United States of America vs, Hon

Case for State Immunity

United States of America vs. Hon. Ruiz [date of SC decision]

136 SCRA 487

FACTS

BACKGROUNDER. The United States of America had a naval base in Subic, Zambales which was provided in the Military Bases Agreement between the Philippines and the United States.

Sometime in May 1972, the US opened the submission of bids for the following projects:

Repair offender system [what is this?]

Repair typhoon damage to certain parts of the base

Eligio de Guzman & Co., Inc. submitted bids. Subsequent thereto, the company received two telegrams from the US requesting it to confirm its price proposals and the name of its bonding company. The company in turn complied with such request.

In June 1972, the company received a letter signed by William Collins (director, contracts Division, Naval Facilities engineering Command, Southwest Pacific, Dept. of the Navy of the US) that says that the company did not qualify to receive an award for the projects due to its previous unsatisfactory performance on a repair contract for the sea wall at the boat landings of the US Naval Station in Subic Bay.

That the projects have been awarded to third parties [the present projects being bidded?]

Company [Eligio de Guzmans?] then sued the USA and the members of the Engineering Command of the US Navy.

Complaint is to order the said company to perform the works on the projects and the event that specific performance was no longer possible, to order the defendants to pay damages. [I do not understand what you mean: the company wants the US to hire them for this project?]

The company also seek for the issuance of a writ of preliminary injunction to retrain [to train them again?] the defendants from entering into contracts with third parties.

The defendants 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, the subject matter of the complaint being acts and omissions of the individual defendants as agents of defendant United States of America, 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."

Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the issuance of the writ of preliminary injunction. The company opposed the motion. The trial court denied the motion and issued the writ. The defendants moved twice to reconsider but to no avail.

Hence, this petition [to the SC for certiorari? Was there no case filed to the CA?]

ISSUE

Whether or not the United States can invoke State Immunity [for what?]

HELD

YES. The traditional role of the state immunity exempts a state from being sued in the courts of another state without its consent or waiver. This rule is necessary consequence of the principle of independence and equality of states. However, the rules of international law are not petrified; they are continually and evolving and because the activities of states have multiplied.

It has been necessary to distinguish them between sovereign and governmental acts and private, commercial and proprietary acts. The result is that state immunity now extends only to sovereign and governmental acts.

A state may be descended to the level of an individual and can thus be deemed to have tacitly given 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 indisputably, a function of the government of highest order, they are not utilized for , nor dedicated to commercial or business purposes.