Froilan vs. Pan Oriental Shipping Co.

FACTS:
- Feb 3, 1951 - Plaintiff-appellee, Fernando A. Froilan filed a complaint against the
defendant-appelant, Pan Oriental, alleging that he purchased from the Shipping
Commission the vessel FS-197 and due to non-payment of instalments of chattel
mortgage, the Shipping Commission took possession of the said vessel and
considered the contract of sale canceled
- The Shipping Commission delivered the said vessel to Pan Oriental. Froilan appealed to
the President of the Philippines and in its meeting, Aug 25 1950 - the Cabinet restored
him to all his rights under his original contact with the Shipping Commission. He
demanded from Pan Oriental possession of the vessel but the latter refused
- Nov 10, 1951 - The Government of the Republic of the Philippines intervened alleging
that Froilan had failed to pay to the Shipping Commission the balance due on the
purchase price of the vessel in question and that the State was entitled to the
possession of the said vessel under the terms of the original contract. Therefore, it
prayed for Froilan to deliver the vessel to its representative, the Board of Liquidators in
accordance with the revisions of the Chattel Mortgage Law
- Nov 29, 1951 - Pan Oriental filed a counterclaim that the Government of the Republic of
the Philippines was obligated to deliver the vessel to it by virtue of a contract of
bareboat charter with option to purchase. It alleged that it had made the necessary
and useful expenses on the vessel and claimed the right to it. It prayed that if the GRP
was successful in obtaining the possession of the said vessel, it should comply with its
obligations of delivering it to Pan.
- Nov 29, 1951 - Froilan tendered to the Board of Liquidators a check in payment of his
balance/obligation to the Shipping Commission as claimed by the intervenor GRP
- Feb 3, 1952 - the lower court held that the payment of Froilan discharged his obligation
to the Government of the Republic of the Philippines therefore the complaint in
intervention has been dismissed
- May 10, 1952 - GRP filed a motion to dismiss the counterclaim of Pan Oriental Shipping
against it on the ground that the purpose of the counterclaim was to compel the GRP
to deliver the vessel to it in the event that the GRP recovers the vessel from Froilan
however since payment has already been made by Froilan, the counterclaim is no
longer feasible
(I didnt include the stuff about the counterclaim na cause hindi siya pertinent and also, di
ko masyado gets)
ISSUE:
WON the RP of the Philippines is immune from suit.
HELD: NO

- By filing its complaint in intervention the Government in effect waived its right of nonsuability.
- "The immunity of the state from the 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 defense he might have against the state.
- No direct suit can be maintained against the United States. But when an action is
brought by the United States to recover money in the hands of a party who has a legal
claim against them, it would be a very rigid principle to deny to him the right of setting
up such claim in a court of justice, and turn him around to an application to
Congress.
- It is however, contended for the intervenor that, if there was at all any waiver, it was in
favor of the plaintiff against whom the complainant in intervention was directed. This
contention is untenable.As already stated, the complaint in intervention was in a sense
in derogation of the defendants claim over the possession of the vessel in question.