G.R. No.

L-6060

September 30, 1954

FERNANDO A. FROILAN, plaintiff-appellee,

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

FACTS:
Defendant IN THIS CASE took possession of the vessel in question after it had
been repossessed by the Shippin g Administration and title thereto reacquired
b y th e go ve rn me nt , f o llo win g th e o ri gina l p u rcha se r, Fe rna nd o Fro ilan s, d ef a u lt
in his payment of the unpaid balance and insurance premiums for the said
vessel. Pan Oriental chartered said vessel and operated the same after it had
repaired the vessel and paid the stipulated initial payment, thereby exercising
its option to purchase, pursuant to a bareboat charter contract entered between
said company and the Shipping Corporation. The Cabinet resolved to restore
Froilan to his rights under the original contract of sale on condition that he
shall pay a sum of money upon delivery of the vessel to him, that he shall
continue paying the remaining installments due, and that he shall assume the
expenses incurred for the repair and by docking of the vessel. Pan Oriental
protested to this restoration of Froilans rights under the contract of sale, for
the reason that when the vessel was delivered to it, the Shipping
A d m i n i s t r a t i o n h a d a u t h o r i t y t o d i s p o s e o f s a i d a u t h o r i t y t o t h e p r o p e r t y,
Froilan having already relinquished whatever rights he may have thereon.
Froilan paid the required cash of P10,000.00 and as Pan Oriental refused to
surrender possession of the vessel, he filed an action for in the CFI of Manila
to recover possession thereof and have him declared the rightful owner of said
p r o p e r t y. Th e R e p u b l i c o f t h e P h i l i p p i n e s wa s a l l o we d t o i n t e r ve n e i n sa i d c i v i l
case praying for the possession of the in order that the chattel mortgage
constituted thereon may be foreclosed.
ISSUE:
Whether or not the RP of the Philippines is immune from suit.
HELD:
NO, because 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. 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 defendant
automatically acquires, within certain limits, the right to set up whatever claims and other defense he might have against the
state.