EPG Construction v. Vigilar, GR No. 131544, March 16, 2001 Nasa book lang ito..if u want a shorter version..p.

534 FACTS: The Ministry of Human Settlement, through the BLISS Development Corporation, initiated a housing project on a government property along the east bank of the Manggahan Floodway in Pasig City. For this purpose, the Ministry of Human Settlement entered into a Memorandum of Agreement (MOA) with the Ministry of Public Works and Highways. By virtue of the MOA, the Ministry of Public Works and Highways forged individual contracts with herein petitioners EPG Construction Co., et. al. for the construction of the housing units. But the appropriation of fund for the project covered by contract was not sufficient to complete the same. By reason of the verbal request and assurance of then DPWH Secretary that additional funds would be available and forthcoming, petitioners agreed to undertake and perform additional constructions for the completion of the housing units, despite the absence of appropriations and written contracts to cover subsequent expenses for the additional constructions. Petitioners then received payment for the construction work duly covered by the individual written contracts, thereby leaving an unpaid balance representing the additional constructions. Petitioners sent a demand letter to the DPWH Secretary and submitted that their claim for payment was favorably recommended by DPWH Assistant Secretary for Legal Services who recognized the existence of implied contracts covering the additional constructions. This claim was later denied by the respondent Secretary (DPWH). Respondent argues that the State may not be sued in the instant case, invoking the constitutional doctrine of Non-suability of the State, otherwise known as the Royal Prerogative of Dishonesty. ISSUE: WON DPWH can invoke state immunity. HELD: NO. Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty and conveniently hide under the States cloak of invincibility against suit, considering that this principle yields to certain settled exceptions since the immunity rule is not absolute as it is does not say that the immunity is under any circumstances. This exception is that it cannot serve as an instrument for perpetrating an injustice on a citizen. There will be inequity and injustice if the petitioners will not be compensated based on quantum meruit (as much as they deserve) since they have relied on the assurance of the then DPWH Secretary and since the additional work was necessary to complete the project.

Philrock v. Board of Liquidators (as Liquidator of the REPARATIONS COMMISSION), respondent, 180 SCRA 171 (1989) Nasa book lang ito..if u want a shorter version..p.532

defunct

Facts: Petitioner, Philippine Rock Industries filed a complaint against the Board of Liquidators for Specific Performance or Revaluation with Damages, praying that the defective rock pulverizing machinery which it purchased from Reparations Commission (REPACOM) be replaced with a new one in good and operable condition according to the specifications of their contract, or, in the alternative, to refund the value of the defective rock pulverizing machinery at 31 % of its contract price plus damages. The trial court decided in favor of PHILROCK ordering REPACOM and its Board of Liquidators to pay losses and damages incurred by PHILROCK. PHILROCK filed an urgent motion for execution pending appeal. A Writ of Execution was then issued by the trial court and an order of Garnishment was served to PNB against the funds of REPACOM in the account of the Board of Liquidators to satisfy the judgment in favor of PHILROCK. The Board filed a petition for certiorari and prohibition in the Court of Appeals which set aside the trial court's order of execution on the basis that the funds deposited by the Board of Liquidators in the Philippine National Bank may not be garnished to satisfy a money judgment against the petitioner as these funds are public funds. Issue: Whether the funds of REPACOM in the account of the Board of Liquidators in the Philippine National Bank may be garnished to satisfy a money judgment against the BOARD. Held: Got this mostly from the book. NO. The REPACOM having no juridical personality, is a government agency enjoying the immunity from suit of its principal, the Government. The sale contract it entered into with PHILROCK was merely incidental to the performance of its governmental function. Hence, it was not a waiver of immunity. The sale of the rock pulverizing plant to PHILROCK by the Board of liquidators, although proprietary in nature was merely incidental to the performance of the Board's primary and governmental function of settling and closing the affairs of the REPACOM. Hence, its funds in the Philippine National Bank are public funds which are exempt from garnishment. Moreover, even if REPACOM is deemed to have waived its immunity by entertaining the suit of PHILROCK, governments consent to be sued does not mean it concedes liability. Without an act of Congress appropriating the amount due, there can be no disbursement of public funds. Republic of Indonesia v. Vinzon, GR 154705, June 26, 2003 FACTS:

Petitioner, Republic of Indonesia, represented by its Counsellor entered into a Maintenance Agreement with respondent James Vinzon, owner of Vinzon Trade and Services. The Maintenance Agreement stated that respondent shall, for a consideration, maintain the embassy and the official residence of the Ambassador. It is likewise stated therein that the agreement shall be effective for a period of four years and will renew itself automatically unless cancelled by either party by giving thirty days prior written notice from the date of expiry. Petitioners claim that sometime prior to the date of expiration of the said agreement they informed respondent that the renewal of the agreement shall be at the discretion of the incoming Chief of Administration. When the Chief of Administration assumed his position, he allegedly found respondents work and services unsatisfactory and not in compliance with the standards set forth in the Agreement. Hence, the Indonesian Embassy terminated the agreement. Claiming that the termination was arbitrary and unlawful, the respondent filed a complaint against petitioners. Petitioners filed a Motion to Dismiss, alleging that the Republic of Indonesia, as a foreign sovereign State, has sovereign immunity from suit and cannot be sued as a party-defendant in the Philippines. The said motion further alleged that Ambassador Soeratmin and Minister Counsellor Kasim are diplomatic agents as defined under the Vienna Convention on Diplomatic Relations and therefore enjoy diplomatic immunity. In turn, respondent filed an Opposition to the said motion alleging that the Republic of Indonesia has expressly waived its immunity from suit. He based this claim upon the following provision in the Maintenance Agreement:
Any legal action arising out of this Maintenance Agreement shall be settled according to the laws of the Philippines and by the proper court of Makati City, Philippines.

Respondents Opposition likewise alleged that Ambassador Soeratmin and Minister Counsellor Kasim can be sued and held liable in their private capacities for tortious acts done with malice and bad faith.

ISSUE: Whether the Republic of Indonesia can successfully invoke state immunity from suit. HELD: Submission by a foreign state to local jurisdiction must be clear and unequivocal. It must be given explicitly or by necessary implication YES. General Rule: All states are sovereign equals and cannot assert jurisdiction over one another. Exception: The immunity of the sovereign is recognized only with regard to public acts or acts jure imperii, but not with regard to private acts or acts jure gestionis. If the foreign State is not engaged regularly in a business or commercial activity, and in this case it has not been shown to be so engaged, the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii.

Hence, the existence alone of a paragraph in a contract stating that any legal action arising out of the agreement shall be settled according to the laws of the Philippines and by a specified court of the Philippines is not necessarily a waiver of sovereign immunity from suit. The aforesaid provision contains language not necessarily inconsistent with sovereign immunity. There is no dispute that the establishment of a diplomatic mission is an act jure imperii. A sovereign State does not merely establish a diplomatic mission and leave it at that; the establishment of a diplomatic mission encompasses its maintenance and upkeep; hence, the agreement was entered into in discharge of its governmental function. On the matter of whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim may be sued herein in their private capacities, Article 31 of the Vienna Convention on Diplomatic Relations provides:

1. A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State. He shall also enjoy immunity from its civil and administrative jurisdiction, except in the case of: (a) a real action relating to private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State for the purposes of the mission; (b) an action relating to succession in which the diplomatic agent is involved as executor, administrator, heir or legatee as a private person and not on behalf of the sending State; (c) an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving State outside his official functions. xxx The act of petitioners Ambassador Soeratmin and Minister Counsellor Kasim in terminating the Maintenance Agreement is not covered by the exceptions provided in the abovementioned provision. The Solicitor General believes that said act may fall under subparagraph (c) thereof, but said provision clearly applies only to a situation where the diplomatic agent engages in any professional or commercial activity outside official functions, which is not the case herein.

Shell Philippines v. Jalos, GR No. 179918, September 8, 2010 Facts: Petitioner Shell Philippines Exploration and the Republic of the Philippines entered into Service Contract for the exploration and extraction of petroleum in northwestern Palawan.

Two years later, Shell discovered natural gas in the Camago-Malampaya area and pursued its development of the well under the Malampaya Natural Gas Project. This entailed the construction and installation of a pipeline from Shells production platform to its gas processing plant in Batangas. The pipeline spanned 504 kilometers and crossed the Oriental Mindoro Sea. Respondents who are fishermen filed a complaint for damages against Shell before RTC whose livelihood was adversely affected by the construction and operation of Shells natural gas pipeline. Shell asserted that the suit was actually against the State because under the service contract, the government was solidarily liable with Shell for damages caused to third persons. Shell claims that it cannot be sued without the States consent under the doctrine of state immunity from suit.

ISSUE: Whether the suit is actually against the State and is barred under the doctrine of state immunity. HELD: No. Shell is not an agent of the Philippine government, but a provider of services, technology and financing for the Malampaya Natural Gas Project. While the Republic appointed Shell as the exclusive party to conduct petroleum operations in the Camago-Malampayo area under the States full control and supervision, it does not follow that Shell has become the States "agent" within the meaning of the law. Shell is not immune from suit and may be sued for claims even without the States consent. Notably, the Philippine government itself recognized that Shell could be sued in relation to the project as stipulated in the Service Contract.

VIGILAR (secretary of DPWH) V. AQUINO 639 SCRA 772 new case FACTS: DPWH contracted with respondent Arnulfo D. Aquino, the owner of A.D. Aquino Construction and Supplies for the construction of a dike (embankment to prevent floods) in a river in Pampanga. The project was duly completed by respondent, who was then issued a Certificate of Project Completion. Respondent Aquino, however, claimed an amount still due him which petitioners refused to pay prompting him to file a complaint. Petitioners, for their part, set up the defense that the Complaint was a suit against the state.

ISSUE: Whether the petitioner invoke the States immunity from suit. HELD: NO.

Petitioners cannot escape the obligation to compensate respondent for services rendered and work done by invoking the states immunity from suit as this would cause injustice and inequity to the respondent. He must be compensated base on quantum meruit.