Topic :

Doctrine of State Immunity

Title :

Froilan vs. Pan Oriental Shipping Co.

Citation:

G.R L- 6060, September 30, 1954

I.

Facts:

Defendant Pan Oriental took possession of the vessel in question after it had
been repossessed by the Shipping Administration and title thereto reacquired by the
government, following the original purchaser, Fernando Froilans, default 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 right
sunder 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
right sunder the contract of sale, for the reason that when the vessel was delivered
to it, the Shipping Administration had authority to dispose of said authority to the
property, 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
property. The Republic of the Philippines was allowed to intervene in said civil
case praying for the possession of the in order that the chattel mortgage constituted
thereon may be foreclosed.
II.

Issue:
Whether or not the Republic of the Philippines is immune from suit.

III.

Ruling:

No, because the moment when the government filed its complaint in
intervention which in effect waived its right of non-suability.

The immunity of the state from 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 defenses he might have
against the state.