22. REPUBLIC OF THE PHILIPPINES v. ROQUE, JR.

G.R. No. 203610, October 10, 2016

FACTS:
In 1978, the Republic, through the Department of Public Works and Highways
(DPWH), approached the respondents, Gonzalo Roque, Jr., et. al, and asked them
to sell a portion of the land at government-dictated prices lower than the market
value. The Republic was supposed to use the land for President Marcos' National
Government Center (NGC) Project — his plan to bring together the various
national government offices in one venue for greater efficiency and to create
additional areas for the expanding needs of the central government and the
people.

The respondents allege that several public hearings regarding the sale took place
between the Republic and the respondents; and that during these meetings, the
Republic made the following representations:

First, the Republic guaranteed that although the respondents would get paid a
price much lower than the market value of the land, the construction of the NGC
Project would eventually enhance the value of the surrounding portions of the
land that they still own.

Second, the Republic assured the respondents that, in the remote possibility that
it abandons the project, they will have the right to buy back the land.

The respondents further allege that they were reluctant to sell the land, but felt
compelled to do so because martial law was in force, and they dared not resist a
project of President Marcos. Thus, relying on the Republic's representations, the
respondents signed the deeds of absolute sale.

Realizing that the Republic had completely abandoned its initial plan to use the
land for the NGC Project, in 2005, the respondents filed a complaint for the
annulment of the sale of the properties on the grounds of fraud, force,
intimidation, or undue influence. They also asserted their right to buy back the
properties at the same price at which they sold them since the Republic failed to
develop the land according to the original purpose for which it was
"expropriated." Alternatively, they asked for the payment of additional
compensation in the amount of not less than Five Million Pesos.

The Republic and the HUDCC (defendants) argue that: (1) they are immune from
suit as government instrumentalities; (2) they agreed to neither the respondents'
right to repurchase the properties in case the government abandons the NGC
Project nor a right to additional compensation in case the respondents' remaining
properties suffer a decrease in market value; (3) the respondents were not forced,
intimidated, or unduly influenced to sell their properties to the government; and
(4) even assuming that any vice of consent attended the sale, the respondents'
action for the annulment of sale is barred by prescription and laches.

ISSUES:
1. Whether the Republic is immune from suit.
2. Whether the action is barred by prescription or laches.
3. Whether an exception to the parol evidence rule applies.
4. Whether the respondent to additional compensation.

RULING:
The RTC decided in the respondents' favor. It held that:

1. The RTC held that the Republic is not immune from suit. Citing Section 9,
Article III of the Constitution, the Republic cannot invoke government immunity
since the nature of the case is either to obtain just compensation or to retrieve
the properties.

2. The respondents' action is not barred by either prescription or laches. It noted

Roque's letters to DPWH Secretary Jayme dated March 25, 1987 and September
23, 1988. The RTC took these letters as clear indications of the respondents'
vigilance in invoking their right; thus, their action is not barred by laches.

The RTC added that the respondents found out about the Republic's plan to divert
the use of the properties to low-cost housing only on May 14, 2003, when RA
9207 was enacted. Thus, the filing of the complaint in 2005 was within the four-
year prescriptive period reckoned from the enactment of RA 9207.
3. The RTC annulled the deeds of absolute sale on the ground of fraud. It gave
credence to Viloria and Gonzalo's testimonies about the matters discussed during
negotiations. Based on these testimonies, the RTC emphasized that the
respondents signed the deeds of absolute sale relying on the government's
assurances that they could retrieve the properties should the NGC Project not
materialize.

4. The RTC declared that the respondents are not entitled to damages and
attorney's fees because the Republic was not in bad faith in resisting the
complaint. The RTC added that the Republic is not entitled to its counterclaims
because RA 9207 recognizes the validity of vested rights and precedence of
proclamations.
 23. UNITED STATES OF AMERICA vs. GUINTO
G.R. NO. 76607,February 26, 1990

FACTS:
The private respondents in the first case are suing various officials of the U.S. Air
Force personnel stationed at Clark Air Facility in conjunction with their tendering
for contracts for barber services on the base.

In the second instance, private respondents sued private petitioners for wrongful
discharge as a cook in the United States. John Hay Air Station's Air Force
Recreation Center.

In the third case, private respondent worked as a barracks boy in a U.S. military
base. Base, was apprehended during a buy-bust operation carried out by the
individual petitioners, U.S.

Air Force and Air Force Office of Special Investigations special agents He
subsequently filed a claim for damages against the individual petitioners, saying
that he was removed as a result of their actions.

In the fourth instance, the private respondents filed a lawsuit for damages against
the private petitioners for injuries allegedly experienced by the plaintiffs as a
result of the defendants' actions. According to the plaintiffs, the defendants
abused them, shackled them, and let loose dogs on them, biting them in various
places of their bodies and causing serious injuries.

