Political Law Part XIV: Article XVI – General Provisions



1.  Sections 1-12

Exec. Order No. 264

a.   Consent is either Express or Implied

b.   Express

1.   general law

aa.  C.A. 327

bb.  Act 3083, Sec. 1

cc.  Art. 2180 par. 6, New Civil Code (R.A. 386)

dd.  PD 1807, January 16, 1981

2.   Special law

Read:     MERRITT VS. GOVERNMENT, 34 Phil. 311

c.   Implied

1.   When the government institutes a suit;

State immunity from suit; when government officers initiate a suit against a private party, it descends to the level of a private individual susceptible to counterclaims


Garcia, J.

When the State through the Presidential Commission on Good Government (PCGG) filed a complaint against a private individual before the Sandiganbayan and thereafter, enters into a compromise agreement , it cannot later on invoke immunity from suit.

Where the State itself is no less than the plaintiff in the main case, immunity from suit cannot be invoked because when a state, through its duly authorized officers takes the initiative in a suit against a private party, it thereby descends to the level of a private individual and thus opens itself to whatever counterclaims or defenses the latter may have against it. When the State enters into contract, through its officers or agents, in furtherance of a legitimate aim or purpose and pursuant to a constitutional legislative authority, whereby mutual and reciprocal benefits accrue and rights and obligations arise therefrom, the State may be sued even without its express consent, precisely because by entering into a contract the sovereign descends to the level of the citizen. Its consent to be sued is implied from the very act of entering into such contract, breach of which on its part gives the corresponding right of the other party to the agreement.

2.   When the government engages in business or enters into a contract; and

3.   Read:

aa.  MINISTERIO VS. CFI of Cebu, 40 SCRA                bb.  U.S. VS. RUIZ, 136 SCRA

               cc.  TORIO VS. FONTANILLA, 85 SCRA 599

               dd.  COMMISSIONER VS. SAN DIEGO, 31 SCRA 616

   ee. USA vs. JUDGE QUINTO, et al., February 26, 1990 and the cases                         cited therein

              ff. Republic of the Philippines vs. Judge Sandoval, March 19, 1993

             gg. Wylie vs. Rarang, 209 SCRA 357

             hh. Veteans vs. CA, 214 SCRA 286

Immunity from suit; effect of a void contract with the government; unjust enrichment


Carpio-Morales, J.


The DOH entered into  three owner –consultant agreements with the private  respondents covering infrastructure projects for the Baguio General Hospital and Medical Center (BGHMC), the Batangas Regional Hospital and the Corazon L. Montelibano Memorial regional Hospital in Bacolod City.

The agreements for the three (3) projects are almost identical. This requires the private respondents to prepare: detailed architectural and engineering design plans; technical specifications and detailed estimates of cost of construction of the hospital, including the preparation of bid documents and requirements; and construction supervision until completion of hand-over and issuance of final certificate.

While the Agreements were witnessed by the respective Chief Accountants of the hospitals and were duly approved by the Department of Health, the former did not issue corresponding certificates of availability of funds to cover the professional or consultancy fees.

The DOH through is authorized representative, wrote separate letters to the respective chiefs of hospitals confirming the acceptance of private respondents’ complete Contract or Bid Documents for each project and RECOMMENDED THE PAYMENT OF 7.5% OF THE PROJECT ALLOCATION TO PRIVATE RESPONDENTS AS CONSULTANCY FEES.

During the construction of the projects, various deficiencies in the performance of the agreed scope of private respondents’ work were allegedly discovered which were not communicated to the private respondents. Due to such alleged deficiencies, petitioner withheld payment of the consultancy fees due to private respondent. Neither did petitioner return the documents, plans, specifications and estimates submitted by private respondents.

Considering the refusal of the DOH to pay said fees despite repeated demands, the private respondents submitted the dispute to the Construction Industry Arbitration Commission (CIAC).

After the presentation of evidence by both parties, the Arbitrator issued his decision dated March 30, 1999 sentencing the DOH to pay the private respondents to pay P3,492,713.00 for services performed and completed for and accepted by DOH. The said amount shall earn interest at 6% per annum from the date of the award until the decision becomes final. Thereafter, the principal and the interest accrued as of such time shall earn interest  at 12% per annum.

