot be garnished for two reasons:

1. Under Art. II, Sec. 29 (1) public funds cannot be spent except in pursuance of an appropriation made by law, and

2. Essential public services will be impaired if funds of the government were subject to

execution, (Commissioner of Public Highways vs. San Diego, 31 SCRA 616 (1970)). The remedy of the prevailing party is to have the judgment credit in his favor included in the general appropriations law for the next year.

State Immunity from Suit (1994)

No. 6; Johnny was employed as a driver by the Municipality of Calumpit, Bulacan. While driving recklessly a municipal dump truck with its load of sand for the repair of municipal streets, Johnny hit a jeepney. Two passengers of the jeepney were killed.

The Sangguniang Bayan passed an ordinance appropriating P300,000 as compensation for the heirs of the victims.

1) Is the municipality liable for the negligence of Johnny?

2) Is the municipal ordinance valid?

SUGGESTED ANSWER:

1) Yes, the Municipality of Calumpit is liable for the negligence of its driver Johnny. Under Section 24 of the Local Government Code, local government units are not exempt from liability for death or injury to persons or damage to property.

ALTERNATIVE ANSWER:

No, the municipality is not liable for the negligence of Johnny, the prevailing rule in the law of municipal corporations is that a municipality is not liable for the torts committed by its regular employees in the discharge of governmental functions. The municipality is answerable only when it is acting in a proprietary capacity.

In the case at bar, Johnny was a regular employee of the Municipality of Calumpit as driver of its dump truck; he committed a tortious act while discharging a governmental function for the municipality, ie., driving recklessly the said truck loaded with sand for the repair of municipal streets. Undoubtedly then, Johnny as driver of the dump truck was performing a duty or task pertaining to his office. The construction or maintenance of public streets are admittedly governmental activities. At the time of the accident, Johnny was engaged in the discharge of governmental functions.

Hence, the death of the two passengers of the jeepney -tragic and deplorable though it may be imposed on the municipality no duty to pay monetary compensation, as held in Municipality of San. Fernando v. Firme, 195 SCRA 692.

State Immunity from Suit (1992)

No. 9: The Northern Luzon Irrigation Authority (NLIA) was established by a legislative charter to strengthen the irrigation systems that supply water to farms and commercial growers in the area. While the NLIA is able to generate revenues through its operations, it receives an annual appropriation from Congress. The NLIA is authorized to “exercise all the powers of a corporation under the Corporation Code.”

Due to a miscalculation by some of its employees, there was a massive irrigation overflow causing a flash flood in Barrio Zanjera. A child drowned in the incident and his parents now file suit against The NLIA for damages.

May the NLIA validly invoke the immunity of the State from suit? Discuss thoroughly.

SUGGESTED ANSWER:

No, the Northern Luzon Irrigation Authority may not invoke the immunity of the State from suit, because, as held in Fontanilla vs. Maliaman, 179 SCRA 685 and 194 SCRA 486, irrigation is a proprietary function. Besides, the Northern Luzon Irrigation Authority has a juridical personality separate and distinct from the government, a suit against it is not a suit against the State. Since the waiver of the immunity from suit is without qualification, as held in Rayo vs. Court of First Instance of Bulacan, 110 SCRA 456, the waiver includes an action based on a quasi-delict.

State Immunity from Suit (1999)

A. 1.) What do you understand by state immunity from suit? Explain. (2%)

2.) How may consent of the state to be sued be given? Explain. (2%)

SUGGESTED ANSWER:

1.) STATE IMMUNITY FROM SUIT means that the State cannot be sued without its consent. A corollary of such principle is that properties used by the State in the performance of its governmental functions cannot be subject to judicial execution.

2.) Consent of the State to be sued may be made expressly as in the case of a specific, express provision of law as waiver of State immunity from suit is not inferred lightly (e.g. C.A. 327 as amended by PD 1445} or impliedly as when the State engages in proprietary functions (U.S. v. Ruiz, U.S. v. Guinto) or when it files a suit in which case the adverse party may file a counterclaim (Froilan v. Pan Oriental Shipping) or when the doctrine would in effect be used to perpetuate an injustice (Amigable v. Cuenca, 43 SCRA 360).

State Immunity from Suit (1999)

No VI – B. The employees of the Philippine Tobacco Administration (PTA) sued to recover overtime pay. In resisting such claim, the PTA theorized that it is performing governmental functions. Decide and explain. (2%)

SUGGESTED ANSWER:

As held in Philippine Virginia Tobacco Administration v. Court of Industrial Relations, 65 SCRA 416, the Philippine Tobacco Administration is not liable for overtime pay, since it is performing governmental functions. Among its purposes are to promote the effective merchandising of tobacco so that those engaged in the tobacco industry will have economic security, to stabilize the price of tobacco, and to improve the living and economic conditions of those engaged in the tobacco industry.

State Immunity from Suit (1987)

(a) “X” filed a case against the Republic of the Philippines for damages caused his yacht, which was rammed by a navy vessel.

(b) “X” also sued in another case the Secretary of Public Works and the Republic of the Philippines for payment of the compensation of the value of his land, which was used as part of the tarmac of the Cebu International Airport, without prior expropriation proceedings.

The Solicitor General moved to dismiss the two cases invoking state immunity from suit Decide.

SUGGESTED ANSWER:

(a) The government cannot be sued for damages considering that the agency which caused the damages was the Philippine Navy. Under Art. 2180 of the Civil Code, the state consents to be sued for a quasi-delict only when the damage is caused by its special agents. Hence, the Solicitor General’s motion should be granted and the suit brought by “X” be dismissed.

(b) But the government CANNOT INVOKE the state’s immunity from suit. As held in Ministerio v. Court of First Instance. 40 SCRA 464 (1971), which also involved the taking of private property without the benefit of expropriation proceeding, “The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen. . . . When the government takes any property for public use, which is conditional upon the payment of just compensation, to be judicially ascertained, it makes manifest that it submits to the jurisdiction of the court.” The Solicitor General’s motion to dismiss should, therefore, be denied.

State Immunity vs. Waiver of Immunity (1997)

No, 6: It is said that “waiver of immunity by the State does not mean a concession of its liability”. What are the implications of this phrase?

SUGGESTED ANSWER:

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 it is liable. As stated in Philippine Rock Industries, Inc. vs. Board of Liquidators, 180 SCRA 171, 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.

State Immunity from Suit (1993)

No 19: Devi is the owner of a piece of land. Without prior expropriation or negotiated sale, the national government used a portion thereof for the widening of the national highway. Devi filed a money claim with the Commission on Audit which was denied. Left with no other recourse, Devi filed a complaint for recovery of property and/or damages against the Secretary of Public Works and Highways and the Republic of the Philippines, The defendant moved for dismissal of the complaint contending that the government cannot be sued without its consent. The RTC dismissed the complaint. On appeal, how would you decide the case.

SUGGESTED ANSWER:

The order dismissing the complaint should be reversed. In Ministerio v. Court of First Instance of Cebu, 40 SCRA 464, it was held that when the government takes property from a private landowner without prior expropriation or negotiated sale, the landowner may maintain a suit against the government without violating the doctrine of government Immunity from suit. The government should be deemed to have waived impliedly its immunity from suit. Otherwise, the constitutional guarantee that private property shall not be taken for public use without just compensation will be rendered nugatory.

From the ANSWERS TO BAR EXAMINATION QUESTIONS in POLITICAL LAW by the UP LAW COMPLEX and PHILIPPINE ASSOCIATION OF LAW SCHOOLS.