Because they all address the idea of governmental immunity, these cases have
been merged. The United States of America was not named in the complaints
below, but it has moved to dismiss them on the grounds that they are effectively
cases brought against it to which it has not agreed. It is now disputing the
respondent courts' refusal of its motions.
ISSUE:
Whether the Doctrine of State Immunity is not applicable thereby making the
State liable.

HELD:
NO. While the petitioners are suable, they are not responsible. It is evident that
the claim for damages cannot be permitted on the basis of the thoroughly
analyzed evidence.

The conventional law of immunity protects a state from being sued in another
state's courts without its assent or waiver. This norm is a necessary byproduct of
the concepts of state independence and equality.

The norms of International Law, on the other hand, are not frightened; they are
continually changing and evolving. Furthermore, as governments' activities have
grown, it has become vital to distinguish between sovereign and governmental
acts (jure imperii) and private, commercial, and proprietary acts (jure gestionis).
As a result, State immunity now only applies to acts jure imperii. The limited use
of State immunity is now the norm in the United States, the United Kingdom, and
other Western European countries.

The restrictive application of State immunity is proper only when the proceedings
arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State may be said 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. It does
not apply where 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.

Without a doubt, the United States of America, like any other state, will be judged
to have impliedly waived its non-suability if it enters into a contract in its
proprietary or private capacity, as in the situations at hand. No such waiver may
be suggested unless the transaction affects its sovereign or governmental
competence. When a state enters into business contracts, it is considered to have
sunk to the level of an individual and hence to have implicitly consented to being
sued.

The private respondents invoke Article 2180 of the Civil Code, which holds the
government liable if it acts through a special agent. The argument, it would seem,
is premised on the ground that since the officers are designated “special agents,”
the United States government should be liable for their torts.

There appears to be a failure to differentiate between suability and liability, as

well as a misunderstanding that the two phrases are equivalent. Suability is
determined by the state's agreement to be sued, responsibility under relevant
law, and documented facts. The fact that a state is suable does not automatically
imply that it is responsible; on the other hand, it can never be held accountable if
it does not first consent to being sued. The mere fact that the state has permitted
itself to be sued does not imply liability. When a state waives its sovereign
immunity, it is simply providing the plaintiff the opportunity to establish, if
possible, that the defendant is accountable.

The aforementioned article creates a liability rule rather than a suability rule. The
government may be held accountable under this rule only if it first consents to
being sued in any of the approved forms. Furthermore, even if he is designated as
a special agent, the agent doing his usual duties is not one. Not only that, but the
clause purports to control only the local state's ties with its population, and so
applies exclusively to the Philippine government and not to foreign governments
impleaded in our courts.

RULING:
The petitioners' complaints in the lower court were aptly DISMISSED.
 24. REPUBLIC OF INDONESIA vs. VINZON
G.R. No. 154705. June 26, 2003

FACTS:
Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah,
entered into a Maintenance Agreement in August 1995 with respondent James
Vinzon, sole proprietor of Vinzon Trade and Services. The Maintenance
Agreement stated that respondent shall, for a consideration, maintain specified
equipment at the Embassy Main Building, Embassy Annex Building and the Wisma
Duta, the official residence of petitioner Ambassador Soeratmin. The equipment
covered by the Maintenance Agreement are air conditioning units, generator sets,
electrical facilities, water heaters, and water motor pumps. It is likewise stated
therein that the agreement shall be effective for a period of four years and will
renew itself automatically unless cancelled by either party by giving thirty days
prior written notice from the date of expiry.

Petitioners claim that sometime prior to the date of expiration of the said
agreement, or before August1999, they informed respondent that the renewal of
the agreement shall be at the discretion of the incoming Chief of Administration.

The new Minister Counsellor reportedly considered respondent's work and

services unacceptable and in violation of the Agreement's criteria. The
respondent's arrangement with the respondent was terminated. The latter
contended that it was illegal and arbitrary.

Respondent filed a Motion to Dismiss alleging that the Republic of Indonesia, as a

foreign state, has sovereign immunity from suit and cannot be sued as party-
defendant in the Philippines.

ISSUE:
Whether the Court of Appeals 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. The mere entering into a contract by a foreign State with a private party
cannot be construed as the ultimate test of whether or not it is an act jure imperii
or jure gestionis. This is simply the beginning of an inquiry. The formation of a
diplomatic mission is without a doubt an act juri imperii. The state may enter into
contracts with private businesses to maintain the embassy's premises, furniture,
and equipment. When it enters into a contract with the responder, the Republic
of Indonesia is engaging in a sovereign action. The Republic of Indonesia agreed
into the maintenance agreement as part of its official duties. It cannot be said to
have relinquished its immunity from legal action.

RULING:
The petition is hereby GRANTED. The decision and resolution of the Court of
Appeals in CA G.R. SP No. 66894 are REVERSED and SET ASIDE and the complaint
in Civil Case No. 18203 against petitioners is DISMISSED.