Roldan vs. Philippine Veterans Board, et al.

A suit against a government agency that is not a juridical entity, where a judgment in favor of the plaintiff would result in a charge against or financial liability to the government, is in effect a suit against the State and cannot prosper without the State's consent. The Philippine Veterans Board, being a mere agency of the government created under Republic Act No. 65, possesses no juridical personality and is incapable of being sued for the recovery of back salaries, which only Congress can appropriate.

The Philippine Veterans Board was created under Section 7 of Republic Act No. 65, operating under the Department of National Defense, to carry into effect the purposes of said Act and to take charge of effectuating the duties assigned to it by law. The Board was composed of a chairman and four other members appointed by the President with the consent of the Commission on Appointment, from among veterans of the Philippine Army and of recognized or deserving guerrilla organizations, who were entitled to per diems of P15 each for every meeting actually attended. The salaries of the Board's employees were appropriated every year by law, and the Board had no power to provide for the payment of back wages, Congress being the only body that could make such appropriations.

Felipe M. Roldan was a first grade Civil Service eligible. On March 26, 1953, he was appointed clerk in the Philippine Veterans Board with compensation at the rate of P2,160 a year, and he entered upon the performance of his duties. Defendant Antonio F. Garcia, acting Administrative Officer of the Philippine Veterans Board of which he was a member and signing for the Chairman, in a letter dated March 10, 1954 addressed to Roldan, invited attention to the provision of section 2 of Act 2589 and the Cabinet Resolution dated December 23, 1946, reiterating its former policy against the reinstatement in the service of officers and employees of the Government who have retired under existing retirement Acts, and also to the provision of Sec. 6 of Republic Act 728, which states that "no person shall be appointed or reinstated in the service when he is already fifty seven years of age, etc." In view of the foregoing, and as Roldan was already fifty-seven (57) years of age on March 11, 1953, he was advised that his services in the Board would terminate effective at the close of business on March 25, 1954.

Roldan was separated from the service on March 25, 1954, and his place was given to Juan Domingo. Roldan initiated Quo Warranto proceedings against Domingo in Civil Case No. 25603 of the CFI of Manila. The trial court in said case decided in favor of Roldan, declaring his ouster to have been illegal, and ordered that Roldan be restored to said position, with costs against defendant. Said decision became final and was executed, resulting in the reinstatement of Roldan to his former position on September 24, 1955.

For the period of about 18 months that he was out of the service due to his separation therefrom on March 25, 1954, Roldan filed the present action against the Philippine Veterans Board and its five members to recover his back wages during said period plus moral damages in the amount of P5,000.00 including P600.00 for attorney's fees. The trial court dismissed the complaint on the ground that Republic Act No. 65 creating the Philippine Veterans Board made said Board a mere agency of the Government to carry out the purposes of said Act; that the salaries of the employees of said Board, like that of the plaintiff, were appropriated every year by law; that the salary corresponding to the position of Roldan for the period from March 26, 1954, when separated from the service, until September 24, 1955, when he was reinstated, had already been paid to Juan N. Domingo, the defendant over whom he won in the Quo Warranto Proceeding; and that neither the Philippine Veterans Board nor its members can provide for the payment of Roldan's back wages, having no power to do so under the law, Congress being the only body that can make the appropriation.

• Juridical Personality of the Board: Appellant contended that the Philippine Veterans Board is a juridical entity within the meaning of Article 44 of the Civil Code, which lists as juridical persons: (1) the State and its political subdivisions; (2) other corporations, institutions and entities for public interest or purpose, created by law, whose personality begins as soon as they have been constituted according to law; and (3) corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder, partner or member. Counsel for the appellant merely quoted the article without giving reasons why the Philippine Veterans Board is included in its provisions.

