FERNANDO A.

FROILAN, plaintiff-appellee,
vs.
PAN ORIENTAL SHIPPING CO., defendant-appellant,
REPUBLIC OF THE PHILIPPINES, intervenor-appellee.

Ponente:
PARAS, C.J.:

Action:
Appeal from a decision of the lower courts

Facts:
Plaintiff, Fernando Froilan filed a complaint against Pan Oriental Shipping Co., alleging that he purchased
from the Shipping Commission the vessel for P200,000 and agreeing to pay the balance in instalments.
To secure the payment of the balance of the purchase price, he executed a chattel mortgage of said
vessel. Due to the non-payment of the installments, the Shipping Commission took possession of said
vessel and considered the contract of sale cancelled. The Shipping Commission chartered and delivered
said vessel to the Pan Oriental Shipping Co. subject to the approval of the President of the Philippines.
Plaintiff appealed the action of the Shipping Commission to the President of the Philippines and, in its
meeting the Cabinet restored him to all his rights under his original contract.
Plaintiff, prayed that a writ of replevin be issued for the seizure of said vessel. The lower court issued the
writ of replevin prayed for by Froilan and by virtue thereof the Pan Oriental Shipping Co. was divested of
its possession of said vessel.
Pan Oriental protested for the reason that when the vessel was delivered to it, the Shipping
Administration had authority to dispose of said authority to the property, Plaintiff having already
relinquished whatever rights he may have thereon. Pan Oriental refused to surrender possession of the
vessel, he filed an action to have him declared the rightful owner of said property. The Republic of the
Philippines was allowed to intervene in said civil case praying for the possession of the in order that the
chattel mortgage constituted thereon may be foreclosed.

Issues:
Whether or not the Court has jurisdiction over the intervenor with regard to the counterclaim.     
Ruling: the appealed order is hereby reversed and set aside and the case remanded to the lower court for
further proceedings.

Ratio Decidendi:
Yes. The Supreme Court held that the government impliedly allowed itself to be sued when it filed a
complaint in intervention for the purpose of asserting claim for affirmative relief against the plaintiff to the
recovery of the vessel. The immunity of the state from suits does not deprive it of the right to sue private
parties in its own courts. The state as plaintiff may avail itself of the different forms of actions open to
private litigants. In short, by taking the initiative in an action against a private party, the state surrenders
its privileged position and comes down to the level of the defendant. The latter automatically acquires,
within certain limits, the right to set up whatever claims and other defenses he might have against the
state.
 BENITO E. LIM, as administrator of the Intestate Estate of Arsenia Enriquez, plaintiff-appellant,
vs.
HERBERT BROWNELL, JR., Attorney General of the United States, and ASAICHI KAGAWA,
defendants-appellee, REPUBLIC OF THE PHILIPPINES, intervenor-appellee.

Ponente:
GUTIERREZ DAVID, J.:

Action:
Appeal from an order of the Court of First Instance of Manila

Facts:
The property in dispute consists of four parcels of land situated in Tondo,City of Manila. The lands
were,after the last world war, found by the Alien Property Custodian of the United States to be registered
in the name of Asaichi Kagawa, national of an enemy country, Japan. On August 3, 1948,the Philippine
Alien Property Administrator (PAPA) and the President of the Philippines, executed two formal
agreements, whereby the said Administrator transferred all the said four lots to the Republic of the
Philippines under the Trading with the Enemy Act.
On November 15, 1948 , the latter's son Benito E. Lim filed a formal notice of claim to the property with
the PAPA On the theory that the lots in question still belonged to Arsenia Enriquez. that they were
mortgaged by her to the Mercantile Bank of China Asaichi Kagawa, who, by means of threat and
intimidation succeeded in preventing Arsenia Enriquez from exercising her right of redemption
On March 7, 1950, the claim was disallowed by the PAPA. On November 13, 1950, the claimant Benito E.
Lim filed a complaint in the Court of First Instance of Manila against the PAPA (later substituted by the
Attorney General of the United States) for the recovery of the property in question with back rents. The
complaint was later amended to include Asaichi Kagawa as defendant.

Issues:
Whether or not lntervenor-Appellee (Republic of the Philippines) be sued?

Ruling:
The order appealed is affirmed, but revoked insofar as it dismisses the complaint with respect to Lots 3
and 4, as to which the case is hereby remanded to the court below for further proceedings.

