Kawananakoa v.
Polybank, 205 US 349
TOPIC: logical and practical: there can be no legal right as against the authority that
makes the law on which the right depends
FACTS:
Defendants, David Kawananakoa et al. executed a mortgage over a parcel of land in
favor of Ellen Polybank. The defendants pleaded to the jurisdiction that after the
mortgage was executed, they conveyed a portion of the mortgaged land to oneDamon,
who then conveyed it to the territory of Hawaii, where it is now part of a public street.
The plea was then overruled, and the court issued a foreclosure decree following an
answer and hearing. The decree of foreclose excepted from the sale and the land
conveyed to the territory and directed a judgement for the sum remaining due in case
the proceeds of the sale were insufficient to pay the debt of the defendants. The
defendants further claimed that the territory of Hawaii is liable to action in the same way
that a municipal corporation is, regardless of the permission granted by its statutes, and
compared it to the territory of the District of Columbia, which has been a party to
Supreme Court suits.
ISSUE:
Whether or not the Territory of Hawaii is required to be joined and subject to suit?
RULING:
No, it is true the territory could surrender its exemption, but in this case, it did not
acquiesce to the waiver of its sovereignty privilege.
A sovereign is exempt from suit not because of any formal conception or obsolete
theory, but on the logical and practical ground that there can be no legal right as against
the authority that makes the law on which the right depends, and as this doctrine is not
confined to full sovereign powers, it extends to those, such as the territories of the
United States, which in actual administration originate and change the law of contract
and property.
Hence, territory of the United States differs from the District of Columbia in that the
former is itself the fountain from which rights ordinarily flow, although Congress may
intervene, while, in the latter, the body of private rights is created and controlled by
Congress, and not by a legislature of the District.
Republic v. Sandoval,G.R. No. 84607, March 19, 1993
TOPIC: damage suit against the Republic of the Philippines itself (and police and
Marine officers involved in the Mendiola massacre): dismissed for lack of consent
FACTS:
Farmer-rallyists marched to Malacañang calling for a genuine land reform program.
There was a confrontation between the police and the farmer-rallyists which resulted in
the death of 12 rallyist and a number were wounded. President Aquino issued AO 11
creating the Citizens Mendiola Commission for the purpose of investigating the incident.
The most significant recommendation of the Commission was for the heirs of the
deceased and wounded victims to be compensated by the government. The victims of
the incident filed a petition for an action for damages against the state and the military
and police officers involved in the incident.
ISSUES:
Whether or not the State has waived its immunity to litigation and, as a result, be held
accountable for the incident.
RULING:
Negative, the Court held that there was no valid waiver of immunity as claimed by the
petitioners. The Commission's proposal that the deceased's heirs and victims be
compensated does not imply that the State bears any responsibility. AO 11 just
establishes the rationale for the Commission's existence, and whatever the
Commission's findings are, they only serve as the foundation for a cause of action if any
party decides to litigate the matter.
Thus, the recommendation of the Commission does not in any way bind the state. The
State cannot be held liable because the military and police officials were accused of
being responsible for the rallyist's death and injuries acted outside of their authority. It is
a well-established rule that the State, as a person, cannot do anything wrong. Because
they overstepped their authority, the military, and police officers responsible for the
crimes may be held personally liable for the damages.
CNMEG v. Sta. Maria, G.R. No. 185572, February 7, 2012
TOPIC: Restrictive theory of sovereign immunity: immunity does not apply to
commercial activities of foreign states; entering into a contract is not determinative, but
nature of the contract (whether governmental or proprietary) determines whether
sovereign immunity applies (Contract for the construction of the North Luzon Railway
System a proprietary activity; sovereign immunity from suits does not apply)
FACTS:
On 14 September 2002, petitioner China National Machinery & Equipment Corp.
(Group) (CNMEG), represented by its chairperson, Ren Hongbin, entered into a
Memorandum of Understanding with the North Luzon Railways Corporation (Northrail),
represented by its president, Jose L. Cortes, Jr. for the conduct of a feasibility study on
a possible railway line from Manila to San Fernando, La Union (the Northrail Project).