• Suit Against the State: The appellees, through the Acting Solicitor General, maintained that the action brought against the members of the Philippine Veterans Board, which was a mere agency of the government, was in effect a suit against the State and was done without its consent.
• Lack of Power to Pay Back Wages: The trial court found that neither the Philippine Veterans Board nor its members can provide for the payment of Roldan's back wages, having no power to do so under the law, Congress being the only body that can make the appropriation, and that the salary for the period in question had already been paid to Juan N. Domingo.

• State Immunity from Suit: Whether the suit against the Philippine Veterans Board and its members for recovery of back wages is in effect a suit against the State, which cannot prosper without the State's consent.
• Juridical Personality of the Board: Whether the Philippine Veterans Board is a juridical person within the meaning of Article 44 of the Civil Code, capable of suing and being sued.

• State Immunity from Suit: Yes. A suit against the Philippine Veterans Board for recovery of back salaries is in reality an action against the government itself, and it cannot prosper or be entertained by the Court except with the consent of the government.
• Juridical Personality of the Board: No. The Philippine Veterans Board, created under Section 7 of Republic Act No. 65 under the Department of National Defense, is a mere agency of the government, not a body corporate and politic in deed and in law, and is incapable of suing or being sued.

• State Immunity from Suit: The Court agreed with the trial court that the ruling in Metropolitan Transportation Service (Metran) vs. Paredes, 79 Phil., 819, is directly applicable. In that case, the Metran was created by an Executive Order shortly after liberation to provide transportation service for the government and its employees. The Court held that the Metran was a mere office or agency of the government, unincorporated and possessing no juridical personality under the law, incapable of suing or being sued, and that a claim against it would in effect be a suit against the government, which suit may not prosper without the government's consent. In the Metran case, the agency operated under the Bureau of Public Works; in the present case, the Philippine Veterans Board was created and functioned under the Department of National Defense. It is also a mere agency of the government, not a body corporate and politic in deed and in law, incapable of suing or being sued. Citing Syquia vs. Almeda Lopez, et al., 84 Phil., 312, the Court held that a suit against an officer of a government by a private citizen which would result in a charge against or financial liability to the government must be regarded as a suit against the government itself, and it cannot prosper or be entertained by the Court except with the consent of said government. A judgment in favor of Roldan for the payment of his back salaries for the period of 18 months when he was out of service cannot be a charge against the Philippine Veterans Board or against its members, because the board member acting as chairman in effecting the separation of Roldan from the service, assuming the same to be illegal, acted officially and in the name of the government. Naturally, any judgment in favor of Roldan would mean a charge to or a liability against the Philippine Government.

• Juridical Personality of the Board: The Court noted that counsel for the appellant merely quoted Article 44 of the Civil Code without giving reasons why the Philippine Veterans Board is included in its provisions. A juridical person is a "being of legal existence, susceptible of rights and obligations, or of being subject of juridical relations" (2 Sanchez Roman, p. 119, quoted in Padilla's Civil Code Annotated, Vol. 1, 94, 1956 ed.). It is clear that the Philippine Veterans Board, which was created under Section 7 of Republic Act No. 65 under the Department of National Defense to carry into effect the purpose of said act and to take charge of effectuating the duties assigned to it by law, which Board is composed of a chairman and four other members to be appointed by the President with the consent of the Commission on Appointment from among veterans of the Philippine Army and of recognized or deserving guerrilla organizations, which members are entitled to per diems of P15 each for every meeting actually attended, may not be considered a juridical person within the meaning of the law, capable of being sued, especially for the recovery of back salaries, which salaries are appropriated only by Congress.

• Doctrine of State Immunity from Suit — A suit against a government agency or officer which would result in a charge against or financial liability to the government must be regarded as a suit against the State itself, and it cannot prosper or be entertained by the Court except with the consent of the government. The Court applied this doctrine to bar the appellant's claim for back wages, since any judgment in his favor would constitute a charge against or liability of the Philippine Government, the Board having no power to appropriate funds for such payment.