The DOH filed a Petition for Review under Rule 43 before the Court of Appeals but was dismissed for being filed out of time. As such, on motion of the private respondents, the Arbitrator issued a Writ of Execution .

I s s u e :

Whether or not the CIAC has jurisdiction to entertain the suit considering that the Agreements, being to promote the heath and well-being of the citizens, is in furtherance of  the state’s sovereign and governmental power and therefore, IMMUNE FROM SUIT.


In their Memorandum before the Supreme Court, the DOH, for the first time, raised the nullity of the three (3) agreements from the very beginning for failure to include therein a certification of availability of funds which is required under existing laws, particularly the Auditing Code of the Philippines, PD 1445.  As such, the fees of the private respondents shall not be based on the project fund allocation but on the basis of reasonable value or on the principle of quantum meruit.

While the agreement is indeed void ab initio for violation of existing laws, the DOH is liable to pay the private respondents  their consultancy services based on quantum merit to be determined by the Commission on Audit.

The invocation of immunity from suit is without merit. This is so because the government has already received and accepted the benefits rendered. To refuse payment as a result of the state’s immunity from suit would be to allow the government to unjustly enrich itself at the expense of another. (Citing Eslao vs. COA, 195 SCRA 730)

4.   Tests of Suability for incorporated government




5.   Tests of Suability for an unincorporated govt. agency government agency



               bb.  SANTIAGO VS. REPUBLIC, 87 SCRA 294

               cc.  PNB VS. PABALAN, 83 SCRA595

               dd.  REPUBLIC VS. PURISIMA, 78 SCRA 470

               ee.  MOBIL PHIL. VS. CUSTOMS ARRASTRE SERVICE, 185 SCRA 1120

               ff.  BUREAU OF PRINTING VS. BUREAU OF                     PRINTING EMPLOYEES  ASSOCIATION, 1                     SCRA 340

               hh.  METRAN VS. PAREDES, 79 Phil. 819

               ii.  SANTOS VS. SANTOS, 92 Phil. 281

               jj.  MALAYAN INSURANCE VS. SMITH BELL, Nov. 17, 1980

               kk.  SYQUIA VS. ALMEDA LOPEZ, 84 Phil. 31

               ll.  LIM VS. BROWNELL, JR., 107 Phil. 344

               mm.  CARABAO INC. VS. SPC, 35 SCRA 224

nn.        U.S.A. vs. RUIZ, 136 SCRA 487

LOIDA Q. SHAUF and JACOB SHAUF  vs. HON. COURT OF APPEALS, DON E. DETWILER and ANTHONY, G.R. No. 90314        November 27, 1990

Petitioner Loida Q. Shauf, a Filipino by origin and married to an American who is a member of the United States Air Force, applied for the vacant position of Guidance Counselor, GS 1710-9, in the Base Education Office at Clark Air Base, for which she is eminently qualified. As found by the trial court, she received a Master of Arts degree from the University of Sto. Tomas, Manila, in 1971 and has completed 34 semester hours in psychology-guidance and 25 quarter hours in human behavioral science; she has also completed all course work in human behavior and counseling psychology for a doctoral degree; she is a civil service eligible; and, more importantly, she had functioned as a Guidance Counselor at the Clark Air Base at the GS 1710-9 level for approximately four years at the time she applied for the same position in 1976.

Contrary to her expectations, petitioner Loida Q. Shauf was never appointed to the position occupied by Mrs. Abalateo whose appointment was extended indefinitely by private respondent Detwiler.

Feeling aggrieved by what she considered a shabby treatment accorded her, petitioner Loida Q. Shauf wrote the U.S. Civil Service Commission questioning the qualifications of Edward Isakson. Thereafter, said commission sent a communication addressed to private respondent Detwiler, 10 finding Edward Isakson not qualified to the position of Guidance Counselor, GS 1710-9, and requesting that action be taken to remove him from the position and that efforts be made to place him in a position for which he qualifies. Petitioner Loida Q. Shauf avers that said recommendation was ignored by private respondent Detwiler and that Isakson continued to occupy said position of guidance counselor.

