People vs. V.M. Ruiz

G.R. No. L-35645
A Philippine contractor sued the U.S. over rejected bids for naval base repairs; the Supreme Court ruled the U.S. immune, deeming the projects sovereign acts.
breach of contract state immunity jurisdiction

Case Digest (G.R. No. L-35645)

Facts:

United States of America, Capt. James E. Galloway, William I. Collins and Robert Gohier v. Hon. V. M. Ruiz and Eligio De Guzman & Co., Inc., G.R. No. L-35645, May 22, 1985, Supreme Court En Banc, Abad Santos, J., writing for the Court.

At the times material to this dispute, the United States of America operated a naval base at Subic Bay pursuant to the Military Bases Agreement. In May 1972 the U.S. authorities invited bids for several repair projects at Subic Bay; Eligio de Guzman & Co., Inc. submitted bids and later replied to U.S. telegrams requesting confirmation of prices and the name of its bonding company. In June 1972 the company received a letter signed by William I. Collins, Director, Contracts Division, Naval Facilities Engineering Command, Southwest Pacific, stating that the company did not qualify for the awards because of prior unsatisfactory performance and that the projects had been awarded to third parties.

Thereupon Eligio de Guzman & Co., Inc. filed Civil Case No. 779‑M in the Court of First Instance (CFI) of Rizal against the United States of America and the three U.S. naval officers (petitioners here) — James E. Galloway, William I. Collins and Robert Gohier — seeking an order compelling the defendants to allow the plaintiff to perform the work or, if specific performance was impossible, to pay damages, and praying for a writ of preliminary injunction restraining defendants from contracting with third parties for the projects. The defendants entered a special appearance solely to question the CFI’s jurisdiction over the subject matter and over persons, asserting that the United States, as a foreign sovereign, had not consented to suit.

The defendants moved to dismiss (and opposed the preliminary injunction). The trial court denied the motion to dismiss and issued the writ of preliminary injunction; motions for reconsideration by the defendants were denied. The petitioners thereupon filed the present petition to review, set aside those orders, and restrain the respondent trial jud...(Pro-only)

Issues:

  • Did the Court of First Instance of Rizal have jurisdiction to entertain Civil Case No. 779‑M against the United States of America and its agents given the doctrine of state immunity?
  • If jurisdiction is at issue, were the acts complained of — contracting for repair of wharves and shoreline at Subic Bay — governmental (jure imperii) or commercial/proprietary (jure gestionis), i.e., did the United States impliedly waive im...(Pro-only)

Ruling:

  • (Pro-only)

Ratio:

  • (Pro-only)

Doctrine:

  • (Pro-only)
Unlock Full Case Digest