• Test for Juridical Personality of Government Agencies — A juridical person is a "being of legal existence, susceptible of rights and obligations, or of being subject of juridical relations." A government agency that is not a body corporate and politic in deed and in law, and which merely carries into effect the purposes of the law that created it, is not a juridical person capable of suing or being sued. The Court applied this test to the Philippine Veterans Board, which was created under Section 7 of Republic Act No. 65 under the Department of National Defense, and found it to be a mere agency of the government, incapable of being sued for the recovery of back salaries.

• "A suit against an officer of a government by a private citizen which would result in a charge against or financial liability to the government must be regarded as a suit against the government itself, and it cannot prosper or be entertained by the Court except with the consent of said government." — This passage, quoting the ruling in Syquia vs. Almeda Lopez, states the controlling doctrine of state immunity from suit as applied to suits against government officers and agencies, and is the ratio decidendi of the case.

• "It is clear that the Philippine Veterans Board which was created under Section 7 of Republic Act no. 65 under the Department of National Defense to carry into effect the purpose of said act and to take charge of effectuating the duties assigned to it by law, which Board is composed of a chairman and four other members to be appointed by the President with the consent of the Commission on Appointment from among veterans of the Philippine Army and of recognized or deserving guerrilla organizations, which members are entitled to per diems of P15 each for every meeting actually attended, may not considered a juridical person within the meaning of the law, capable of being sued, especially for the recovery of back salaries, which salaries are appropriated only by Congress." — This passage defines the Court's application of the test for juridical personality to the Philippine Veterans Board, establishing that the Board is not a juridical person capable of being sued.

• "In the present case, a judgment in favor of Roldan for the payment of his back salaries for the period of 18 months when he was out of service cannot be a charge against the Philippine Veterans Board or against its members for the reason that the board member acting as chairman in affecting the separation of Roldan from the service, assuming the same to be illegal, acted officially and in the name of the government. Naturally, any judgment in favor of Roldan would mean a charge to or a liability against the Philippine Government." — This passage explains why the suit is deemed a suit against the State: the officer acted officially and in the name of the government, and any judgment would result in a financial liability against the government.

• Metropolitan Transportation Service (Metran) vs. Paredes, 79 Phil., 819 — Controlling precedent, directly applicable. The Court held that the Metran, a mere office or agency of the government, unincorporated and possessing no juridical personality under the law, was incapable of suing or being sued, and that a claim against it would in effect be a suit against the government, which may not prosper without the government's consent. The Court found the Philippine Veterans Board analogous to the Metran.

• Syquia vs. Almeda Lopez, et al., 84 Phil., 312; 47 Off. Gaz., 665 — Followed. The Court cited this case for the doctrine that a suit against an officer of a government by a private citizen which would result in a charge against or financial liability to the government must be regarded as a suit against the government itself, and cannot prosper without the government's consent.

• Article 44, Civil Code — Lists the juridical persons recognized by law: (1) the State and its political subdivisions; (2) other corporations, institutions and entities for public interest or purpose, created by law, whose personality begins as soon as they have been constituted according to law; and (3) corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder, partner or member. The Court held that the Philippine Veterans Board does not fall within these provisions, as it is a mere agency of the government, not a juridical person capable of being sued.

• Section 7, Republic Act No. 65 — Created the Philippine Veterans Board under the Department of National Defense to carry into effect the purpose of said Act and to take charge of effectuating the duties assigned to it by law. The Court relied on this provision to establish that the Board is a mere agency of the government, not a body corporate and politic.

• Section 2, Act 2589 — Cited in the letter of defendant Antonio F. Garcia to Roldan, along with the Cabinet Resolution dated December 23, 1946, reiterating the policy against the reinstatement in the service of officers and employees of the Government who have retired under existing retirement Acts. This was the basis for Roldan's separation from service.

• Section 6, Republic Act 728 — Cited in the letter of defendant Antonio F. Garcia to Roldan, providing that "no person shall be appointed or reinstated in the service when he is already fifty seven years of age, etc." This was the basis for Roldan's separation from service, as he was already fifty-seven years of age on March 11, 1953.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Concepcion, Endencia, and Barrera, JJ., concurred.