On 30 August 2003, the Export Import Bank of China (EXIM Bank) and the Department
of Finance of the Philippines (DOF) entered into a Memorandum of Understanding (Aug
30 MOU), wherein China agreed to extend Preferential Buyer’s Credit to the Philippine
government to finance the Northrail Project. The Chinese government designated EXIM
Bank as the lender, while the Philippine government named the DOF as the borrower.
Under the Aug 30 MOU, EXIM Bank agreed to extend an amount not exceeding USD
400,000,000 in favor of the DOF, payable in 20 years, with a 5-year grace period, and at
the rate of 3% per annum.
On 1 October 2003, the Chinese Ambassador to the Philippines, Wang Chungui (Amb.
Wang), wrote a letter to DOF Secretary Jose Isidro Camacho (Sec. Camacho) informing
him of CNMEG’s designation as the Prime Contractor for the Northrail Project.
On 30 December 2003, Northrail and CNMEG executed a Contract Agreement for the
construction of Section I, Phase I of the North Luzon Railway System from Caloocan to
Malolos on a turnkey basis (the Contract Agreement). The contract price for the
Northrail Project was pegged at USD 421,050,000.
On 26 February 2004, the Philippine government and EXIM Bank entered into a
counterpart financial agreement – Buyer Credit Loan Agreement No. BLA 04055 (the
Loan Agreement). In the Loan Agreement, EXIM Bank agreed to extend Preferential
Buyer’s Credit in the amount of USD 400,000,000 in favor of the Philippine government
in order to finance the construction of Phase I of the Northrail Project.
On 13 February 2006, respondents filed a Complaint for Annulment of Contract and
Injunction with Urgent Motion for Summary Hearing to Determine the Existence of Facts
and Circumstances Justifying the Issuance of Writs of Preliminary Prohibitory and
Mandatory Injunction and/or TRO against CNMEG, the Office of the Executive
Secretary, the DOF, the Department of Budget and Management, the National
Economic Development Authority and Northrail. RTC Br. 145 issued an Order dated 17
March 2006 setting the case for hearing on the issuance of injunctive reliefs. On 29
March 2006, CNMEG filed an Urgent Motion for Reconsideration of this Order. Before
RTC Br. 145 could rule thereon, CNMEG filed a Motion to Dismiss dated 12 April 2006,
arguing that the trial court did not have jurisdiction over (a) its person, as it was an
agent of the Chinese government, making it immune from suit, and (b) the subject
matter, as the Northrail Project was a product of an executive agreement.
On 15 May 2007, RTC Br. 145 issued an Omnibus Order denying CNMEG’s Motion to
Dismiss and setting the case for summary hearing to determine whether the injunctive
reliefs prayed for should be issued. CNMEG then filed a Motion for Reconsideration,
which was denied by the trial court in an Order dated 10 March 2008. Thus, CNMEG
filed before the CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or
Writ of Preliminary Injunction dated 4 April 2008.
In the assailed Decision dated 30 September 2008, the appellate court dismissed the
Petition for Certiorari. Subsequently, CNMEG filed a Motion for Reconsideration, which
was denied by the CA in a Resolution dated 5 December 2008.
ISSUE:
Whether petitioner is entitled to immunity from being sued before a local court.
RULING:
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.
In the case at bar, it is readily apparent that CNMEG cannot claim immunity from suit,
even if it contends that it performs governmental functions. Its designation as the
Primary Contractor does not automatically grant it immunity, just as the term
“implementing agency” has no precise definition for purposes of ascertaining whether
GTZ was immune from suit. Although CNMEG claims to be a government-owned
corporation, it failed to adduce evidence that it has not consented to be sued under
Chinese law. Thus, following this Court’s ruling in Deutsche Gesellschaft, in the
absence of evidence to the contrary, CNMEG is to be presumed to be a government-
owned and -controlled corporation without an original charter. As a result, it has the
capacity to sue and be sued under Section 36 of the Corporation Code.