Petitioner Loida Q. Shauf likewise wrote the Base Commander of Clark Air Base requesting a hearing on her complaint for discrimination. Consequently, a hearing was held on March 29, 1978 before the U.S. Department of Air Force in Clark Air Base.

Before the Department of Air Force could render a decision, petitioner Loida Q. Shauf filed a complaint for damages, dated April 27, 1978, against private respondents Don Detwiler and Anthony Persi before the Regional Trial Court, Branch LVI at Angeles City, docketed as Civil Case No. 2783, for the alleged discriminatory acts of herein private respondents in maliciously denying her application for the GS 1710-9 position.

Private respondents, as defendants in Civil Case No. 2783, filed a motion to dismiss on the ground that as officers of the United States Armed Forces performing official functions in accordance with the powers vested in them under the Philippine-American Military Bases Agreement, they are immune from suit. The motion to dismiss was denied by the trial court. A motion for reconsideration was likewise denied.

Petitioners aver that private respondents are being sued in their private capacity for discriminatory acts performed beyond their authority, hence the instant action is not a suit against the United States Government which would require its consent.

Private respondents, on the other hand, claim that in filing the case, petitioners sought a judicial review by a Philippine court of the official actuations of respondents as officials of a military unit of the U.S. Air Force stationed at Clark Air Base. The acts complained of were done by respondents while administering the civil service laws of the United States. The acts sued upon being a governmental activity of respondents, the complaint is barred by the immunity of the United States, as a foreign sovereign, from suit without its consent and by the immunity of the officials of the United States Armed Forces for acts committed in the performance of their official functions pursuant to the grant to the United States Armed Forces of rights, power and authority within the bases under the Military Bases Agreement. It is further contended that the rule allowing suits against public officers and employees for unauthorized acts, torts and criminal acts is a rule of domestic law, not of international law. It applies to cases involving the relations between private suitors and their government or state, not the relations between one government and another from which springs the doctrine of immunity of a foreign sovereign.

The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987 Constitution, is one of the generally accepted principles of international law that we have adopted as part of the law of our land under Article 11, Section 2. This latter provision merely reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and also intended to manifest our resolve to abide by the rules of the international community.

While the doctrine appears to prohibit only sects against the state without its consent, it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the suit must be regarded as against the state itself although it has not been formally impleaded.  It must be noted, however, that the rule is not so all-encompassing as to be applicable under all circumstances.

It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications, et al. vs. Aligaen etc., et al.  “Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that, while claiming to act for the State, he violates crime invades the personal and property rights of the plaintiff, under an unconstitutional act or under an assumption of authority which he does not have, is not a suit against the State within the constitutional provision that the State may not be sued without its consent.  The rationale for this ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an injustice.

They state that the doctrine of immunity from suit will not apply and may not be invoked where the public official is being sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the officers and agents of the government is removed the moment they are sued in their individual capacity. This situation usually arises where the public official acts without authority or in excess of the powers vested in him. It is a well-settled principle of law that a public official may be liable in his personal private capacity for whatever damage he may have caused by his act done with malice and in bad faith, or beyond the scope of his authority or jurisdiction.

The agents and officials of the United States armed forces stationed in Clark Air Base are no exception to this rule. In the case of United States of America, et al. vs. Guinto, etc., et al., ante  we declared:

It bears stressing at this point that the above observations do not confer on the United States of America blanket immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that they are also insulated from suit in this country merely because they have acted as agents of the United States in the discharge of their official functions.



Political Law Reviewer by Atty. Larry D. Gacayan

College of Law, University of the Cordilleras

Baguio City


About Magz

First of all, I am not a lawyer. I'm a graduate of AB Political Science and went to the College of Law but stopped going to law school for some reasons. I'm a passionate teacher who has been teaching English to speakers of other languages and a person who likes writing and blogging. I lost some important files and software when my computer broke down so the reason I created this website is to preserve the notes, reviewers and digests I collected when I was at the law school and at the same time, I want to help out law students who do not have enough time to go and read books in the library.

Posted on May 9, 2011, in Political Law and tagged . Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: