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PIL Digest US-vs-Ruiz

The United States Navy invited bids for repair work at its naval base in the Philippines. Eligio de Guzman & Co. submitted bids but was later informed it did not qualify for the work due to past unsatisfactory performance. The company sued the US and Navy officials, claiming the court had jurisdiction. However, the court found that as the naval base projects were for national defense, not commercial purposes, they constituted sovereign acts of the US government. As the US did not consent to the suit, the court did not have jurisdiction over the defendants based on principles of state immunity under international law.

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76 views

PIL Digest US-vs-Ruiz

The United States Navy invited bids for repair work at its naval base in the Philippines. Eligio de Guzman & Co. submitted bids but was later informed it did not qualify for the work due to past unsatisfactory performance. The company sued the US and Navy officials, claiming the court had jurisdiction. However, the court found that as the naval base projects were for national defense, not commercial purposes, they constituted sovereign acts of the US government. As the US did not consent to the suit, the court did not have jurisdiction over the defendants based on principles of state immunity under international law.

Uploaded by

Jade Tanggaan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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US vs. Hon. V. M.

Ruiz

Facts:

The United States of America has a naval base in Subic, Zambales. The base
was one of those provided in the Military Bases Agreement between the Philippines
and the United States.

Sometime in May 1972, the United States invites submission of bids for the repair of
several wharves. Eligio de Guzman & Co., Inc. Responded to the invitation and
submitted the bids. Subsequently thereto, the company received from the United
States two telegrams requesting it to confirm its price proposals and for the name
of its binding company. The company complied with the request.

In June 1972, the company received a letter which was signed by William I. Collins,
Director, Contracts Division, Naval Facilities Engineering Command, Southwest
Pacific, Department of the Navy of the United States. The letter said that the
company did not qualify to receive an award for the project because of its previous
unsatisfactory performance rating on the repair contract for the sea wall at the boat
landings of the U.S Naval Station in Subic Bay. The letter further said that the
projects had been awarded to third parties.

Because of this, the company sued the Unites States of America and Messrs. James
E. Galloway, William I. Collins and Robert Gohier all member of the Engineering
Command of the U.S Navy. The complaint is to order the defendants to allow the
plaintiff to perform the work on the projects and, in the event that specific
performance was no longer possible, to order the defendants to pay damages. The
company also asked for the issuance of preliminary injunction to restrain the
defendants from entering into contracts with third parties for work on the projects.

The defendants entered their special appearance for the purpose of questioning the
jurisdiction of the court over the subject matter of the complaint and the persons of
defendants, the subject matter if 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 causes of
action asserted in the complaint. Subsequently, the defendants filed a motion to
dismiss the complaint which included the 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 but to no avail. Hence, the instant petition which
seeks to refrain the proceeding for lack of jurisdiction on the part of the trial court.

Issue:

Whether or not the trial court has jurisdiction over the defendants.
Held:

No.

The traditional rule of State immunity exempts a State from being sued in the
courts of another State without its consent or waiver. This rule is a necessary
consequence of the principles of independence and equality of States. However, the
ruled of International Law are not petrified; they are constantly developing and
evolving. And because the activities of States have multiplied, it has been
necessary to distinguish them between sovereign and governmental acts (jus
imperii) and private, commercial and proprietary acts (jus gestiones). The result is
that State immunity now extends to acts jus imperii.

The respondent judge recognized the restrictive doctrine of state immunity when he
said in his order denying the defendants motion. He rely it on the Lyons case.
However, the reliance placed on Lyons by the respondent judge is misplaced.

The restrictive application of State immunity is proper only when the proceeding
arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State may be said to have
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 contract.

In the case at hand, it can be gleaned that the projects are an integral part of the
naval base which is devoted to the defense of both the United States and the
Philippines, indisputably a function of the government of the highest order; they are
not utilized for not dedicated to commercial or business purposes. That the correct
test for the application of the State immunity is not the conclusion of a contract by a
State but the legal nature of the act shown.

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