USA vs Guinto

GR 76607 February 26, 1990

Facts
Private respondents are suing several officers of the ! "ir Force stationed in #lar$ "ir %ase in connection &ith
bidding conducted by the' for contracts for barber services in the base
(n February 2), 19*6, the +estern Pacific #ontracting (ffice, ($ina&a "rea ,-change, .!. "ir Force, solicited
bids for such contracts through its contracting officer, /a'es F. !ha&. "'ong those that sub'itted their bids
&ere the private respondents.
0he bidding &as &on by Ra'on 1i2on, over the ob3ection of the private respondents, &ho clai'ed that he had
'ade a bid for four facilities, including the #ivil ,ngineering "rea, &hich &as not included in the invitation to
bid.
0he private respondents co'plained to the Philippine "rea ,-change 4P5"67. 0he latter, through its
representatives petitioners Reeves and !house, e-plained that the #ivil ,ngineering concession had not been
a&arded to 1i2on as a result of the February 2), 19*6 solicitation. 1i2on &as already operating this
concession and the e-piration of the contract had been e-tended. Private respondents filed a case to co'pel
P5"6 to cancel the a&ard to 1i2on, to conduct a rebidding, and by a &rit of preli'inary in3unction to continue
operation of concessions pending litigation
Petitioners filed a 'otion to dis'iss on the ground that the action &as in effect a suit against the nited
!tates of "'erica, &hich had not &aived its non8suability. 0he individual defendant, as official e'ployees of
the ! "ir Force, &ere also i''une fro' suit.
0rial court denied the petition on the basis that the #ourt9s attention is called by the relationship bet&een the
plaintiffs as &ell as the defendants, including the ! Govern'ent, in that prior to the bidding or solicitation in
:uestion, there &as a binding contract bet&een the plaintiffs as &ell as the defendants, including the !
Govern'ent.
Issue
+hether or not the petitioner is i''une fro' suit
Held
0he rule that a state 'ay not be sued &ithout its consent, no& e-pressed in "rticle 6;<, !ection =, of the
19*7 #onstitution, is one of the generally accepted principles of international la& that &e have adopted as
part of the la& of our land under "rticle <<, !ection 2. 0his latter provision 'erely reiterates a policy earlier
e'bodied in the 19=> and 197= #onstitutions and also intended to 'anifest our resolve to abide by the rules
of the international co''unity.
,ven &ithout such affir'ation, &e &ould still be bound by the generally accepted principles of international
la& under the doctrine of incorporation. nder this doctrine, as accepted by the 'a3ority of states, such
principles are dee'ed incorporated in the la& of every civili2ed state as a condition and conse:uence of its
'e'bership in the society of nations. pon its ad'ission to such society, the state is auto'atically obligated
to co'ply &ith these principles in its relations &ith other states.
<n the case of the foreign state sought to be i'pleaded in the local 3urisdiction, the added inhibition is
e-pressed in the 'a-i' par in parem, non habet imperium. "ll states are sovereign e:uals and cannot assert
3urisdiction over one another
0he consent of the state to be sued 'ay be 'anifested e-pressly or i'pliedly. ,-press consent 'ay be
e'bodied in a general la& or a special la&. #onsent is i'plied &hen the state enters into a contract or it itself
co''ences litigation.
0he restrictive application of !tate i''unity is proper only &hen the proceedings arise out of co''ercial
transactions of the foreign sovereign, its co''ercial activities or econo'ic affairs. !tated differently, a !tate
'ay be said to have descended to the level of an individual and can thus be dee'ed to have tacitly given its
consent to be sued only &hen it enters into business contracts. <t does not apply &here the contract relates to
the e-ercise of its sovereign functions. <n this case the pro3ects are an integral part of the naval base &hich is
devoted to the defense of both the nited !tates and the Philippines, indisputably a function of the
govern'ent of the highest order? they are not utili2ed for nor dedicated to co''ercial or business purposes.
0he barbershops sub3ect of the concessions granted by the nited !tates govern'ent are co''ercial
enterprises operated by private person9s. 0hey are not agencies of the nited !tates "r'ed Forces nor are
their facilities de'andable as a 'atter of right by the "'erican service'en. 0his being the case, the
petitioners cannot plead any i''unity fro' the co'plaint filed by the private respondents in the court belo&.