Ratio Decidendi:
No suit or claim for the return of said properties pursuant to Section 9 or 32 (a) of the Trading with the
Enemy Act was filed by Plaintiff within two years from the date of vesting, the "later" date and the last on
which suit could be brought.
Considering the law applicable there is no denying that an action against the Alien Property Custodian, or
the Attorney General of the United States as his successor, involving vested property under the Trading
with the Enemy Act located in the Philippines, is in substance an action against the United States. The
immunity of the state from suit, however, cannot be invoked where the action, as in the present case, is
instituted by a person who is neither an enemy or ally of an enemy for the purpose of establishing his
right, title or interest in vested property, and of recovering his ownership and possession. Congressional
consent to such suit has expressly been given by the United States.
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.

Ponente:
ABAD SANTOS, J.

Action:
petition to review

Facts:
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. 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.

Ruling:
the petition is granted; the questioned orders of the respondent judge are set aside and Civil Case No. is
dismissed. Costs against the private respondent.

Ratio Decidendi:
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 acta jure
gestionis of the foreign sovereign. Its commercial activities of economic affairs. A state is deemed 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.
USA v. GUINTO
182 SCRA 644FACTS:
The cases have been consolidated because they all involve the doctrine of state
immunity. In GR No. 76607, private respondents regarding suing several officers of the
US Air Force in connection with the bidding for barbering services in Clark Air Base. In
GR No. 80018, Luis Bautista was arrested following a buy-bust operation for a violation
of the Dangerous Drugs Act. Bautista then filed a complaint for damages claiming that
because of the acts of the respondents, he lost his job. In GR No. 79470, Fabian Genove
filed a complaint for damages against petitioner for his dismissal as cook in the US Air
Force. In GR No. 80258, complaint for damage was filed by the respondents against
petitioners for injuries allegedly sustained by plaintiffs. All cases invoke the doctrine of
state immunity as a ground to dismiss the same.
ISSUE:
Are the petitioners immune from suit?

HELD:
It is clear that the petitioners in GR No. 80018 were acting in the exercise of their
official functions. They cannot be directly impleaded for the US government has not
given its consent to be sued. In GR No. 79470, petitioners are not immune because
restaurants are commercial enterprises, however, the claim of damages by Genove
cannot be allowed on the strength of the evidence presented. Barber shops are also
commercial enterprises operated by private persons, thus, petitioners in GR No. 76607
cannot plead any immunity from the complaint filed. In GR No. 80258, the respondent
court will have to receive the evidence of the alleged irregularity in the grant of the
barbershop concessions before it can be known in what capacity the petitioners were
acting at the time of the incident.

Santiago v Republic, 87 SCRA 294

By Unknown - April 25, 2014

Facts: On August 9, 1976, Ildefonso Santiago through his counsel filed an action for
revocation of a Deed of Donation executed by him and his spouse in January of 1971,
with the Bureau of Plant Industry as the Donee, in the Court of First Instance of
Zamboanga City. Mr. Santiago alleged that the Bureau, contrary to the terms of
donation, failed to install lighting facilities and water system on the property and to
build an office building and parking lot thereon which should have been constructed
and ready for occupancy on before December7, 1974. That because of the
circumstances, Mr. Santiago concluded that he was exempt from compliance with an
explicit constitutional command, as invoked in the Santos v Santos case, a 1952
decision which is similar. The Court of First Instance dismissed the action in favor of the
respondent on the ground that the state cannot be sued without its consent,
and Santos v Santos case is discernible. The Solicitor General, Estelito P. Mendoza
affirmed the dismissal on ground of constitutional mandate. Ildefonso Santiago filed a
petition for certiorari to the Supreme Court.

Issue: Whether or not the state can be sued without its consent.

Held: The Supreme Court rules, that the constitutional provision shows a waiver.
Where there is consent, a suit may be filed. Consent need not to be express. It can be
implied. In this case it must be emphasized, goes no further than a rule that a donor,
with the Republic or any of its agency being a Donee, is entitle to go to court in case of
an alleged breach of the conditions of such donation.

The writ of  Certiorari prayed is granted and the order of dismissal of October 20, 1977
is nullified, set aside and declare to be without force and effect. The Court of First
Instance of Zamboanga City, Branch II, is hereby directed to proceed with this case,
observing the procedure set forth in the rules of court. No cost