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

o
o

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.

o 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?]

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.

HELD

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.