Doctrine of Restrictive State Immunity or Liability

- Must consider first the type of contract entered by state.

- If contract under sovereign or governmental capacity or jus imperii, no

implied consent.

- If jus gestionis, commercial or proprietary capacity, there is implied

consent.

- USA vs. Ruiz- do not concluded that just because state enters contract with
a private person, the state is automatically liable to the contract. Ask first
what kind of contract the state entered (Doctrine of Restrictive State
Immunity).

- If contract is in the nature of Jus Gestionis (entered by state in its

commercial or proprietary capacity) implied waiver of state to be sued.

- If Jus Imperie (entered by state in its sovereign capacity) no implied waiver

to be sued.

- US. Vs. Guinto

- Facts: During the time the Americans were in the Philippines maintain
bases therein, a Private Filipino contractor entered into a contract with the
US for the construction of wharves inside Subic Naval Base. The contractor
was, however, not paid with the full amount agreed upon. Thus, the latter
filed a case in RTC against US. The RTC, however, dismissed the case
because US invoke immunity, the contractor countered that US entered into
contract with him, hence, implied waiver.

- SC: NO, see first the nature of contract. In this case, the contract is Jus
Imperii because the wharves and infrastructure are for the protection and
defense of the PH and US by virtue of the US-RP Mutual Defense Treaty.
SC further held that the defense of state is a sovereign act of the highest
order.

- Q: Is there a remedy for the Filipino Contractor to collect the amount?

- A: Yes, the contractor may be represented by the State. (See discussion

above).