Thus, petitioner is not entitled to immunity from suit, and the Contract Agreement is not
an executive agreement
Lim v. Brownell, G.R. No. L-8587, March 24, 1960 (Lim’s action for the
recovery of real property was an action against the U.S. government, which had
consented to such a suit under Section 3 of the Philippine Property Act of 1946 that the
U.S. Congress passed)
TOPIC: Waiver of Immunity/Consent to be Sued
A. Express consent
1. Medium
a. General law
FACTS:
The property in dispute consists of 4 parcels of land in Tondo, Manila. The lands were,
after the last world war, found by the Alien Property Custodian of the US to be
registered in the name of Asaichi Kagawa, a national of an enemy country, Japan. On
March 14, 1946 the Alien Property Custodian issued a vesting order on the authority of
the Trading with the Enemy Act of the United States, as amended, vesting in himself the
ownership over two of the said lots - Lots No. 1 and 2.On July 6, 1948, the Philippine
Alien Property Administrator under the authority of the same statute issued a
supplemental vesting order, vesting in himself the title to the remaining lots - Lots No. 3
and 4.On November 13, 1950 the claimant Benito E. Lim, as a administrator of the
intestate estate of Arsenia Enriquez, filed a complaint in the Court of First Instance of
Manila against the Philippine Alien Property Administrator for the recovery of the
property in question with back rents. The complaint was later amended to include
Asaichi Kagawa as defendan
ISSUE:
WON Brownell, Atty. Gen of the US can be sued?
RULING:
Yes, in fact it is evident that the court below erred in dismissing the complaint,
at least insofar as lots 3 and 4 of the land in dispute are concerned based on section 33
of the Trading with the Enemy Act. Congressional consent to such suit has
expressly been given by the United States. There is no denying that an action against
the Alien PropertyCustodian, or the Attorney General of the United States as his
successor, involving vested property under the Trading with the Enemy Act located in
the Philippines, is in substance an action against the United States. The immunity of
the state from suit, however, cannot be invoked where the action, as in the present
case, is instituted by a person who is neither an enemy nor an ally of an enemy for
the purpose of establishing his right, title or interest in vested property, and of
recovering his ownership and possession. Congressional consent to such suit has
expressly been given by the United States.The relief available to a person claiming
enemy property which has been vested by the Philippines Alien Property Custodian
is limited to those expressly provided for in the Trading with the Enemy Act, which does
not include a suit for damages for the use of such vested property.
Merritt v. Government of the Phil. Islands, supra (Government suable
because of the passage of Act No. 2457, but not liable because under Article 1903 (5)
of the Old Civil Code, the State is only liable for the acts of its special agents, and the
chauffeur of the ambulance of the General Hospital was not such an agent)
TOPIC: Suability vs. Liability
FACT:
Merritt, while riding his motorcycle, was hit by an ambulance owned by the Philippine
General Hospital. A driver employed by the hospital drove it. In order for Merritt to sue
the Philippine government, Act No. 2457 was enacted by the Philippine Legislature
authorizing Merritt to sue the Government of the Philippine Islands and authorizing the
Attorney-General of said Islands to appear in said suit. A suit was then filed before the
CFI of Manila, which fixed the responsibility for the collision solely on the ambulance
driver and determined the amount of damages to be awarded to Merritt. Both parties
appealed from the decision, plaintiff Merritt as to the amount of damages and defendant
in rendering the amount against the government.
ISSUE:
WON defendant, Government of the Philippines, waived its immunity from suit as well
as conceded its liability to the plaintiff when it enacted Act No. 2457.
RULING:
NO. By consenting to be sued, a state simply waives its immunity from suit. It does not
thereby concede its liability to the plaintiff, create any cause of action in his favor, or
extend its liability to any cause not previously recognized. It merely gives a remedy to
enforce a pre-existing liability and submit itself to the jurisdiction of the court, subject to
its right to interpose any lawful defense.
The Government of the Philippines Islands is only liable, for the acts of its agents,
officers and employees when they act as special agents. A special agent is one who
receives a definite and fixed order or commission, foreign to the exercise of the duties of
his office if he is a special official. The special agent acts in representation of the state
and being bound to act as an agent thereof, he executes the trust confided to him. This
concept does not apply to any executive agent who is an employee of the acting
administration and who on his own responsibility performs the functions which are
inherent in and naturally pertain to his office and which are regulated by law and the
regulations. The responsibility of the state is limited to that which it contracts through a
special agent, duly empowered by a definite order or commission to perform some act
or charged with some definite purpose which gives rise to the claim, and not where the
claim is based on acts or omissions imputable to a public official charged with some
administrative or technical office who can be held to the proper responsibility in the
manner laid down by the law of civil responsibility. The chauffeur of the ambulance of
the General Hospital was not such an agent.
