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USA vs Ruiz: Doctrine of Immunity Explained

The US Navy invited bids for repair projects at its naval base in Subic Bay, Philippines. Eligio de Guzman & Co. submitted bids but was later informed it did not qualify for the projects. The company sued the US for specific performance. The Supreme Court ruled that the US naval base was exercising sovereign functions in bidding for the contracts, not commercial activities, so the US had immunity from the suit as a sovereign state. The repair projects were an integral part of defending both the US and Philippines at the naval base, a core government function, not for commercial purposes. Therefore, the restrictive application of state immunity did not apply in this case.

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81 views1 page

USA vs Ruiz: Doctrine of Immunity Explained

The US Navy invited bids for repair projects at its naval base in Subic Bay, Philippines. Eligio de Guzman & Co. submitted bids but was later informed it did not qualify for the projects. The company sued the US for specific performance. The Supreme Court ruled that the US naval base was exercising sovereign functions in bidding for the contracts, not commercial activities, so the US had immunity from the suit as a sovereign state. The repair projects were an integral part of defending both the US and Philippines at the naval base, a core government function, not for commercial purposes. Therefore, the restrictive application of state immunity did not apply in this case.

Uploaded by

Precylyn Garcia Buñao
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

USA vs Ruiz

Doctrine of Immunity from Suit

Caption: USA VS RUIZ


G.R. No. L-35645 136 scra 487 May 22, 1985
UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT
GOHIER, petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and ELIGIO DE
GUZMAN & CO., INC., respondents.

Facts:
This is a petition to review, set aside certain orders and restrain perpetually the proceedings done by Hon. Ruiz
for lack of jurisdiction on the part of the trial court.

The United States of America had 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 invited the submission of bids for a couple of repair projects. Eligio de Guzman land Co., Inc. responded
to the invitation and submitted bids. Subsequent thereto, the company received from the US two telegrams
requesting it to confirm its price proposals and for the name of its bonding company. The company construed
this as an acceptance of its offer so they complied with the requests. The company received a letter which was
signed by William I. Collins of Department of the Navy of the United States, also one of the petitioners herein
informing that the company did not qualify to receive an award for the projects because of its previous
unsatisfactory performance rating in repairs, and that the projects were awarded to third parties. For this reason,
a suit for specific performance was filed by him against the US.

Issues:
Whether or not the US naval base in bidding for said contracts exercise governmental functions to be able to
invoke state immunity.

Discussions:
The traditional role of the state immunity exempts a state from being sued in the courts of another state without
its consent or waiver. This rule is necessary consequence of the principle of independence and equality of states.
However, the rules of international law are not petrified; they are continually 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 (juregestionis). The result is that
State immunity now extends only to acts jure imperil. The restrictive application of State immunity is now the
rule in the United States, the United Kingdom and other states in western Europe.

Rulings:
Yes. The Supreme Court held that 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 United States and the
Philippines, indisputably a function of the government of the highest order, they are not utilized for nor dedicated
to commercial or business purposes.

The restrictive application of state immunity is proper only when the proceedings arise out of commercial
transactions of the foreign sovereign. Its commercial activities of economic affairs. A state may be 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.

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