U.S. v. Ruiz (1985) Summary Eligio de Guzman & Co., Inc. sued the United States (US) in a Philippine court after the US, through its ocers, re!ected the Compan"#s $id for certain repair %or s in the US na'al $ase in Su$ic. Claiming the rule on State immunit", the US sought the dismissal of the case due to lac of !urisdiction of the court since the US, as a foreign so'ereign, has not gi'en conse to the suit. Considering that the repairs of the na'al $ase pertain to the defense of the US and the Philippines, a so'ereign function ( jure imperii), the Supreme Court ruled that the U cannot $e sued %ithout its consent under the rule on State immunit". Facts • US had a na'al $ase in Su$ic, am$ales. In *+ , it in'ited $idders for the repair of %har'es or shoreline in the na'al station. • Eligio de Guzman & Co., Inc. (the Compan") su$mitted $ids $ut the US -ept. of a'" re!ected said $ids $ecause of the Compan"#s pre'ious unsatisfactor" performance on a repair contract %ith the US a'al Station. /lso, the pro!ects had $een a%arded to third parties. • 0he Compan" 1led a complaint against the US and mem$ers of the Engineering Command of the US a'" for speci1c performance or damages. • 0he defendants mo'ed to dismiss the complaint for lac of !urisdiction $ecause the su$!ect matter is the acts and omissions of the indi'idual defendants as agents of US, a foreign so'ereign %hich has not gi'en her consent to the suit. Issue: 2hether or not the US ma" $e sued %ithout its consent Held/Ratio: !. • 0he traditional rule of State immunit" e3empts a State from $eing sued in the courts of another State %ithout its consent or %ai'er. -ue to the constantl" de'eloping and e'ol'ing acti'ities of states, it has $een necessar" to distinguish $et%een so'ereign and go'ernmental acts ( jure imperii) and pri'ate, commercial and proprietar" acts ( jure gestionis). 0he result is that State immunit" no% e3tends onl" to acts jure imperii. • / State ma" $e said to ha'e descended to the le'el of an indi'idual and can thus $e deemed to ha'e tacitl" gi'en its consent to $e sued onl" %hen it enters into $usiness contracts ( jure gestionis). It does not appl" %here the contract relates to the e3erc of its so'ereign functions. In this case, the pro!ects are an integral part of the na'al $ase %hich is de'oted to the defense of $oth the US and the Philippines, a function of the go'ernment of the highest order4 the" are not utilized for nor dedicated commercial or $usiness purposes. • 0he correct test for the application of State immunit" is not the conclusio contract $" a State $ut the legal nature of the act. In Syquia vs. Lopez ( *5*), %here the plainti6s leased apartment $uildings to the US for the use of its militar" ocials and later on sued for unla%ful detainer, it %as held that the real pa defendant is the US Go'ernment since an" !udgment for $ac rentals or damages %ill ha'e to $e paid not $" indi'idual defendants $ut $" the US Go'ernment. 0he US concluded contracts %ith pri'ate indi'iduals $ut the contracts not%ithstanding the US %as not deemed to ha'e gi'en or %ai'ed its consent to $e sued for the reason that the contracts %ere for jure imperii and not for jure gestionis.
Eligio de Guzman & Co., Inc. sued the United States (US) in
a Philippine court after the US, through its officers, rejected the
Companys bid for certain repair works in the US naval base in
Subic. Claiming the rule on State immunity, the US sought the
dismissal of the case due to lack of jurisdiction of the court
since the US, as a foreign sovereign, has not given consent to the
suit. Considering that the repairs of the naval base pertain to the
defense of the US and the Philippines, a sovereign function (jure
imperii), the Supreme Court ruled that the US cannot be sued
without its consent under the rule on State immunity.
Facts
US had a naval base in Subic, Zambales. In 1972, it invited
bidders for the repair of wharves or shoreline in the naval
station. Eligio de Guzman & Co., Inc. (the Company) submitted
bids but the US Dept. of Navy rejected said bids because of the
Companys previous unsatisfactory performance on a repair contract
with the US Naval Station. Also, the projects had been awarded to
third parties. The Company filed a complaint against the US and
members of the Engineering Command of the US Navy for specific
performance or damages. The defendants moved to dismiss the
complaint for lack of jurisdiction because the subject matter is
the acts and omissions of the individual defendants as agents of
US, a foreign sovereign which has not given her consent to the
suit. Issue: Whether or not the US may be sued without its
consentHeld/Ratio: NO. The traditional rule of State immunity
exempts a State from being sued in the courts of another State
without its consent or waiver. Due to the constantly developing and
evolving activities of states, it has been necessary to distinguish
between sovereign and governmental acts (jure imperii) and private,
commercial and proprietary acts (jure gestionis). The result is
that State immunity now extends only to acts jure imperii. 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 contracts (jure gestionis). It does
not apply where the contract relates to the exercise of its
sovereign functions. In this case, the projects are an integral
part of the naval base which is devoted to the defense of both the
US and the Philippines, a function of the government of the highest
order; they are not utilized for nor dedicated to commercial or
business purposes.
The correct test for the application of State immunity is not
the conclusion of a contract by a State but the legal nature of the
act. In Syquia vs. Lopez (1949), where the plaintiffs leased
apartment buildings to the US for the use of its military officials
and later on sued for unlawful detainer, it was held that the real
party defendant is the US Government since any judgment for back
rentals or damages will have to be paid not by individual
defendants but by the US Government. The US concluded contracts
with private individuals but the contracts notwithstanding the US
was not deemed to have given or waived its consent to be sued for
the reason that the contracts were for jure imperii and not for
jure gestionis.
