The Doctrine of State Immunity: Case: USA v. Ruiz, GR No. L-35645, May 22, 1985

Chapter 4
The Doctrine of State

Immunity
Case:
USA v. Ruiz, GR No. L-35645, May 22, 1985
Question:
•Under the Constitution,can the state be

sued without its consent?
The constitution declares that the state
may not be sued without its consent.
Basis:
• Indiscriminate suits against the State will result in the impairment of
its dignity, besides a challenge to its supposed infallibility.
• Justice Holmes: based not on “ any formal conception or obsolete
theory but on the logical and practical ground that there can be no
legal right against the authority which makes the law on which the
right depends.”
• That the demands and inconveniences of litigation will divert the time
and resources of the State from the more pressing matters
demanding its attention, to the prejudice of the public welfare
*(Isagani ,2014, p. 48)
• Added basis is the principle of the sovereign equality
of States, under which one State cannot assert
jurisdiction over another in violation of the maxim par
in parem non habet imperium. To do so would “
unduly vex the peace of nations”
•But it does not mean though that
foreign state would at all times be
immune from all suits filed against
it before the courts of a host or local
state.
Doctrine of State Immunity
• Absolute theory:
The doctrine of foreign immunity provides that a foreign state is
generally immune from the jurisdiction of the courts of another
sovereign state
• Restrictive theory:
Foreign states were immune from jurisdiction relating to their public
acts or governmental activities (jure imperii) but not from their private
acts or commercial and proprietary acts (jure gestionis).
Question:
•What State immunity doctrine

that the Philippines adheres to?
• In relation to that, we have the case of
United States of America v. Ruiz (G.R. No.
L-35645 May 22, 1985)
• PETITIONERS:
United States of America, Capt. James E. Galloway, William I. Collins
and Robert Gohier
• RESPONDENTS:
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First
Instance of Rizal and ELIGIO DE GUZMAN & CO., INC.,
• PONENTE:
Justice Vicente Abad Santos
Facts:
• Petitioner invited the submission of bids for repair of its wharves and shoreline
in the Subic Bay Area. De Guzman and Co. responded to the invitation and
submitted bids. Said company was requested by telegram to confirm its price
proposals and for the name of its bonding company, and from which it
complied.
• Later, the United States, through its agents, informed said company that it was
not qualified to receive an award for the project because of its previous
unsatisfactory performance. Included in the letter is the information that the
project now has been given to a third party. The company sued petitioner for
them to work on that project and if no longer possible, for damages. It also
asked for a writ of preliminary injunction to restrain the defendants from
entering into contracts with others.
• The United States entered a special appearance for the purpose only of
questioning the jurisdiction of the court over the subject matter of the
complaint and the persons of the defendants, the subject matter of the
complaint being acts and omissions of the individual defendants as
agents of the defendant United States of America, a foreign sovereign
which has not given its consent to this suit or any other suit for the
cause of action asserted in the complaint. US filed a motion to dismiss
and opposed the writ. The trial court denied the motion and issued a
writ.
Issue:
• Whether the US may be sued?

Held:
• No in this case. 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 rules 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 (jure
imperii) and private, commercial and proprietary acts (jure gestionis).
The result is that State immunity now extends only to acts jure imperii.
The restrictive application of State immunity is now the rule in the
United States, the United Kingdom and other states in western Europe.
• The restrictive application of state immunity is proper only when the
proceedings 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 be thus deemed
to have tacitly given its consent to be sued only when 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, undisputed 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 as shown in
Syquia vs. Lopez, 84 Phil. 312 (1949).
Separate opinion
Makasiar, J.
• The petition should be dismissed and proceedings in the civil case no. 779-M in the defunct CFI
(now RTC) of Rizal be allowed to continue therein.
• Justice Perfecto in his dissenting opinion in Syquia vs. Almeda lopez:

Once a foreign government enters into a private contract with the private citizens of another country,
such foreign government cannot shield its non-performance of the terms of the contract under the
cloak of non-jurisdiction. To place such foreign government beyond the jurisdiction of the domestic
courts is to give approval to the execution of unilateral contacts ,graphically described In Spanish in
‘contratos leoninos’,because one party gets the lion’s share to the detriment of the other. To give
validity to such contract is to sanctify bad faith,deceit, fraud. We prefer to adhere to the thesis that
all parties in a private contract, including governments and the most powerful of them, are
amenable to law.
• The doctrine of government immunity from suit cannot and should not
serve as an instrument for perpetrating an injustice on a citizen.
• Reliance by petitioners on the non-suability of the U.S Government
before the local courts, actually clashes with the RP-US Military Bases
Agreement, which specifically stresses that “it is the duty of the
members of the United States Forces, the civilian component and their
dependents, to respect the laws of the Republic of the Philippines and
to abstain from any activity inconsistent with the spirit of the Military
Bases agreement and, in particular, from any political activity in the
Philippines. The United States shall take all measure within its authority
to insure that they adhere to them.

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Chapter 4

The Doctrine of State

•Under the Constitution,can the state be

•What State immunity doctrine

• Whether the US may be sued?

• Justice Perfecto in his dissenting opinion in Syquia vs. Almeda lopez:

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