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Vinzon
[G.R. No. 154705. June 26, 2003]
FACTS:
1. ROI entered into a Maintenance Agreement with respondent James Vinzon,
sole proprietor of Vinzon Trade and Services.
2. Petitioners: prior to the date of expiration, informed respondent that the
renewal shall be at the discretion of the incoming Chief of Administration,
Minister Counsellor Azhari Kasim.
i. Minister Counsellor Kasim terminated the agreement because he
allegedly found respondents work and services unsatisfactory
and not in compliance with the standards set in the Maintenance
Agreement.
ii. Petitioners claim, moreover, that they had earlier verbally
informed respondent of their decision to terminate the
agreement.
3. Respondent filed a complaint against petitioners in the RTC of Makati
4. Petitioner: MTD:
i. ROI, as a foreign sovereign State, has sovereign immunity from
suit and cannot be sued as a party-defendant in the Philippines.
ii. That Ambassador Soeratmin and Minister Counsellor Kasim are
diplomatic agents as defined under the Vienna Convention on
Diplomatic Relations and therefore enjoy diplomatic immunity.
5. Respondent: Opposition, ROI has expressly waived its immunity from
suit. He based this claim upon the following provision in the Maintenance
Agreement:
“Any legal action arising out of this Maintenance Agreement shall be
settled according to the laws of the Philippines and by the proper court
of Makati City, Philippines.”
6. Respondents Opposition likewise alleged that Ambassador Soeratmin and
Minister Counsellor Kasim can be sued and held liable in their private
capacities for tortious acts done with malice and bad faith.
7. RTC ruled in favor of the Respondent.
8. CA affirmed.
ISSUE: WON the CA erred in sustaining the trial court’s decision that petitioners
have waived their immunity from suit by using as its basis the abovementioned
provision in the Maintenance Agreement.
HELD: NO.
Hence, the existence alone of a paragraph in a contract stating that any legal
action arising out of the agreement shall be settled according to the laws of the
Philippines and by a specified court of the Philippines is not necessarily a waiver of
sovereign immunity from suit. The aforesaid provision contains language not
necessarily inconsistent with sovereign immunity. On the other hand, such
provision may also be meant to apply where the sovereign party elects to sue in the
local courts, or otherwise waives its immunity by any subsequent act. The
applicability of Philippine laws must be deemed to include Philippine laws in its
totality, including the principle recognizing sovereign immunity. Hence, the proper
court may have no proper action, by
(a) a real action relating to private immovable property situated in the territory of
the receiving State, unless he holds it on behalf of the sending State for the
purposes of the mission;
Facts:
1. Plaintiff : CFI Manila: action to collect several sums of money from a contract
entered into between plaintiff and defendant
- This contract was entered provisions of Section 2 (c) (1) of the Armed
Services Procurement Act of 1947 of the United States of America (Public
Law 413, 80th Congress).
2. Defendant: MTD: court has no jurisdiction over defendant and over the
subject matter of the action.
3. CFI: sustained MTD: grounds (a) the court lacks jurisdiction over defendant,
it being a sovereign state which cannot be sued without its consent; and (b)
plaintiff failed to exhaust the administrative remedies provided for in Article
XXI of the contract.
Issue: WON USA, being a sovereign state, cannot be sued without its consent.
Held: NO.
It is however contended that when a sovereign state enters into a contract with a
private person the state can be sued upon the theory that it has descended to the
level of an individual from which it can be implied that it has given its consent to be
sued under the contract. Thus, appellant cites the case of Santos vs. Santos, 92
Phil. 281; 48 Off. Gaz., 4815, wherein this Court made the following
pronouncement:
... If, where and when the state or its government enters into a contract,
through its officers or agents, in furtherance of a legitimate aim and purpose
and pursuant to constitutional legislative authority, whereby mutual or
reciprocal benefits accrue and rights and obligations arise therefrom, and if
the law granting the authority to enter into such contract does not provide
for or name the officer against whom action may be brought in the event of a
breach thereof, the state itself may be sued even without its consent,
because by entering into a contract the sovereign state has descended to the
level of the citizen and consent to be sued is implied from the very act
entering into such contract. If the dignity of the state, the sacredness of the
institution, the respect for the government are to be preserved and the
dragging of its name in a suit to be prevented, the legislative department
should name the officer or agent against whom the action may be brought in
the event of breach of the contract entered into under its name and
authority. And the omission or failure of the legislative department to do so is
no obstacle or impediment for an individual or citizen, who is aggrieved by
the breach of the contract, to bring an action against the state itself for the
reasons already adverted to, to wit: the descent of the sovereign state to the
level of the individual or citizen with whom it entered into a contract and its
consent to be sued implied from the act of entering into such contract.
Considering that the United States Government, through its agency at Subic Bay,
entered into a contract with appellant for stevedoring and miscellaneous labor
services within the Subic Bay area, a U. S. Navy Reservation, it is evident that it
can bring an action before our court for any contractual liability that political entity
may assume under the contract. The trial court, therefore, has jurisdiction to
entertain this case in so far as appellee is concerned.
CONSTANTINO VS CUISIA
Facts:
The Financing Program was the culmination of efforts that began during the
term of former President Corazon Aquino to manage the country’s external debt
problem through a negotiation-oriented debt strategy involving cooperation and
negotiation with foreign creditors.
ISSUE:
Held:
The language of the Constitution is simple and clear as it is broad. It allows the
President to contract and guarantee foreign loans. It makes no prohibition on the
issuance of certain kinds of loans or distinctions as to which kinds of debt
instruments are more onerous than others.
The only restriction that the Constitution provides, aside from the prior concurrence
of the Monetary Board, is that the loans must be subject to limitations provided by
law. In this regard, we note that Republic Act (R.A.) No. 245 as amended by Pres.
Decree (P.D.) No. 142, s. 1973, entitled An Act Authorizing the Secretary of Finance
to Borrow to Meet Public Expenditures Authorized by Law, and for Other Purposes,
allows foreign loans to be contracted in the form of, inter alia, bonds.